We’ve already seen America nationalize mortgages and the nation’s largest insurer, and now the U.S. government will be buying equity stakes in U.S. banks. Of all the elements of socialism, I think this is the best part so far, because it solves two problems by both injecting capital into cash strapped banks, while enabling taxpayers to share in the upside. Best of all, it will come out of the initial $700 billion, and not require an additional request from Congress. The key, though, is the implementation, and most importantly, government has to sell its shares when the market recovers so that it doesn’t have a permanent ownership stake in private banks.
