Alan Greenspan is for it. Lindsay Graham is for it. Ben Bernanke says it’s only just this once and, honest, it will feel good.
How come the architects of the world financial meltdown are suddenly in favor of nationalizing the banks? Because they’ve been caught drinking and driving again. Once again, they wrapped the family sedan around an oak tree, and have limped home bleeding.
It’s happened before. Back when I had hair, the Reaganauts had to bail out the DUI-ed denizens of the S&L mess by taking over the majority of the nation’s neighborhood thrift institutions. In my grandfather’s day, after a decade that looked startlingly like the past one, the Feds threw the banking system into rehab.
It happened then, in spite of the protests of the “free market” religionists, because there is no such thing as a “free market.” “Markets,” whether macro or micro, exist within a cosmos defined by varying degrees of restraint: some of it by law, some of it by fear, some of it by greed. And everybody knows it.
Only the maddest sort of economic Flat-earther actually believes in the “free market.” They just like the term. Makes them feel all macho and testosterone powered. Like swilling from a fifth of Black Jack while negotiating the Taurus around a hairpin turn.
We’ve got laws that say bankers have to actually have some money to lend. Or that fund managers must actually have funds in their funds when they accept your funds for investment. We have laws that define the roles of boards and stockholders. We have all sorts of laws setting the rules for fair and ethical behavior in the market. What we don’t have is a free market.
And that’s because a free market, even if it existed somewhere, wouldn’t work very long. Somebody would horde all its assets and everyone else would be occupied with trying to steal them back. And finally somebody (presumably the victorious party) would figure out a more or less equitable way to divide it all up, declare some rules, and go back to playing a slightly altered game.
Be neither surprised nor frightened about the end of the “free market.” It doesn’t exist. And you wouldn’t want to live in it if it did. The air would stink, the water would be foul, and you would be dirt poor.
So let’s get on with it. We don’t even have to change the name of Bank of America.