Nationalizing Our Banks?

Nationalizing our banking system is a scary thought. The key to nationalization is that the government actually owns and runs the banking institution, but so far that is not what they are doing, getting close but not quite yet. Our government has pumped billions of dollars into banks that are “too big to fail” in a plan they call TARP. This Troubled Asset Relief Program (TARP) is designed by the government to insure the bank’s most toxic assets, but has been extremely unregulated and left large banks with no accountability or decree for the usage of the funds. The government truly does not want to own the banks; the original goal of TARP was to protect the common shareholders giving the company incentive to raise the necessary capital through the market. First of all why have we allowed banks to get too big to fail, leaving a gigantic burden on taxpayers? Maybe we should limit the size of banks so they can be more manageable and not as risky. Smaller banks that have failed have been taken over by the FDIC and no depositors within the monetary limit have lost their funds. There was a great report on 60 Minutes that revealed that exact process, it was extremely enlightening and interesting. http://www.cbsnews.com/stories/2009/03/06/60minutes/main4848047.shtml
So why, as taxpayers, are we accountable for the intense risk of these “government-guaranteed securities” for big banks, when smaller banks simply get bought out or closed down? Does this behavior not send a message that taking unhealthy large risks towards rapid growth is a good thing simply because the hardworking people of this country will back you if you fail? We have a huge mess and no uncomplicated way to clean it up. Nationalizing banks is not a cleanup tactic I condone.