Atlantic Business, up and running

You'll find the link here; I believe that Megan McArdle has a role in managing the site.

And who do I choose to link to but myself.  Here is my guest post on bank nationalization.  I could have stressed further that bank nationalization works best in small countries with a small number of banks.  The more banks a country has, the greater the danger that nationalizing a few of them will make the rest much harder to recapitalize, thereby leading to a kind of contagious need for nationalization.

But enough of me (can any blogger say that with a straight face?).  Here is a good post on the perils of Medicare reform.


Re nationalization, so if we nationalize insolvent banks, private investors will not put capital into bank X because they think the government will nationalize bank X. Ergo, they think bank X is or will be insolvent. What kind of investors are these, anyway? Can't the darn fools run a bank well enough to keep it solvent? Especially since they are competing against government run (i.e., incompetent, inefficient) banks?

Seems like an argument that investors are too big of boobs to be trusted to run banks. Hard to argue against these days, I guess, although I believe that in a well regulated system private banks should outperform government run banks.

Nationalization of an _insolvent_ bank is no worse than bankrupcy from the point of view of private investors. It is exactly what they could expect in a free market.

As best I can determine, it is mostly about what happens to the bank after they are out of the picture. Is it liquidated? Immediatly sold off to new investors? Or is it operated by the government.

If the government begins nationalizing solvent banks without adequate compensation, then that should deter investors.

Now, of course, it is true that if the goverment bails out insolvent banks and so limits the losses of the owners, then more private capital will be attracted. The heads the investor wins, tails the taxpayer loses, will result in too much investment into banks. And, of course, in banks with risky investmnet strategies that pay with heads and stick the taxpayer with a big cost if tails come up.

FDIC has been taking over insovlent banks for decades. Why is it suddenly being called "nationalization?" If it is really the word that creates fear in the heart of investors, why is the word being used for something that has been done for years?

Is it all about the Sweden envy of blue state intellectuals. If the glorious Swedes "nationalized" their banks, we should to.

That is exactly what has happened in Ireland and to a lessor extent the UK. Of course everyone would _want_ private capital, but absent that, nationalisation looks cheaper and quicker. Unfortunatley, the UK has fully nationalised two and a half banks, the Belgians two, the irish and dutch one each ... not much capital there...

Medicare DME has a long history of being screwed up.

The logical place to get the necessary equipment would be from your physician, but historically some members of Congress (think Stark) got all pissy when physicians made profits, so a whole breed of DME sharks jumped into the vacumn.

It has been and will be a mess for the foreseeable future.

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