When Henry Paulson, the U.S. Treasury secretary, announced his plan for a $700 billion financial bailout, he opted for government purchases of toxic mortgage-backed securities. This is because of the Republican philosophy of minimum government intervention.
When Gordon Brown, the British Prime Minister outlined a bold plan where four major British Banks were effectively put under government control with planned capital investments by the government, he is true to his Labour Party’s ideology of nationalization.
While neither nationalization nor privatization is always right, beliefs may cloud one’s vision and caused the obvious solution to be rejected.
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