Black Swans and Black Suits

Nouriel Rabini, writing in the Wall Street Journal today, comes out on our side for nationalizing the banks. Here's a short, cogent excerpt from the interview, "Mr. Roubini tells me that bank nationalization "is something the partisans would have regarded as anathema a few weeks ago. But when I and others put it in the context of the Swedish approach [of the 1990s] -- i.e. you take banks over, you clean them up, and you sell them in rapid order to the private sector -- it's clear that it's temporary. No one's in favor of a permanent government takeover of the financial system." (The Wall Street Journal, Online Edition, January 21st, 2009)

He talks about Greenspan's intellectually slavish adoption of Ayn Rand's economic view, and the Bush administration's disastrous idea of turning the Fed into the "lender of only resort." What's needed now is not a discussion about the merits of a free market system--an academic concept--but rather decisive action.