Why this time Government intervention should work

Five reasons why this time it should work:

• Western govts have been forced into ownership unlike previously where owning commercial enterprises was an integral part of governing philosophy. In the US and UK, govt officials have repeatedly proclaimed that they are reluctant stakeholders and have pledged to manage their stakes in a commercial manner.
• The US and UK govts insist that they will seek to sell their stakes asap. The desire to sell their stakes to private investors at a profit means that the govt must pay close attention to its interventions.
• A limited no. of capital injections, makes its easier for the public to measure the value created or lost and to hold govts accountable for their performance.
• With record budget deficits looming, govts can ill afford to engage in wasteful spending at bailed out firms.
• Retaining a public float enables these firms to maintain their stock exchange listings which carry mandatory reporting requirements that compel govts to explore the impact of their actions on stockholders.

As a first step to success, govts must establish a baseline for evaluating their own performance. Another way in which govts can show their commitment, is by defining an exit timeline and strategy.