As the last few weeks have progressed there has been growing consensus that for a short period of time the government will have to seize the commanding heights of the economy.
For Evidence of Consensus Please See:
Krugman
Greenspan(the godfather of Laizze-Faire)
Senator Dodd
Roubini
Senator Graham
Reich
Levitt (through Rosenfield)
Calculated Risk
The Guys at Marginal Revolution (we will call them the George Mason contingent)
And many others.
Over this time there has been a convergence of opinions from economists, policy makers, and politicians of every stripe. Today, the final elephant broke the back of the non-nationalization beast - constant media coverage (see anything from Bloomberg.com today). The ideas are somewhat different from different thinkers, but broadly their is consensus on nationalization, pre-privatization, receivership, or modified bankruptcy.
However, after the markets got crushed early in the day, there was a fairly substantial rally once Gibbs and Geithner started trumpeting their aversion to nationalization. According to Nate Silver and others this is merely a PR tactic that means they are actually considering nationalization.
For better information on the Swedish temporary nationalization (back in the day) read this. Many believe Japan's delay and Sweden's swift action are the difference in the two banking crises - the Powell Doctrine for financial crises.
The process would basically work like the FDIC's process when they take a bank over TEMPORARILY. To learn a little bit more about the process the FDIC goes through read a little more from a recent press release (when they took a bank over).
Is the process simple? No, by no means. But is the process necessary? Yes. It will most definitely put a strain on their resources, but it better than the alternative - can I get a Japan in the 1990s?
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