Why I am Skeptical of Alan Greenspan

I am a freshman in college.  I am not an economist.  My grades in economics classes are, in fact, good, but far from perfect.  It may seem presumptuous and downright insane to quibble with Alan Greenspan where economics are concerned, but I feel that something ought to be said when we start talking about the temporary nationalization of banks.  I may not know a massive amount about the economy, but as a student of history, I know that where government is concerned, very little is "temporary."

Ronald Reagan once famously said that a government bureau is the closest thing we will ever see to eternal life.  This idea is more or less the basis for my skepticism of supposedly "temporary" bank nationalization.  Mr. Greenspan may be right that temporary nationalization of financial institutions will be necessary to float the economy, but the struggle would be making that nationalization temporary.  It is almost axiomatic that government never gives up power willingly.  Once the government gets a new portfolio of responsibility, it does not like to let go of that power.  While state management, however revolting my principles may find it, may succeed in restructuring these institutions and putting them back in operation, there is no guarantee that the government would release them back to the open market in due course.  All instituions have internal goals in addition to their external ones, and government's instinctive internal goal is to keep as much under its oversight as it can manage.  The trouble with government institutions is that they can only downsize by government mandate.  Parastatal industries such as PEMEX in Mexico survive because of state support despite their prodigious inefficiency, and the last time I checked, Social Security hasn't gone out of business either.

As one generally inclined to small government and free markets, the idea of state management of private institutions wreaks a noxious socialist odor, but I am nowhere nearly as knowledgable as Mr. Greenspan is where economics are concerned, so as much as it may pain me to say so, he might be right about this.  If nationalization should occur, then it will take a truly dynamic and strong-willed leader like Margaret Thatcher to claw the fist of government away from the economcy, and I am still looking for that leader.