Washington (CNSNews.com) - Sen. Lamar Alexander (R.-Tenn.) told CNSNews.com that fellow Tennesseean Andrew Jackson would "roll over in his grave" were he to hear House Speaker Nancy Pelosi talk about the possibility of the federal government nationalizing banks.
The speaker’s suggestion that the government acquire more “equity” in the nation’s struggling financial institutions would have been anathema to Jackson.
“He based his whole presidency on getting rid of the national bank,” Alexander said of Jackson.
Alexander, the head of the Senate Republican Conference, said if Congress fixed the real problem--which, he said, is the housing crisis--that would “restore the condition of the banks so that we wouldn’t be talking about nationalizing banks.”
In an interview with George Stephanopoulos on ABC’s “This Week” that aired on Sunday, Pelosi (D-Calif.) said “some increased investment” on the part of the government is necessary to help resolve the country’s financial crisis.
When asked by Stephanopoulos if nationalization or partial nationalization would be a good idea, Pelosi said: “Well, whatever you want to call it. There has to be – if we are going to put money into the banks we certainly want equity for the American people.”
“If we are strengthening them, then the American people should get some of the upside of that strengthening. Some people call that nationalization. I’m not taking about total ownership" Pelosi said.
The speaker's comments came less than two weeks after the Senate voted to release $350 billion to help provide stability to deteriorating banks. As a result, taxpayers are now the largest shareholders in Bank of America (owning about 6 percent of stock) and in Citigroup (about 7.8 percent).
Though Pelosi didn’t call for total nationalization, Alexander said that there is still a cause for concern.
“Already, the government is the biggest shareholder in two big banks,” he said. “I think we need to be very careful about going further in that direction.”
Pelosi did say that greater government transparency would be necessary before any more money is devoted to financial institutions.
“Change has to happen in terms of what is done, what the transparency of it is, what the accountability of it is,” she said. “Only then would we be able to pass any additional funding.”
Alexander, meantime, proposed offering all Americans interest rates of 4 to 4-1/2 percent in order to help the value of homes “get back to where it needs to be.”
“I think that would restore the condition of the banks so that we wouldn’t be talking about nationalizing banks,” he added.