Sunday, December 30, 2012

Assertive Nationalization

When the entire banking sector was going down, the US government bailed it out, temporarily assuming trillions in liabilities.

Many argued it should have just been left to fail (which might have been catastrophic for the economy as a whole, unless other measures were taken), or that strings should have been attached for government help, possibly including these: (a) a flush of current management, (b) elimination of expected and future bonus payments, (b) lending mandate.

A constructive response in other countries to similar crises in the past has been temporary nationalization.  That's a way around the lengthy processes of bankruptcy with regards to keeping current operations going.  This has been done most successfully in Sweden (which is, btw, a very capitalistic country and the banking nationalization was determinedly temporary).  And in the USA during the Great Depression.

But crises like these also present an opportunity, if we were ready to handle it.  Parasitic industries like finance could be nationalized and redesigned to serve, rather than feed off of, the public good.  During times like the banking crises, entire industries could be bought up for pennies.  That's what vulture capitalists do for bankrupt businesses.  They shouldn't be able to, but the public should.

It turns out that commanding heights industries in the USA are parasitic like this:

transportation manufacturing
military hardware
road and other major construction

These could better serve the public as public industries.  As it is they make their marks or dump their long term losses on the public, and privatize short term gains.

Transportation, for example, sells oversized and planned-obsolete personal vehicles, using propaganda techniques (advertising).  Many of the losses are to third parties in the future: pollution and global warming effects.

Actual transportation needs could be filled far more economically in other ways.

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