Bailing out Banks

[PoliticalNightmare]

I know this happened a long time ago. Instead of bailing out the banks after the last economic crisis, why couldn't the labour government simply nationalise them, kick out the multimillionaires responsible and then bail them out rather than effectively rewarding bad behaviour or allowing all the ordinary workers in the bank not responsible for the crisis to be penalised?

What exactly is the conservative argument against nationalising industries apart from the fact that 'people at the top won't work hard enough when they are not making ridiculous profit', which is clearly false.

Thanks.

[BAM]

There were bank nationalisations. Northern Rock obviously, but also Royal Bank of Scotland and Lloyds-HBOS (Halifax Bank of Scotland), in which the UK government owns something like 80% and 40% respectively. The government also nationalised Bradford and Bingley's mortgage business.

It wasn't so much about millionaires being responsible, but rather the way the banks acted in the market. It was market forces that lay behind the crisis, rather than moral failings of the people in charge.

Even being a natioanlised bank makes little difference: Northern Rock was, as of last year, repossessing homes at twice the rate of its commercial competitors. The notion that a state-owned bank is more ethical is an illusion. The American government effectively owned Fannie Mae and Freddie Mac, and they were just as caught up in the subprime mortgage craze as other banks.

The state will always act in the interests of capitalism. In this case, the banks were nationalised because it protected the system as a whole.