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You can safely ignore almost everything written about the Northern Rock fiasco. Most of it is repetitive and misses the real point. But on no account miss the great Anatole Kaletsky who gets to the heart of it: He should have announced that Northern Rock would be nationalised not to keep it in business, but to close it down; that the bank would stop lending new money or accepting new deposits as of tomorrow; that all the company's retail deposits would be shifted immediately to the National Savings system, while all the wholesale bonds would be replaced with Government gilts. The company would then be put into run-off, with the Treasury recouping its money gradually as existing borrowers repaid their mortgages over the years.
Nationalisation, in other words, made sense only as a necessary legal stepping-stone to the orderly liquidation that Northern Rock required as soon as it ran out of money in September.
To use nationalisation to keep the bank in business and its staff in state-subsidised employment would be a travesty of all the economic principles that