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What Is Lindsey Graham Up To?


You may recall that Lindsey Graham has been strongly intimating we should nationalize our banks. Not only that, but he says several other Republican senators are open to it.

So why won't Democrats, many of whom feel the same way, at least discuss it with him? Obviously one issue is the enormous complexity, which everyone would like to avoid. But the bigger hold-up is that Democrats just don't trust Graham. The same senior Senate aide I spoke with yesterday told me, "I think they’re betting on failure. I don’t know what his angle is. I’m hesitant to give him credit given my severe loathing for the guy."

Then today, another senior Democratic source elaborated, suggesting Democrats think Graham's nationalization comments are designed to talk down the banks' stock, making it impossible (as opposed to just extremely difficult) to attract private capital and making nationalization more likely. That is, the fear is that Graham wants to force the Democrats' hands. “These people say ‘free markets,’ ‘leave everything alone,’ ‘let them fail,’” says the source. “Now all of a sudden they’re saying ‘nationalize the banks?'” The cynicism is just incredible.”

For what it's worth, I'm personally torn. There are plenty of reasons to be suspicious of Graham and the Republican caucus. But he did sound genuinely exercised about the situation when he spoke to the Financial Times last week. (Graham’s office didn't return a call seeking comment.) And even Democratic senators like Chris Dodd and Chuck Schumer have inadvertently talked the markets down with comments about nationalization.

--Noam Scheiber