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Central Banking or Nationalized Banks?

In the aftermath of the bubble burst in '08, Iceland took a radically different path than the United States after their financial crisis and nationalized the banks, threw some people responsible for the crash in jail and bailed out the homeowners instead of worrying about only bailing out the banks. And now they're coming back and their economy is growing again... http://goo.gl/QuKGA

When the banks in Norway declined in 1992, the government simply nationalized them (instead of bailing them out leaving the tax payer to pay the bill) which gave the banking business a breather and was ultimately beneficial for its citizens, because the banking business returned to more traditional banking values, though it only was for a short period of time.

So, in terms of public prosperity is there any merit left to keep the current central banking system, with many private banks and one central bank, instead of nationalized banks?


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    Oct 31 2012: Dear Mats

    You are not considering the fact that countries have different levels of corruption.
    In many countries doing this (nationalizing the private banks) would simply mean that the government will be able to steal more from the population.


    • Oct 31 2012: I do realize that there is a risk of corruption, but aren't the government by the people, for the people?
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        Nov 1 2012: No doubt it should be, but in many cases it's not...
        • Nov 1 2012: I hear you. But that usually would be the case in dictatorships, right? I think for the Western world, we wouldn't tolerate that.
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        Nov 1 2012: Hi Mats

        We have some nice examples in Latin America "democracies"...


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        Nov 1 2012: Hi Mats,

        yes, than can be an explample of "abuse" of power from my perspective (not the only one).
        if you are the president you need to care for all the population, not just the half that voted for you.
        but thats another discussion :)


        • Nov 1 2012: How exactly is he abusing his power? Chavez has always fought for the working class and the poor and when he nationalized Venezuela's oil production, the wealth went directly to the people decreasing poverty. It's a reason why he has sat in office for over 12 years. The rich guys will always manage either way.
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        Nov 1 2012: Dear Mats:

        Whats your base for that assumption? Have you ever being to Venezuela? Know many people from that country? Checked on the few reliable numbers available?



        Ps even if what you say is true, 12 years in power doesn't seam very democratic to me... Do you know that they have had elections in Cuba for decades and Fidel always wins? He must be really popular, and Cuba democratic.
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          Nov 2 2012: Thank you Julian

          Mats a whiff of the coffee?
        • Nov 3 2012: Chavez was the first president in Venezuela to launch social programs to help and alleviate poor people, which has resulted in poverty rate dropping dramatically, raising the education levels and improving the health care system for the poor. This doesn't mean that the country doesn't have problems.

          I base my assumptions on that it could have been far worse for Venezuelans. I don't necessarily agree with every single policy in the country and some things are pretty bad like the media censorship (if that is true however), but the fact that he nationalized the oil production is a sign that he cares about his people.
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          Nov 3 2012: To answer my question, I will take that as a nope
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        Nov 7 2012: Dear Mats:

        I have being to Venezuela and have friends and acquaintances from that country.
        I have many anecdotes to support my view, but let’s talk facts.

        I don’t know it by a fact, but I could bet that previous governments in Venezuela also had social programs, as do most countries in the world, if not all (we can argue about result if you have the data).

        Poverty rate:
        In 2011 poverty was 27.4% of the population with the lowest 10% of population consuming 1.7% of goods.

        Some other facts:
        26% inflation rate
        Country reserves of ~29bi, vs debt of ~90bi
        Oil is 95% of exports and 40% of federal budget revenues
        0 immigrants by 1000 people
        Maternal mortality: 92 deaths/ 100,000 live births
        Infant mortality: 20 deaths/1000 live births
        3.7% of children under 5 are underweight

        I understand that you have a political position you want to defend, but I believe information is far more persuasive than opinion (even if that opinion is repeated many times).
        Do you have any data to support you view?

        Things can always be better or worse, do you have any data to support why you think the current government was a good solution?

        Do you know where the money generated by oil production goes?

        Please answer with information supporting your reasoning.



        PS on a more personal note, I think you base your assumptions and political views on your life experience from Norway, so you extrapolate and believe it is somewhat similarly in other countries, except for the existence of bad and greedy people that abuse the population. Reality is more complicated and rhetoric and facts are not equal, and people are not always educated, corruption and violence are everyday facts in many countries, etc. I’m not saying that your view has no value, I just think you are not clear on your bias.

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