Nationalizing Citigroup

Is it time to nationalize the nation's biggest banks?

Nationalization is the only way to save our biggest banks, said Paul Krugman in The New York Times. Citi and Bank of America could lose far more than they're worth in the next few years, so only the government—not private investors—can keep them afloat. "The longer we live with zombie banks, the harder it will be to end the economic crisis."

"The chorus for nationalizing America's struggling banks is growing louder," said Gerald O'Driscoll Jr. in The Wall Street Journal. But Congress would promptly politicize the seized assets, and government meddling—deposit insurance, access to the Fed's lending—is already part of the problem. Rather than entangling them further, "we need to find ways to extricate banks from government's deadly embrace."

"The argument here is silly," said Michael Silverstein in The Moderate Voice. "Bank nationalization is already well underway. Twenty-five banks were taken over by the government last year and more than a dozen so far this year." So let's add Citigroup and Bank of America to the list—"do it quickly, and move on."