More Plan N

Yeah, I know, bunch of Plan N posts in the last week or so, but it's that important. Paul LaMonica at CNNMoney.com has a pretty good primer on the whole situation.

So which solution makes more sense? Nationalize to liquidate the ailing banks or nationalize to cure them?

One expert on Japan's lost decade said a marriage of these two strategies might be what could work best.

Hugh Patrick, a professor and director of the Center on Japanese Economy and Business at Columbia Business School, said there clearly needs to be more regulatory oversight of the most troubled banks. He said Japan took too long to truly take control of problem banks.

In some cases, the government may want to provide financing for stronger banks to take over weaker ones. "I wouldn't be surprised to see, either under forced circumstances or voluntarily, more consolidation in the banking sector," said Patrick.

But the only real way to fix the banking system, Patrick said, is to learn from Japan's mistakes and do what Alpert is suggesting, i.e. act more aggressively.

"If the U.S. nationalizes banks, it should be to clean up a particular institution, get its balance sheet straight and get rid of management," Patrick said. "The ultimate goal is to clean up banks enough so that private investors would be willing to invest capital in them. That is similar to what eventually happened in Japan."

Solid advice in the column and worth a read. It's also worth noting the sheer number of mainstream news sources calling for Obama to go ahead with Plan N. Both the right and the left see it as a necessary idea, and nobody's really asking anymore if we should have government control of banks, but when and how much, and for how long.

It's important to point out that more media sources are openly asking when and how this should be accomplished.