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.

The front page of today’s Washington Post:

The Post is choosing to use a fundamentally misleading term for the federal government buying preferred stock, with no voting rights, to bolster a financial institution’s capital stock.

Nationalization means state ownership and operation of a company and its assets. Government control…

The government’s purchase of shares of a bank does not place that bank under government control, at least in any degree more than already-exercised control through the governent’s regulatory authorities.

And here’s the Post’s AM story, posted online at 8:34 a.m.: “Bush Defends Bank Nationalization.” And the lead:

President George Bush said this morning that the administration’s “unprecedented and aggressive” plan to partly nationalize nine major banks was an “essential short term measure to ensure the viability ” of a battered financial system.

 

“To partly nationalize.” What does that mean? What does that mean to the reader? Other publications chose other terms:

• The Wall Street Journal’s headline: “U.S. to Buy Stakes in Nation’s Largest Banks“
• New York Times: “U.S. INVESTING $250 BILLION TO BOLSTER BANK INDUSTRY; DOW SURGES 936 POINTS“

Both vastly superior.

Venezuela nationalized its oil industry in the ’70s, and in recent years the Hugo Chavez government has taken over other foreign-owned oil companies in the country by gaining at least 60 percent stake in the business. A controlling share. In many cases, at least in Latin America, nationalization and expropriation were interchangeable terms. The U.S. action is nowhere close.

We expect there was a healthy editorial discussion in the newsroom about the most accurate terms to describe the government’s investment of $250 billion in the banks. And we can’t help but imagine that some advocates of the term wanted to use “nationalization” to point out the hypocricy of a supposedly free-market Administration supporting government investment in institutions.

In any case, the government’s action is a big, big deal. But it’s not nationalization, partly or otherwise.

(Days like this make one thankful for the Newseum and its online posting of page ones. A wonderful resource.)

UPDATE (10:14 a.m.): Looks the editorial debate is continuing, at least in the online portion of the company. The Post’s online headline for the same story that previously proclaimed “Bush Defends Bank Nationalization” is “Bush Defends Government Bank Investment.”