It is Monday morning, and Paul Krugman is on her perch at the New York Times, this time squawking the “N-word,” Nationalization. Now, “Nationalization” is a nice word for socialism, and according to Krugman, socialism or some form of it will solve all our economic ills.

As usual, there are some real howlers in his brief prose, but given that policymakers are hanging onto his every word, it behooves us to see what the other side is saying. Not surprisingly, he starts with Alan Greenspan:

Comrade Greenspan wants us to seize the economy’s commanding heights.

O.K., not exactly. What Alan Greenspan, the former Federal Reserve chairman — and a staunch defender of free markets — actually said was, “It may be necessary to temporarily nationalize some banks in order to facilitate a swift and orderly restructuring.” I agree.

This is hilarious, and it is Krugman to the core. You see, if Greenspan, who believes in free markets, wants the government to completely take over the banks, then only a hard-core ideologue would be against it.

He ends the column with something that to me is quite contradictory, but that is par for the course with Krugman:

The Obama administration, says Robert Gibbs, the White House spokesman, believes “that a privately held banking system is the correct way to go.” So do we all. But what we have now isn’t private enterprise, it’s lemon socialism: banks get the upside but taxpayers bear the risks. And it’s perpetuating zombie banks, blocking economic recovery.

What we want is a system in which banks own the downs as well as the ups. And the road to that system runs through nationalization.

Now, I will say that I agree wholeheartedly that ours should be a system of profits and losses. Yet, the very institutions that have been high on Krugman’s list of “sound and wonderful” institutions, i.e. Fannie and Freddie, took their actions based precisely on the fact that the government was backstopping their losses. From Fannie and Freddie to FDIC, the “we have your back” mantra has been the backbone of the financial system, and reality finally has arrived, something that a hardcore statist like Krugman is incapable of understanding.

I would recommend that readers look at an economist who really does know of what he speaks, Robert Higgs. Today’s article has more sense and economic understanding than the combined good sense in everything Krugman ever has written.