Since first advocating the Nationalisation of Ireland’s banking system in February here, public dialogue has shifted the focus of the debate. Although not lightly considered, Nationalisation is still a better option than the plan currently proposed by the government under the National Asset Management Agency. At least the government would then be pouring money into assets that it already owns, rather than simply bailing out share-holders.
It is sometimes the task of those commenting upon government policy to pragmatically limit consideration to those options which are politically possible, and palatable to the vagaries of public opinion. These are the constraints in which public debates takes place.
Government intervention in the market caused the current financial crisis. In the US, artificially low interest rates created the credit which was released to sub-prime borrowers who could not afford it. Politicised lending is recognised now as a major source of the toxic assets plaguing today’s banks. However, the best course of action available today to the Irish government could be the most strenuous government intervention – in the form of nationalisation.