Is Northern Rock the End of Gordon Brown?

Forecasting about the futures of politicians is a game that this blogger eschews because I think that it is the hobby for charlatans. However, it is clear that since his elevation to the premiership, Gordon Brown has faced really difficult times and takes responsibility for bad policy decisions of his government. Anatole Kaletsky of the Times writes about the decision by Gordon brown to save Northern rock, a bank that has faced financial difficulty.

It is a fine article in terms of the analysis of the errors of the convoluted arrangement and the fact that it will merely ensure that tax payers assume the risks while the profits from the rescue package are largely taken by private corporations. I agree that it does not represent a good deal for British tax payers and represents political opportunism. As the piece states, as it stands, this is merely the "nationalization of risks and the privatization of gains".

This blogger accepts that the risk of contagion makes it necessary to attempt to forestall the collapse of banks. However, in light of the principle of considering the opportunity costs of such a delayed and expensive package in addition to the moral hazard, it is clear that decisions to save banks should be the exception as no bank should be saved at all costs.