That is the question.  Banks that is.  I have been having a socialism conversation recently with a few of my readers and I thought I would do a bit of research to see what was what.

This from James Saft of Rueters:

Nationalisation of weak banks in Britain and the United States may be preferable to current plans for insurance and soft “bad banks” schemes which risk being swamped by future losses as assets, especially real estate, continue to crater.

An insurance programme, getting banks to identify their riskiest assets to the government which will insure them for a fee, is one of the main planks of a UK plan to bail out banks unveiled this week.

Both Citigroup and Bank of America have already received loss protection arrangements from the government. The betting is now that the United States will opt for some sort of a “bad bank” aggregator which will buy up doubtful assets from banks, with the emphasis on keeping as many as possible operating as publicly traded entities which, once shorn of their bad debts, would be viable and would lend.

With that said I feel that we may have already done so.  Why do I say that?

Easy answer.

Before I give that answer I want to point out that the solution was originally started by a Republican administration so let us not put all the blame on the Dems, okay?

Now, the answer.  If an institution cannot exist without taxpayer money, then that institution has been nationalized.  The major banks have received a massive taxpayer infusion– we now own them–Nationalization 101.

Will we make money off the deal?  Someone will, but not the taxpayer.