Prof. Paul Krugman, Bank Nationalization! NEVER!
Prof. Paul Krugman, Bank Nationalization! Never! Let me quote the Feb 13, 09 of NYT column of Prof. Paul Krugman’s words:”…stress test (Tim Geithner’s plan, this author’s note) act as back door route to temporary bank nationalization, the solution favored by a growing number of economist, myself included!” It would be not the first time or the last time, I see this kind of writing. To my great surprise, Prof. Krugman still insists bank nationalization on this critical timing and location, US! Another quotation from Feb 12, 09 of WSJ, Harvard economist Robert Barro, he said:” He (Paul Krugman) just says whatever is convenient for his political argument. He doesn’t behave like an economist. And the guy has never done any work in Keynesian macroeconomics, which I actually did. He has never even done any work on that. His work is in trade stuff. He did excellent work, but it has nothing to do with he’s writing about.” On Prof. Barro, Readers can sense the sour grapes of Krugman’s Nobel Prizes! If the theory, writing, assumption or hypothesis of Adam Smith, Keynes, Milton Friedman, Jim Rogers, Joseph Stiglitz, Paul Krugman or this Prof. Baroo, work. We will not be here-the second greatest recession and going to depression (IMF Chair said). Why? America has the greatest numbers of Nobel Prize winners of economy. And we still have the second greatest recession and greatest deficit! Why? (You’ll know. See my previous writing in Bigthink please!) Now let me answer why bank nationalization cannot work in this timing, this situation and in America! 1.The timing, this US recession is different of the 1990 Japan’s economic bubble and 1992 Sweden’s bank crisis. Now we are in global economic crisis! The Bank’s toxic CDO, CDS, AND SYNTHETIC CDO….. AFEECT THE WORLD ALMOST EVERYWHERE, China, Australia, England, Brazil, you name it! EVEN the distant corner of Norway and Ice Land! Now, it becomes global economic crisis. 2.In 1990 Japan economic bubble, Japan still had billions US$ reserve to back up its economy and currency. In 1992 Sweden bank crisis, Sweden was not in recession, so she can temporary nationalize the bank! 3.America now in recession. We have nothing to back up our I-O-U debt owned by China, Japan, HKSAR, Taiwan, Singpore and Russia. And we have nothing to back up our currency! We just printing our money to bail out and may use our mighty military to back up our dollar! That means in a certain degree the foreign Government they are still buying the American Bond, because we have the military power to back up the dollar, not a bit of our economy. The Chinese, Japanese, Englishman may already know and cannot speak out: The King has no cloth! Indeed we are no cloth and the worst we have 10 trillions in deficit and 3 trillions dollar war in Iraq! SO, Prof. Krugman, if a government just uses printing-money method to nationalize the bank. The recession is still there. That is I understand why Tim Geithner encourages the private sector to participate to bail out the bad bank! My suggestion, the private sector should include the foreign private investor or sovereignty funds (if they meet the security check). I do not blame Prof. Krugman does not understand this situation! Any one can lead us through out of this recession, he is hero in history, because we are deeply in an unprecedented crisis. Where is this hero? I am very sure not this Congress! (see my previous writing, please.) Bonus: As a 40 something, Mr. Tim Geithner should be humble a bit, just like the smartest and brightest, former President Bill Clinton. His humble statement in these years Davos Annual meeting of 2008, he said: “it is the fault of America to cause this global economy crisis, however, we are in the same boat! ” What I think is that Mr. Clinton knows that without the international cooperation, it is not that easy for America to get out this unprecedented recession. I hope Mr. Geithner should eat some “humble pies”, before he says anything in the coming G7 meeting in Italy this month and G20 summit London in April. God bless America!