Why nationalization of the U.S. banking system is a bad idea.

There’s been an increased discussion of the possibility the U.S. government may nationalize the banking system. I came across this article today, that outlines some FAQ’s on the topic, but here is the money quote:

“If the government takes over a bank, management will be under even more pressure to cut costs. Expect more branch closings and poorer customer service. “Think of the bank as the DMV of the future, run by government employees who have little upward mobility,” says Mr. Kaytes.”

In short, banks will be less open to innovation and there will be less competition. All of this means worse service, lower savings rates and higher fees.

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