Has Banking Been Nationalized?
Has Banking Been Nationalized? Thursday October 16, 2008#spacer{clear:left}#abc #sidebar{margin-top:1.5em}zSB(3,3)This week, governments in Europe and the U.S. have committed taxpayer funds to buy preferred stocks in private banks, effectively becoming part owners. In return, the banks will use the funds as capital to start making loans again, and can usually put out $10 of loans for every $1 taken in as capital. In this way, the world’s credit markets can get jump-started, preventing a more severe recession that the one already predicted. However, has this brought the world closer to Socialism? In some respects, the answer is yes, since the government will have a say in how the banks are run. Banks may not use the capital to buy back their own stock, and participating banks have can only expense the first $500,000 of CEO compensation. The government also has the right to purchase additional shares of common sto
