Editor's Letter: The new N-word

Why do officials bristle at the suggestion that they are moving toward bank "nationalization"?

It has been called the new N-word, and while it has nothing to do with race, it may be nearly as incendiary. Over the past few weeks, the Obama administration has been issuing increasingly dire warnings about the precarious state of the nation’s financial system and the urgent need for additional federal intervention. But officials have bristled at any suggestion that they’re moving toward bank “nationalization.” Sure, there may be a new kind of “public-private partnership” between banks and the government, and, yes, some major banks may be placed in “temporary receivership” as part of a “pre-privatization” process. The government could soon even take a “partial ownership stake” in Citigroup. But nationalizing the banks? In capitalist America? No way.

I wonder whether Team Obama has been secretly conferring with Frank Luntz. He’s the Republican consultant who helped reshape the political landscape in the 1990s by advising Republicans on how to use language more, shall we say, effectively. So the time-honored estate tax was transformed into the dreaded death tax, and global warming morphed into the more benign climate change. In politics, Luntz observed, naming an issue can be half the battle. After a presidential campaign in which Obama was accused of having socialistic tendencies, it’s unlikely that his bank-rescue efforts will ever include the word “nationalization”—which for many people conjures up images of Soviet commissars and Latin American despots. Only 37 percent of Americans, a USA Today/Gallup poll found this week, support “temporary nationalization” of failing banks. Ah, but 54 percent favor a “temporary government takeover” of failing banks—which happens to be the same thing. The people have spoken.

Eric Effron

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