Sure, the CATO institute isn’t going to be in favor of the government owning one share of any bank, let alone have 100% control. And technocrats know that all that would happen is that the banks would be cleaned up and spun back off.
That’s not the problem.
The problem is the clean up, whether it’s done just by regulation or by internal control. The couple of thousand people at the top of these banks that would be purged are rich, yes, and that counts for a lot, yes, but they have a direct line to power in both parties. You know, these guys that sauna with Geithner and know that he has a huge mole somewhere private.
So, Krugman et al. know what we need to do. I know what we need to do. Obama probably does too. But the reality is, we’re just not there politically yet. To get there, there must be more pain.
You can know everything you need to know about banking and economics to fix this situation. But unless you know your politics, you can’t project whether those solutions will be implemented timely.
Just consider global warming. Everyone knows about it. People denying it know its real, but just want to shit on liberalism or continue to pollute cause it makes them money. Everyone’s known about it for 20 years, and anyone who pays any attention to science knew about it 30 years ago. And nothing has been done, in fact, it’s only been made worse. The reason is simple: the politics of fixing the problem don’t exist. Even if there was a syncronicity of governments in power with the will to pass a real global warming treaty, most of them would fall when the consequences hit those countries. Only when people see a disaster or two will they act.
Same with the banks. Difference is we’ll see the banking disaster this year.