But if the government directly controls major financial institutions, that would give the new administration extraordinary leverage over the national economy. Suppose the new CEO of AIG decided he didn't want to insure assets of companies whose executives make unseemly multiples of the national median income? There are all kinds of crazy things you could do. And of course not all of them woul dbe good ideas. But some of them would! And the smart folks on our side need to be figuring out which ones they are. It seems doubtful to me that a progressive administration would ever be able to get away with this much nationalizing of everything, but what's done is done and I think it creates a real opportunity for "socially conscious insurance underwriting" or whatever you care to call it.
You see, with state control of private industry, you have no volatility, and those becoming fabulously powerful do it out of love for the worker and have modest salaries. You never heard about recessions or financial panics in Russia, even in the 1930's when millions of Americans were out of work while every Russian was occupied in some way. Further, just think about how awesome the world would be if disinterested smart people could make all the decisions! Regular people are so dumb. I don't see how it could go wrong.