The consequences of the bail-outs have been profound for the Anglo-Saxon economies. Whilst certain sectors were considered too large to fail, the corporate governance failures have been compounded by political interest and distortion by lobbies such as trade unions.
The banking and automotive industries have been bailed out because they
are judged to be too important to fail. It has been extraordinary how
quickly governments have become, in the wonderful American phrase,
shovel ready. In other words, everyone is now a Keynesian. The
question must be whether these new habits of intervention will stick
after the immediate crisis has receded? Governments don't have the
competence or resources to get involved in the detail of managing
businesses..
They have recreated the failures of yesteryear, the grandest of which is the equivalent of Leyland. Chris Higson, Professor of Accounting at London Business School, gets the money quote:
Indeed, government help may be akin to putting a band-aid on a terminal patient..