The whole banking system should be Nationalised.

"What's really required is an entirely different kind of government intervention in the economy.

For starters, the banking system should be nationalized. This could provide immediate relief for the international credit squeeze, in which banks are choking off economic growth by refusing to lend to one another.

The next order of business: ban the Wall Street casino for high-stakes gambling on incomprehensible investments like "collateralized debt obligations" and "credit default swaps." The banks' ability to damage our livelihoods with their speculation should be ended immediately.

Nationalized banks are nothing new. For much of the second half of the 20th century, they were the norm in Western Europe, and they remained capitalist institutions to boot. But a nationalized banking system would at least provide more public accountability over the operations of these institutions and subject them to greater political pressure.

What's more, it's hard to describe the federal government's recent adventures in the banking industry as something other than nationalization. In the past week, the FDIC seized control of Washington Mutual (the largest savings and loan in the country) and sold it to Bank of America at a bargain-basement price, and then put Wachovia (the fourth-largest bank) out of its misery with a forced sale to Citigroup.

But to sweeten the latter deal, the FDIC had to agree to cover any losses in excess of $42 billion out of the $312 billion of bad debt on Wachovia's books. Yet Citigroup gets to keep the profits from having a bigger share of the market. Why shouldn't taxpayers get the gains from this merger, instead of just the losses?

After three decades of free-market dogma pushed by both Republicans and Democrats, nationalization of the banks might seem unthinkably radical for the U.S. But it was the Wall Street conservative Republican Paulson who presided over the nationalization of mortgage lenders Fannie Mae and Freddy Mac, and the insurance giant AIG.

Paulson's $700 billion bailout plan is also a form of nationalization, but one that socializes the banks' losses at taxpayers' expense, while leaving the profits in private hands. Why not take control of the banks outright, and send their corrupt and incompetent executives packing?

An economic bailout on pro-worker terms would include much more than nationalizing the banks.

There would be a moratorium on home foreclosures, mandatory renegotiations of adjustable-rate mortgages, and incentives to convert empty, newly constructed condominiums into affordable rental housing. Also badly needed is a plan to create jobs, starting with a public works infrastructure program that could rebuild schools and housing in run-down inner cities. The expansion of public transportation and government investment in alternative energy would also be priorities.

Such a program is a long way from what's being discussed in Washington. For their part, Democrats from Barack Obama on down are content to attack the Republicans as the source of the economic catastrophe. That may be enough to get them elected, but the policies they promote don't even begin to address the scale of the problem.

This economic crisis is still in its early stages, but it's already clear that the old ideology of the free market is out. However, nothing has appeared to replace it, and so the mainstream political and economic discussions are a muddle of old ideas and half-baked schemes.

We need to start the debate on the real alternatives now — to raise the ideas, the strategies and the organization that working people need to resist the attempt to make them pay for the crisis"

Lee Sustar ...Socialist Worker. Whole article