nationalization of bank

Tuesday, October 14, 2008 is a remarkable day. U.S. invested $259 billion to bolster bank industry. We an view it as a shift of economic power from Wall street to Washington. In fact, U.S. was not the first country who took this action, instead it was European countries that first took the step. I think this is typical crisis action in crisis time. Personally, I think it is a wise movement.

One of the important causes of this damaging crisis is the overestimation of self-correcting power of free markets. Strong government capital can effectively help banks to refinance debt and regain the ability of lending money to customers, esp. small business I think. Though government buying stock of banks goes against the small government or even capitalism, we shouldn't give up this method just because this. What the government need to do now is to take strong actions to stop the crisis from growing bigger and bigger, which is the priority. Also, quot Bold Action With Basis in History by Steve Lohr, "the package does call for the government investments to be in three-year securities that the banks can repay at any time, when markets settle and conditions improve." There is time limit for this government's investments.

Though not all the banks that received investments are in equal bad situation and are in need of government capital, to inject capitals into major banks at the same time enable government to make banks follow certain principal together for common good of the society.

Both candidates approved this action. For Obama, I cannot see any influence to his presidential campaign; while for McCain, bigger government can harm some of his republican voters emotionally.