Because They Can't Walk and Chew Gum

The weirdest argument coming from Repuglicans lately is that President Obama is overreaching, trying to do to much, and not keeping his eye on the ball. Just because the prior President could not deal with more than one thing at a time, does not mean Obama can't. Still this is what the Repuglicans are going with.

And of course a lot of the mainstream media is ready to run with this talking point. Here is ABC's Jake Tapper on Monday night during Nightline: "It's the media's new question. Is the president attempting to do too much?" The NBC's Brian Williams last night on the Nightly News: "Today marked President Obama's 50th day in office. Halfway through his first 100 days, the president's first seven weeks have been a whirlwind, with often dramatic movement in all directions, on all fronts: the economy, health care, two wars, and today education reform, which raises the question talked about on cable all day long: Is it all too much for any one administration?"

What?

Then you read Carl Cameron on Fox News and he confirms this is a Republican talking point: "Republicans across Capitol Hill today complained that President Obama and Democrats are taxing too much, spending too much, and borrowing too much. They say this is their mantra for the weeks and months ahead."

Along with ABC's George Stephanopoulous who on Monday night said: "The phrase is 'overloading the circuits'....It's coming from a lot of different corners, especially Republicans like John McCain, and the White House is pushing back very hard against this criticism."

Luckily President Obama and his staff seemed ready for this critism and had some good responses to such charges. Here's what he had to say on the subject yesterday, as a preface to his speech on education:

"I know there's some who believe we can only handle one challenge at a time. And they forget that Lincoln helped lay down the transcontinental railroad and passed the Homestead Act and created the National Academy of Sciences in the midst of civil war. Likewise, President Roosevelt didn't have the luxury of choosing between ending a depression and fighting a war; he had to do both. President Kennedy didn't have the luxury of choosing between civil rights and sending us to the moon. And we don't have the luxury of choosing between getting our economy moving now and rebuilding it over the long term.

"America will not remain true to its highest ideals -- and America's place as a global economic leader will be put at risk -- unless we not only bring down the crushing cost of health care and transform the way we use energy, but also if we do -- if we don't do a far better job than we've been doing of educating our sons and daughters; unless we give them the knowledge and skills they need in this new and changing world."

This is just a really lame attack by the Repuglicans, and I hope the media stops giving it.

Should The US Consider Nationalizing Banks That Are In Trouble

Professor Nouriel Roubini of Global EconoMonitor, who is also known as Dr. Doom (because he for years was warning of the on-coming financial crisis) has given several interviews over the lasy week to Business New Europe, Charlie Rose, Wall Street Journal, Bloomberg, Reuters, ABC, NBR and CNBC.

In his CNBC interview, he strongly advocates a Swedish-style bank nationalization to repair the ailing financial system and prevent banks from turning into 'zombie banks' like were in Japan.

"If you don't nationalize them on a temporary basis the fiscal commitments will be bigger. The alternative is actually a dangerous debt spiral.”

The Swedish-style bank nationalization is where the government of Sweden in 1992 had to deal with the collapse of a real estate bubble and had to take control of two of that country's largest banks, Nordbanken and Gota. The government stripped the banks of their bad assets, which it kept in a pair of new companies known as "bad banks." The remnant "good banks" were then merged into a single company and launched back into the marketplace.

Even Conservatives like Alan Greenspan and Senator Graham have publicly suggested that the idea of nationalization may be needed. Professor Roubini has pointed to this in a number of interviews like the one he had with Tunku Varadarajan in Wall Street Journal.

The biggest barrier to nationalization is the negative public image as 'Bolshevik' rather than 'pragmatic.' But this is stupid, and the result of idiots like Hannerty, Limbaugh, and Republican politicians who toss out accusations of socialism and communism without consideration. Nationalizing troubled banks would allow the government to take distressed assets without having to set a price.

For those who are scared of the word 'nationalization' you should consider the example of IndyMac, a bank that was nationalized and quickly re-privatized in less than a year. IndyMac was an example of a company that needed to be seized.

During a discussion of the banking crisis on ABC's This Week with George Stephonopilis that featured Professor Roubini, Professor Paul Krugman and George Will, and they discussed a temporary nationalization. Professor Krugman suggested calling nationalization “pre-privatization” to sugarcoat the program. Krugman also points out that in 2009 we have already nationalized 14 banks. Similarily the Federal government took control of mortgage finance companies Fannie Mae and Freddie Mac in early September of 2008.

Administration officials say they are determined to maintain the appearance, and in important respects the reality, that banks remain under private ownership. I do not agree with this, the current leadership of these banks are the major problem. The Obama administration argues that they have a responsibility to pursue the least costly solution, and that they continue to believe smaller steps than nationalization can resolve the crisis. They are wrong.

Another argument against nationilzation is that the U.S. Banking system is larger than Swedens, and while the problem is spread across many of the nation's 8,300 banks, the bulk of the problem is in a concentrated few. Fix these mega banks like Citi and Bank of America and you have taken the largest concentration of troubled assets. Nationalize these mega banks, and break them up, no bank should ever be 'too big to fail.'

No one is arguing that the banks should be nationalized on a permanent basis. Those who are arguing against that are attacking straw men.

Obama and his economic team need to step-up as leaders and whether they call it Nationalization or not (it will most probably be called receivership or conservatorship) and take over those major banks that have dragged the economy down.