Politicizing Banks Would be a Step in the Wrong Direction (Rep. J. Gresham Barrett)
The fact is government has a horrendous track record of managing finances. One need look no further than the so-called stimulus package that was hastily passed into law last week for proof of that fact.
As if that wasn’t proof enough, do we really need to be reminded that at the center of our economic crisis lay two quasi-governmental financial monsters with incompatible, politically-motivated missions: Freddie Mac and Fannie Mae. The mismanagement at these two firms shook our struggling economy to its core, and the aftershocks are still being felt
today. Just last week, the administration announced that it would be doubling the taxpayers’ pledge to back Fannie and Freddie in order to ease the impact of their bad decisions.
A particularly troubling possibility that could accompany a bank nationalization plan is that politicians would potentially have a large say in who receives loans and for how much. Unfortunately, politicians haven’t shown a propensity for purity of motives. Certain companies, or individuals for that matter, might be given favor depending on their political leanings.
Government certainly has a role to play in restoring our country’s financial footing, but any action we take must be temporary and targeted towards getting the private sector working again. Politicizing banks would be a step in the wrong direction.