Northern Rock
The government have done the right thing by bailing out Northern Rock - the only alternative was to stand aside and watch as the financial markets went into meltdown - but in the process it has destroyed Gordon Brown's hard won reputation for managing the economy - billions of pounds of public money will now be used to subsidise Northern Rock before it is finally sold off- but the real villain is the lack of proper control in the financial services market, which allowed Northern Rock (and possibly others) to borrow so recklessly.
Northern Rock's collapse is the same in essence to that of Farepak - yet Farepak customers will recover only 5p for every £1 lost while government looks the other way - the only difference is one of scale - in one case the government's moral compass isn't working - in the other the politics of the situation demanded action.
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