A left-leaning Christian Democrat colleague has just fired over an interesting link to an blog post by Paul Krugman, a Keynesian economist who was recently awarded the Nobel Prize in Economics, outlining the various anti-nationalization arguments abounding on centre-right blogs across the globe.
It's well worth a look.
Among the arguments Krugman outlines (and then promptly disagrees with), I find the following response to a blog post by Alan Blinder particularly interesting:
"...why can’t a bank just split itself, giving the bad stuff to one piece and the good stuff to the other? Because it has to divvy up the liabilities as well as the assets. And if it gives the bad bank (which isn’t solvent) a bunch of the liabilities, this amounts to defaulting on its debts — and the bondholders will sue. So the good bank-bad bank thing seems to implicitly carry the assumption that someone, namely you and me in our capacity as taxpayers, guarantees the bad bank’s liabilities"
While human beings are naturally hesitant to leave their comfort zones, Krugman's 'Conscience of a Liberal' blog is well worth the occasional browse.
