Nationalizations in the UK

Britain under Gordon Brown is doing what a lot of folks — Paul Krugman, Nouriel Roubini, and others to whom I’ve pledged my financial crisis allegiance — have been saying the United States ought to do — putting up a big kitty of money to buy stakes in banks that need recapitalization rather than to buy bad assets from banks. Under the circumstances, I think it’s genuinely unfair to do what the New York Times does and call Brown’s plan a “huge bank bailout.” Private firms don’t ordinarily relish a scenario wherein their partially nationalized at bargain bin prices, and that’s what Brown’s doing.

Meanwhile, my sense is that the nature of this problem is that a medium-sized country like the UK or Spain can’t, fundamentally, do very much to resolve the issues. They can perhaps take stopgap measures to stave off total collapse, but economic globalization has gone far enough that there’s a real need for coordination among all the major countries.