Good-bye privatisation; hello nationalisation Nationalise, don't take over

Quick, what's the difference between taking over a bank and nationalising it? About 13 points or so I read in Time magazine.

Its latest issue cites a Gallup/USA Today poll finding that 57 per cent of the American public oppose "temporarily nationalising US banks."

Only 44 per cent, however, oppose "temporarily taking [a bank] over." What a difference a word makes.

Take over is one of those phrasal verbs whose meanings are less than clear. We understand what's meant if one friend observes of another, "He really took over the conversation at dinner last night."

But just what does "taking over a bank" entail? It's not certain, other than that, should the federal government take over one of the really big ones, some would want to be sure the US Treasury had a seat on the Executive Office Redecorating Committee.

Nationalise, on the other hand, with all its syllables and its "ise" ending, sounds like something Mussolini would do. It is something he did, in fact.

The Italian government took over a number of ailing firms in the 1930s, among them carmaker Alfa Romeo. But Il Duce was not the only one in this game.

The early 20th century was full of nationalisations of large companies, notably railroads. Then after the Second World War, communist governments nationalised private companies in droves, virtually across the board in some cases.

It wasn't only communists, though; the French nationalised major banks and a number of other big companies as well during this period.

In 1956, the Egyptian government nationalised the Suez Canal, closing it to shipping for a time and buying out shareholders of the Suez Canal Co, the private entity that had been running it.

It was a clear sign of a shifting balance of power between the European colonial powers and the countries we now refer to as the developing world.

The counterpart to nationalisation is privatisation. Remember when that was the big buzzword? Enormous initial public offerings, notably of phone-company stocks, in places like Britain, Japan and Germany not only helped bring about the telecommunications revolution of the late 20th century but helped create equity investors out of millions who would otherwise never have ventured to own stocks.

If privatisation is a word drenched in eau de Reagan and parfum Thatcherite, nationalisation has about it more than a whiff of stale smoke.

The visuals it suggests are the grainy black-and-white of newsreel footage. It is a word from an era gone by or so I would have suggested until maybe six weeks ago.

Legislation has been introduced to give the Federal Deposit Insurance Corporation a credit line at the US Treasury worth half a trillion dollars.

Speculation abounds that the FDIC is getting ready to go after some really big institutions, not just the Anytown Community Bank.

Senator Lindsey Graham of South Carolina is one of a handful of Republicans saying that nationalisation shouldn't be off the table.

A few weeks ago, bank stock prices tumbled after Senator Christopher Dodd of Connecticut used the "n" word to refer to what might happen to some major US banks. Prices recovered somewhat after some damage control from the White House.

And a few days later, Federal Reserve Chairman Ben Bernanke told Congress, "We don't plan anything like" a full-scale nationalisation that wipes out stockholders. But the real surprise to me in the Gallup finding is that it's only 57 per cent who oppose temporary nationalisation, whatever they think it means.