New York Governor David Paterson said Friday that he is cautiously open to bank nationalization, now a front-burner political issue, as a measure to avoid economic catastrophe.
"I would compare it to taking antibiotics, which would probably kill you if you took them everyday," he said of nationalization. "But you take them when you are sick. And our country is in a massive downturn amid a global decline that is probably even greater than the United States' situation. ... I don't know that I would endorse it. But there are a lot of pills we have to swallow and that is one to be considered."
The remarks, delivered outside the White House following a meeting of the president and governors, come amid reports that the U.S. government is considering taking as much as a 40 percent stake in Citigroup. Paterson has said that he is not involved in those talks.
The Governor's New York colleague Sen. Chuck Schumer -- who, like the governor, has a constituency that includes much of the banking industry management -- has expressed support for short-term nationalization.
Asked by the Huffington Post to offer his take on the situation, Paterson replied:
"I think that what happened in Great Britain is that they started recapitalizing the banks, and this is how this country got out of a lot of the problems it had during the Great Depression. You don't really want to do this. But if you don't find a way to get rid of those bad assets, then you are going to perpetuate the problem. And with five to six trillion dollars lost in bank money around the world, some of the resources that we are spending on, I think, have been wisely done. It is not what you want to do. And it is probably a terrible thing to do in a normal economy."