Published on Wednesday, February 25, 2009 by Campaign for America's Future

Nationalization: It's Not Scary, It's All Around You

by David Sirota

Amidst the punditocracy's handwringing about the supposedly unprecedented possibility of nationalization in America, Paul Krugman this week reminded his New York Times readers that nationalization is "as American as apple pie." He noted that the Federal Deposit Insurance Corporation has been nationalizing about two banks per week, and that the best way to save our financial system is to temporarily nationalize it. But before we get scared about the prospect of nationalization (ie. public/government ownership of major parts of the economy), let's remember: nationalization already pervades far more than the banking industry - it's all around us.

For instance, about 45 million Americans rely on public power utilities for their electricity. Those utilities are nationalized - that is, they are owned and operated by government (in this case, municipal governments).

Have you ever taken a subway, a commuter train like New Jersey Transit, a public bus or Amtrak? Have you ever sent a letter through the U.S. Postal Service? Then you've benefited from nationalized services - in those cases, mass transit and mail.

Then there's the health care system, with Medicare creating a quasi-nationalization model, and the Veterans Administration providing a fully nationalized system. And what do you know? Medicare is wildly popular, and the VA system is renowned for its quality.

These are just a few examples of nationalization in our midst. And as Harvard's Richard Parker notes in Newsweek, our country has a solid record of responsible nationalization during major crises. In his essay entitled, "Not a Dirty Word," he reports:

In World War I, the nations' railroads were successfully nationalized to sustain the war effort. In the 1930s, the Reconstruction Finance Corp. bought millions of shares in over 6,000 banks in order to rescue them. During World War II, government took control of the economy's entire pricing system for consumer goods-a more complex job than taking over several big banks-and did quite well at it, most economists agree. In the 1980s, the Resolution Trust Corp. seized hundreds of failed savings and loans in order to save the system. After 9/11, the government effectively nationalized the private-security firms at airports, and replaced them with the federal TSA.

So the next time you hear Rush Limbaugh or some teevee pundit blathering on about the economic crisis and claiming nationalization is dangerous and un-American, remember: nationalization is everywhere in America, and has been for a long time - and it has worked quite well when done responsibly.

© 2009 David Sirota

David Sirota is a bestselling author whose newest book is "The Uprising." He is a fellow at the Campaign for America's Future and a board member of the Progressive States Network-both nonpartisan organizations. His blog is at www.credoaction.com/sirota.