Do the Right Thing

Absolutely, incredibly, utterly wrong! | Anatole Kaletsky - Times Online

Well, no, actually. Kaletsky fails to make the crucial point that banks are not like other businesses and that the failure of the Rock would have been cataclysmic both economically (it would, in effect, have destroyed the UK banking sector because the Bank of England's credibility as lender of last resort (backed by the Treasury) would have been removed, which would cast doubt on the stability of other mortgage banks heavily exposed to subprime debt and probably led to the failure of other banks such as the Alliance and Leicester and Bradford and Bingley; it would also have shattered the reputation of the golden circle of the British banking club - the chief executives of the large retail banks didn't go to the Governor of the Bank of England with a joint rescue plan) and politically (first UK bank to fail since the C19th, queues around the block at the A&L and the B&B like in some banana republic, tens of thousands of (medium to large) savers seriously out of pocket).

Darling has finally done what the Razor urged him to do in November. This ought to cost Darling his job; I can only hope that it doesn't cost Brown his job. It's like going to the dentist: an ounce of courage now will save a pound of grief later. Nationialising in the autumn would have been politically unpalatable, but at least it would have demonstrated boldness and decisiveness and it would have played well in the Labour heartlands (I know, I know). We've ended up with something close to the worst possible scenario. I fear this is Labour's Black Wednesday, but I take heart from the fact that only once in the postwar period (in 1970) has a government with a working majority been replaced overnight by a government of the opposite political complexion. And Labour still has that photograph of Cameron at the Bullingdon Club...   

Blogged with Flock