Thursday, December 04, 2008
Seumas Milne on why it's time to nationalise the banks
We know that Darling has made contingency plans for control over lending rates, as well as outright nationalisation. But at every stage of the crisis, ministers have shrunk from anything that might be seen to encroach on the independence of the private bankers whose reckless failure has been at the heart of the meltdown.
Even now, ministers insist on informal pressure and an arm's length relationship with the banks the government itself owns, and hope that modest adjustments to the bailout terms will do the trick. It isn't working. Darling is already speculating about the need for further eye-watering injections of capital. The logic in favour of bringing all the main banks into public ownership as the cheapest and most effective way of ending the squeeze and directing credit into the productive economy is becoming ever stronger as the crisis deepens. It may turn out to be the only way.
You can read the whole of Seumas' brilliant piece on what the British government needs to do next, here.