In our continuing campaign against the use, and especially the Washington Post’s use, of the inaccurate and inflammatory term “nationalize” to describe the U.S. government’s purchase of $250 billion in preferred bank stock, we report progress! In today’s Post, two legit uses.
Op-ed columnnist David Ignatius refers to global developments as “quasi-nationalization” in “A Bailout Beijing Would Cheer“:
Free-market partisans in the West were shocked by the Chinese intervention and decried it as a dangerous precedent. But it helped stabilize the Hong Kong market. Now, that earlier bailout seems modest indeed — compared with the quasi-nationalization of the world’s leading banks we’re seeing this week.
Fair enough, and especially in an opinion column. The other mention is in a story about UBS’s difficulties, reporter Howard Schneider writes in “Swiss National Bank Takes $60B in Toxic UBS Assets“:
Swiss authorities moved to stabilize their storied banking system today, agreeing to move $60 billion in troubled assets from the books of financial giant UBS and into a special government-backed fund.
The Swiss government also invested $5 billion of public money into the bank, a reversal for a country that had taken a more hands off approach even as its European neighbors moved to shore up or even nationalize their financial institutions.
Accurate and fair.
Now, it’s possible the news has simply moved on and the bad newswriting featuring the term “nationalization” will return. But it’s also possible the editors and reporters acknowledged that the purchase of up to 3 percent of a bank’s assets does not equal government control and ownership, i.e., nationalization.
Seems like Treasury Secretary Paulson is also making the point, as reported in Bloomberg:
“The steps we’ve taken are absolutely the right steps, they’re bold steps, they’re strong steps to stabilize the financial markets and inject confidence into the banking system as well as capital,” Paulson said in an interview on CNBC television tonight. “I’m very confident that the moves we’ve taken will do just that.”
Paulson defended his proposal as “anything but” a nationalization of the country’s banking industry. He also distanced his effort from a U.K. plan to set aside as much as 50 billion pounds for equity stakes in the banks, provide 250 billion in interbank loan guarantees and 200 billion in a special liquidity program.
“What we’re doing is very different than what the British are doing,” he said.
Thank you, Mr. Secretary.
Larry Kudlow’s CNBC interview with Secretary Paulson is here.
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