Calling Soros a communist is pretty rich, given that he dedicated most of his life and a fair bit of wealth to fighting communism in Eastern Europe including his native Hungary, and to creating a smooth transition to free markets in those countries. Interestingly, however, I get the impression the WSJ has slightly mischaracterized what Soros was talking about. And by slightly, I mean in a FauxNews/WorldNetDaily kind of way. Ironically, it was WND that clued me into this when it mentioned what Soros referred to, the Swedish banking crisis of 1992-93, because back in April it was something heavily talked about as TARP was unfolding. Rather humourous, Soros was as I recall one of the speculators who targeted the SEK's fixed exchange rate, which forced the Swedish Central Bank to jack interest rates up with alarming speed to defend the krona), which in part precipitated the mess. Soros made a lot of his wealth using his hedge fund to speculate on currency, using huge leverage to make fortunes off of the slightest arbitrage opportunities.
The part that this article is leaving out is crucial. The "nationalization" was really just a recapitalization with some measure of state control - and more importantly - it was
temporary. An excellent explanation of the process is here:
http://www.clevelandfed.org/research/POLICYDIS/pdp21.pdfThe reason that the AMCs were organized and they were done in the described manner is ultimately fairly simple. The liquidation process, if done suddenly, would have made things substantially worse, flooding an already saturated market with the variety of collateral assets the banks held, and making clear that the banks would never recover the value thereof, and the bailout cost as a result would be massive.
The Swedish economy rebounded faster than expected and the AMCs were then liquidated, spinning the banks back into the market once things were done. It was a brilliant plan, and it worked. The initial outlay was about 4% of Sweden's GDP. Measuring the actual cost is a little more complicated because the liquidation recouped a lot of it, but the SEK was devalued by that point because it became a floating currency, and I haven't seen a detailed analysis, though there are people who make the case that the government actually profited or at least broke even on the deal by the time the process was completed in 1997. That's why Soros advocated it, the guy's smart, and whenever people accuse him of being a socialist or a communist it only servces to prove they have basically no idea what they're talking about.
George Soros critisism is interesting; instead of hobbling the banks with regulation and leaving ownership responsibilities with the shareholders while directing the economic output (Fascism), Soros want the government to nationalize the banks and seize shareholder and depositor wealth (Communism). Suggesting Americans would find this popular is....interesting. The end result is pretty much the same, the only real difference is who (besides depositors) gets to feel the pain:
http://online.wsj.com/article/SB10001424052748704089904575093760994295890.html?mod=googlenews_wsj