Monday, February 16, 2009

Being Lindsey Graham

Is Lindsey Graham (R-SC) a socialist? On "ABC This Week" he said:

"This idea of nationalizing banks is not comfortable, but I think we've got so many toxic assets spread throughout the banking and financial community, throughout the world, that we're going to have to do something that no one ever envisioned a year ago, no one likes. To me, banking and housing are the root cause of this problem. I'm very much afraid any program to salvage the banks is going to require the government... I would not take off the idea of nationalizing the banks."

I would never ask such a question, save it has been said repeatedly that President Obama is a socialist for suggesting temporary like-measures, including nationalizing some banks temporarily. His Keynesian approach has been denigrated. I wonder if Senator Graham considers himself a socialist. Being such is not inherently bad, but it's just that many leaders of the Republican Party have made it a dirty word through their words.


Bob Foster said...

Judith – There are 9,459 banks in the U.S. with assets of $100 million or more, plus many smaller community banks. These banks have over 70,000 branches. The great majority of these banks never made a subprime loan in their long successful lives, and don’t deserve to be lumped in with the handful of incompetent large banks and greedy financial institutions that are not banks.

These long-time successful banks are currently not being allowed to loan money, because the federal banking regulators won’t allow it. I guess the feds are afraid the banks might make a subprime loan if they turn their backs (where were these guys when the big banks were going crazy with subprime loans?)

So, if we nationalize the U.S. banking system, aren’t we going to penalize the good sound successful banks along with the few bad apples? Can the government run the banking system any better than what’s been done? (Think FEMA.)

As the front cover of the latest Newsweek proclaims, “We Are All Socialists Now,” but I still would hate to see the very foundation of small business capitalism taken over by a government that can barely run itself.

Judith, you continue to have great posts, and I love them all. You make us dig down and think about things. Thank you!

judith ellis said...

Bob - What you always and forever bring to any discussion is a clarity and sensibility, not to mention facts that centralize and focus things so well. For this, I thank you immensely. You are fair and balanced with broad business acumen. I have learned much from your blog and comments here and elsewhere. Thank you.

In the midst of such confusion and incompetence, it is often easy to lump many things into one. But as you have clearly pointed out, there is perhaps no need to do such when there are a great many banks who did not participate in subprime loans.

My brother is a successful banker and he understands these things well. I will speak of this discussion with him. He has been an entrepreneur since his teenage years and is quite adept. He also had a successful mortgage company for many years and it is there that I learned a lot about mortgages some 12 years ago.

I have learned a lot from him. He is also an ordained minister, having a beautiful cathedral downtown at the age of 20 of some 600+ members which included a diversity of race, age, and gender. He is 49 now and he no longer pastors but his ethics are solid and ministry ongoing. Our lives our ministries.

Regarding small business and socialism, I absolutely love this:

"As the front cover of the latest Newsweek proclaims, 'We Are All Socialists Now,' but I still would hate to see the very foundation of small business capitalism taken over by a government that can barely run itself."


Thank you for your words of encouragement, Bob. They make the difference and are very much appreciated.

I am most happy to say something of value. It's my pleasure, really.