Richard Parker: Nationalization is not un-American. We have a long history that proves it.
[Richard Parker is a lecturer in public policy and senior fellow of the Shorenstein Center at Harvard's Kennedy School of Government. He has worked as an economist for the United Nations Development Programme and is a cofounder of Mother Jones Magazine.]
... The truth is that the United States has a long and overlooked history of "nationalization," starting with the Northwest Ordinance of 1789, and then the Louisiana Purchase of 1803. Both acts put vast amounts of American territory in the public domain, at a time when land was far more valuable than currency. Even today, a third of all the land in the United States is still publicly owned, as are the continental shelves along our coasts, the airspace above us, not to mention hundreds of thousands of miles of roads and trillions of dollars' worth of other public infrastructure so essential to our private economy.
In World War I, the nations' railroads were successfully nationalized to sustain the war effort. In the 1930s, the Reconstruction Finance Corp. bought millions of shares in over 6,000 banks in order to rescue them. During World War II, government took control of the economy's entire pricing system for consumer goods—a more complex job than taking over several big banks—and did quite well at it, most economists agree. In the 1980s, the Resolution Trust Corp. seized hundreds of failed savings and loans in order to save the system. After 9/11, the government effectively nationalized the private-security firms at airports, and replaced them with the federal TSA.
What all these precedents remind us is that, in ducking any discussion of the prospect for "nationalization" of our bankrupt banking giants, we've focused on the wrong issue. It's not whether nationalization should happen, but what sort of nationalization will happen and when.
And that means the real choices for the Obama administration are the same Roosevelt faced with the banks and Reagan and Bush faced with the savings and loans: passive versus active nationalization; regulatory oversight versus direct management; and the shape of regulation after the financial crisis finally eases, including what the regulations will be, who will administer them, and how seriously and well they're enforced.
We need to start having that debate—and soon.
Read entire article at Newsweek
... The truth is that the United States has a long and overlooked history of "nationalization," starting with the Northwest Ordinance of 1789, and then the Louisiana Purchase of 1803. Both acts put vast amounts of American territory in the public domain, at a time when land was far more valuable than currency. Even today, a third of all the land in the United States is still publicly owned, as are the continental shelves along our coasts, the airspace above us, not to mention hundreds of thousands of miles of roads and trillions of dollars' worth of other public infrastructure so essential to our private economy.
In World War I, the nations' railroads were successfully nationalized to sustain the war effort. In the 1930s, the Reconstruction Finance Corp. bought millions of shares in over 6,000 banks in order to rescue them. During World War II, government took control of the economy's entire pricing system for consumer goods—a more complex job than taking over several big banks—and did quite well at it, most economists agree. In the 1980s, the Resolution Trust Corp. seized hundreds of failed savings and loans in order to save the system. After 9/11, the government effectively nationalized the private-security firms at airports, and replaced them with the federal TSA.
What all these precedents remind us is that, in ducking any discussion of the prospect for "nationalization" of our bankrupt banking giants, we've focused on the wrong issue. It's not whether nationalization should happen, but what sort of nationalization will happen and when.
And that means the real choices for the Obama administration are the same Roosevelt faced with the banks and Reagan and Bush faced with the savings and loans: passive versus active nationalization; regulatory oversight versus direct management; and the shape of regulation after the financial crisis finally eases, including what the regulations will be, who will administer them, and how seriously and well they're enforced.
We need to start having that debate—and soon.