Bank Bailouts - Second Thoughts on British Plan?

I know some touted the British plan as better than our plan (Paul Krugman: Moment of Truth ) , now The Sunday Herald reports on criticism of this plan. I know this probably far beyond my pay grade but it does ring true as common sense.

The evidence so far suggests that the package has done nothing of the sort. Some are even suggesting that the government has been extremely foolish to throw good money after bad. Experienced voices are warning that, far from persuading banks to behave more responsibly, prime minister Gordon Brown's extraordinary package of bail-out measures could end up having exactly the opposite effect.

"The partial nationalisations in the UK are associated with claims by politicians that there will be more lending to fund small businesses and home ownership for poor households," said Gilles Saint-Paul, professor of economics at the University of Toulouse. "This is clearly allocating credit on the basis of a political agenda, and is doing nothing to prevent a subprime crisis in the future."

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Before the markets had opened last Wednesday, Brown and his chancellor Alistair Darling unveiled an ambitious package of measures designed to shore up Britain's troubled banks, which is likely to include the part-nationalisation of several of them.

The swaggering proponents of no-holds-barred free-market capitalism, financially crippled through a mixture of their own incompetence, greed and recklessness coupled with external factors such as a near total absence of wholesale funding, have been put into a state-funded intensive care ward.

As the detailed workings of the government's life-support system were talked through by Brown and Darling, the banks were also hit with a second bonanza of a 0.5% cut in UK interest rates, a loosening that was simultaneously matched by many other central banks around the world.