When Sen. Lindsey Graham announced on national TV that the U.S. should at least consider nationalizing banks, he drew scorn from a lot of fellow Republicans.
But today Graham picked up an ally who's held in esteem by Republicans as well as Democrats.
”It may be necessary to temporarily nationalise some banks in order to facilitate a swift and orderly restructuring,” former Fed chairman Alan Greenspan has told the Financial Times. “I understand that once in a hundred years this is what you do.”
Greenspan, a free-market capitalist, told the paper that temporary government ownership would "allow the government to transfer toxic assets to a bad bank without the problem of how to price them."
Graham amplified his comments this week in an interview with the Observer. He said after federal investments such as the $45 billion the government poured into the Bank of America, nationalization should at least be on the table.
"The truth is we've put more money into the Bank of America than it's worth," Graham said. "That's not nationalization. That's just stupid."
Some online readers applauded Graham's idea to debate the issue. Others didn't.
"He just admitted Congress is stupid - not that this was unknown to the public," akhimark wrote. "Now he thinks Congress should take over banks. That's just stupid. I guess stupid is as stupid does.
(Graham's comments apparently didn't take into account that the $45 billion government investment is preferred stock, over and above the $27 billion in market capitalization.)