Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


NATIONALIZATION REVISITED….Steve Waldman takes issue today with my contention that Sweden didn’t actually nationalize very much of its banking industry during its credit crisis of the early 90s, and his rebuttal is worth a read. In the end, though, it turns out that we don’t actually disagree about that much. We both agree that Gota was nationalized, and we both agree that Nordbanken was bailed out. However, we disagree a bit about whether Nordbanken was a “state bank.” This is something of a judgment call: since the Swedish government was the majority owner, I think that’s a fair description, but Waldman points out that it was publicly traded and “not actively controlled by the state prior to the nationalization.” Fair enough. It’s also a judgment call whether this was really a nationalization. If the state goes from majority ownership to full ownership, is that nationalization?

To some extent this is splitting hairs, of course, and you get into some of the same issues in the U.S. Fannie Mae and Freddie Mac, for example, have plainly been nationalized, but how about AIG? For some reason no one wants to call it nationalization, but what else should you call it when the feds own 80% of the company? But semantic arguments to one side, there’s also this:

Nordbanken alone had an asset base of 23% of GDP. To put that in perspective, in US terms that’s almost as large as Citi and Bank of America. (Citi and Bank of America together had an asset base of 26% of US GDP at the end of 2007.)

Again, fair point. It’s one thing to say that “only” two banks were taken over, but if those two banks account for a third of your banking system, then you’ve nationalized quite a bit even if a big chunk of that third was state-owned in the first place.

Anyway, read the whole thing. Just to be clear, I’m not trying to make any kind of bulletproof argument against nationalization, only trying to point out that the story is more complicated than it’s sometimes made out to be. Sweden did some nationalization, but it was the systemic banking guarantee in late 1992 that formed their biggest policy response to the crisis.

FWIW, I think it’s wise to be wary of nationalization. It should be a last resort, and I’ve gotten a sense recently that a lot of people are talking about it awfully casually. Still, it’s true that there are some benefits to nationalization, and one of them is that it allows us to avoid the problem of valuing and buying up toxic assets from troubled banks. If the government owns the whole bank, then the bad stuff can be easily hived off without any kind of valuation at all, and then left to sit for a while before it’s sold off — which is what the Swedes did.

If we have to nationalize, then we have to nationalize. But we should understand the precedents before we do, and go ahead only if we have to. No stampedes, please.

WE CAME UP SHORT.

We just wrapped up a shorter-than-normal, urgent-as-ever fundraising drive and we came up about $45,000 short of our $300,000 goal.

That means we're going to have upwards of $350,000, maybe more, to raise in online donations between now and June 30, when our fiscal year ends and we have to get to break-even. And even though there's zero cushion to miss the mark, we won't be all that in your face about our fundraising again until June.

So we urgently need this specific ask, what you're reading right now, to start bringing in more donations than it ever has. The reality, for these next few months and next few years, is that we have to start finding ways to grow our online supporter base in a big way—and we're optimistic we can keep making real headway by being real with you about this.

Because the bottom line: Corporations and powerful people with deep pockets will never sustain the type of journalism Mother Jones exists to do. The only investors who won’t let independent, investigative journalism down are the people who actually care about its future—you.

And we hope you might consider pitching in before moving on to whatever it is you're about to do next. We really need to see if we'll be able to raise more with this real estate on a daily basis than we have been, so we're hoping to see a promising start.

payment methods

WE CAME UP SHORT.

We just wrapped up a shorter-than-normal, urgent-as-ever fundraising drive and we came up about $45,000 short of our $300,000 goal.

That means we're going to have upwards of $350,000, maybe more, to raise in online donations between now and June 30, when our fiscal year ends and we have to get to break-even. And even though there's zero cushion to miss the mark, we won't be all that in your face about our fundraising again until June.

So we urgently need this specific ask, what you're reading right now, to start bringing in more donations than it ever has. The reality, for these next few months and next few years, is that we have to start finding ways to grow our online supporter base in a big way—and we're optimistic we can keep making real headway by being real with you about this.

Because the bottom line: Corporations and powerful people with deep pockets will never sustain the type of journalism Mother Jones exists to do. The only investors who won’t let independent, investigative journalism down are the people who actually care about its future—you.

And we hope you might consider pitching in before moving on to whatever it is you're about to do next. We really need to see if we'll be able to raise more with this real estate on a daily basis than we have been, so we're hoping to see a promising start.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate