What is happening to free-markets?
What is happening to private industry?
Will every industry be nationalized?
After Britain announced a second bank bailout today thanks to RBS (Royal Bank of Scotland) among other things; “RBS said its losses for the full year could be as much as 28 billion pounds ($41.3 billion), which would be the biggest loss ever by a British corporation.” According to the AP article, the British people now own 70% of the bank! Additionally, “Brown’s (Gordon Brown) plan will also see 50 billion pounds (about $74 billion) set-aside to create a special fund for the Bank of England to buy high quality loans and other assets directly from banks. That plan is also aimed at bringing down borrowing costs.”
Bloomberg reports: “RBS’s shares tumbled 67 percent in London trading yesterday, the most in two decades, on speculation the government may take full control of the bank. The loans agreement marks the government’s most direct intervention in the management of U.K. banks since the credit crisis started. Prime Minister Gordon Brown said yesterday he is “angry” banks are rationing credit, pushing the economy deeper into its worst recession since World War II.
“The government wants to take control, dictate lending policies, dictate banks’ views of their assets, and generally interfere with what are private companies,” the U.K. Shareholders Association said in a statement, describing Brown’s plan as “creeping nationalization.”
So . . . will this creeping nationalism strike the US banking industry? As two of our largest banks hit new lows last week (Chase & Bank of America) it looks like it will.
Where does it go from here?
Will the trend stop at the banking industry? What industry will be nationalized next?
Perhaps in a few hours we’ll get a glimpse from the new President what he has in store . . .