If half the money showered on banks over the past 18 months had been showered on the high street, I cannot believe the economy would be in such terrible shape. Indeed, if banks had been left to default on their casinos and public money spent instead on nationalising and guaranteeing their retail activities, there would have been traumas, as in Argentina and Iceland. But I bet the economy would now be recovering faster than it is. At very least the bank bailout policy deserves a Chilcot-style inquiry. The trouble is that this would need bankers to be honest, economists decisive and politicians humble. Forget it.
Wednesday, 26 January 2011
We should have let the banks fall
Every shade of opinion now seems to be coming around to the view often expressed on this blog, that we should have allowed Northern Rock to fall, and after it HBOS and any others. The scramble to bail out these bankrupt shibboleths is just so much wasted opportunity. As Simon Jenkins writes in the Guardian today: