Wednesday, October 15, 2008

The 411 on Our Money and the Bank Deal

I just finished reading Morra Aarons Mele's post at BlogHer on the bank nationalization news and its connection to the $700 billion "bailout." For me, the entire post was helpful, especially the following:
... "We absolutely need to get credit moving, quickly and fast. The theory is: we are all now shareholders, that’s where the nationalization comes in. We’ve bought a stake in these banks…much as the government of lower Saxony in Germany has a stake in Volkswagen and BMW.” We get more of a voice, but we don’t have voting shares and we don’t drive the business.
Part of that quote comes from Linda Bilmes, a Harvard Professor and former Assistant Secretary and Chief Financial Officer of the US Department of Commerce, one of the experts Morra interviewed. I italicized the last line because it clarifies for me what's going on with partial nationalization of nine major banks. We're not talking about "nationalization" the way most of us would think of it, which is the government's got a big hand in the pot. The government will not be managing the nine banks, according to Morra's post.

You can read her complete post, "Beyond the buzz words: $700 billion, bank rescues, partial nationalization, and what it all means," here at this link.

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