failout

Such is the title of the latest BusinessWeek.com debate. Taking the “con” side is CEI’s own Eli Lehrer, who argues (in part):

Long-term government bank ownership, in any case, would simply make the country poorer. Banks actually create money when they lend it out, but doing so only has positive overall economic consequences when the loans get repaid. Government-owned banks would face enormous, understandable pressure to lend to politically powerful groups and industries that can’t reasonably repay their loans. Even the best managers couldn’t overcome this pressure.

Even in the “post-partisan” paradise of the Obama Era, public choice still matters!

*Photo credit: Declan McCullagh.