Still, isn’t nationalization un-American? No, it’s as American as apple pie.

Lately the Federal Deposit Insurance Corporation has been seizing banks it deems insolvent at the rate of about two a week. When the F.D.I.C. seizes a bank, it takes over the bank’s bad assets, pays off some of its debt, and resells the cleaned-up institution to private investors. And that’s exactly what advocates of temporary nationalization want to see happen, not just to the small banks the F.D.I.C. has been seizing, but to major banks that are similarly insolvent.

Mr. Roubini tells me that bank nationalization “is something the partisans would have regarded as anathema a few weeks ago. But when I and others put it in the context of the Swedish approach [of the 1990s] — i.e. you take banks over, you clean them up, and you sell them in rapid order to the private sector — it’s clear that it’s temporary. No one’s in favor of a permanent government takeover of the financial system.”

There’s another reason why the concept should appeal to (fiscal) conservatives, he explains. “The idea that government will fork out trillions of dollars to try to rescue financial institutions, and throw more money after bad dollars, is not appealing because then the fiscal cost is much larger. So rather than being seen as something Bolshevik, nationalization is seen as pragmatic. Paradoxically, the proposal is more market-friendly than the alternative of zombie banks.”

The US government may have to nationalise some banks on a temporary basis to fix the financial system and restore the flow of credit, Alan Greenspan, the former Federal Reserve chairman, has told the Financial Times.

In an interview, Mr Greenspan, who for decades was regarded as the high priest of laisser-faire capitalism, said nationalisation could be the least bad option left for policymakers.

”It may be necessary to temporarily nationalise some banks in order to facilitate a swift and orderly restructuring,” he said. “I understand that once in a hundred years this is what you do.”

• Greenspan backs bank nationalization – Financial Times

First, the current economic crisis will take years, not months, to get through. That’s important because we’re in this together and we need leaders who are giving us an honest assessment of now and what we can expect from the stimulus and other actions. On the individual level, we can all ask ourselves, whether or not we’ve been good stewards of our own finances. Were we a part of the built-on-credit false economy? Are we hurting more now because we are personally over extended.

Second. Although the media and the Republicans (who are establishing their “just say no” strategy) are currently focusing on the stimulus bill, the most important structural action we can take is to continue the rescue of the financial sector. The president said Treasury Secretary Geithner will be rolling out financial sector reforms. If this includes “nationalization” of some very large private sector banks or financial services companies, look out for hand wringing from the right. This won’t be some banana republic nationalization that erodes business and wastes economic resources. Essentially, the government will step in, clean up the business and balance sheets and sell the company back to the private sector. This can be done two to three years. Conservative dogma should not hold the day on this issue.