Monday, February 23, 2009

Finding A Voice

This New York Times piece is refreshing:

In Latest Plan for Banks, U.S. Could Demand Voting Stake

Part of the reason the UK's bank bailout was so successful was that the Brown government required voting stake in the banks it assisted as part of the package. Paulson's initial financial bailout had no such provisions, and discussions of such in the next US bailout are few and far between. And here we have the Times trumpeting the news that this time the Treasury might take a controlling stake in the banks it bails out.

It is appalling that the US should only be asking for this sort of control now, after nearly a year of unconditional "support" for the banks. This lack of control allowed public largesse to flow to businesses little interested in the reforms and controls necessary to the economy's health. If Washington is at all serious this possible stake should be a required stake going forward: if we're buying out a financial institution we ought to have some say in how it operates, particularly as not having that voice has been catastrophically counterproductive so far.

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