Treasury Secretary Timothy Geithner is preparing to unveil a plan today to purchase as much as $1 trillion in troubled mortgages and other assets from banks. The government is reaching out to hedge funds, private equity firms and sovereign wealth funds to help buy the toxic assets. The Obama administration has described the plan as a public-private partnership, but most of the actual money will be put up by the government. We speak with Nobel Prize-winning economist and New York Times columnist, Paul Krugman.
ecause of the increasing severity of the economic crisis and because the banks have been given billions of taxpayer dollars but still refuse to lend money, we in the Workers’ Emergency Recovery Campaign believe the question of nationalization should be thoroughly discussed and debated. Many prominent economists are arguing that the banks can only be saved if they are nationalized. But if they are nationalized, that step raises additional questions: Why should they return to private hands if the governmen’s expertise is required to save them?