Derek Thompson summarizes a new meme:

Here's the logic: If Geithner's plan fails, it will probably be for one of two reasons. The first is that a stress test reveals that the bank's assets are truly worthless, which makes nationalization appear more palatable to Wall Street. The second is that the bank's assets are valued too high for investors, in which case the private sector backs out, the plan falls apart, and we've crossed out one more idea on a list of ideas that ends with nationalization. As Kevin Drum explains, "far from making nationalization more difficult, its failure would make it both inevitable and broadly acceptable."

This is pretty clear at this point, no? And by doing it this way, transparently and carefully, the government only takes responsibility for those banks it truly has to. My hope, of course, is that nationalization, if it happens, is as narrowly confined as possible. So bring on the stress tests.

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