With even Alan Greenspan and Lindsey Graham now in support, and the alternatives canvassed in the Geithner “plan” thoroughly discredited (even Wall Street hated it), large-scale nationalization of US banks now looks inevitable. But, as Obama has observed, this kind of thing seems alien to US culture.
This looks like a classic Lakoff framing problem. How can the obviously necessary, also be made to seem natural? There have been a couple of approaches so far.
The first is to emphasise that the Federal Deposit Insurance Corporation routinely takes over failed banks. So, as Paul Krugman puts it “nationalization is as American as apple pie“.
The second is to focus on the ultimate goal which is to return the banks to solvency and private ownership. Hence the lovely euphemism coined (I think) by Calculated Risk “preprivatisation”
While we are on the topic, the sudden emergence of “socialism” as a term of political debate in the US, raises the question of whether “social democrat” might come in to use as an alternative to the rather unsatisfactory “liberal” and “progressive” terms currently in use. Maybe it’s too European for the US, but it’s certainly come into much more common use in Australia over the last decade or so.
And still on the same general topic, I meant to write about Sheri Berman’s piece in Dissent but Henry beat me to it. My take on the situation is a bit more optimistic. It’s pretty clear that the collapse of so much of the established order has taken social democrats unawares, even if the shock is not as great as for others. After decades in which the primary focus was to defend and adapt as much as possible of the social-democratic settlement in a world dominated by global finance, everyone is struggling to deal with the immediate emergency, and there has been little time to think about the opportunities for more positive action that have opened up. But the full-scale crisis is only a few months old, and the responses look a lot more constructive than in the wake of the 1929 crash.
Update In a convergence of views that would have been surprising a few months ago, Alex Tabarrok agrees that this is a framing problem. He suggests framing nationalization as a kind of bankruptcy.