The UK government’s nationalisation of Northern Rock has brought forth a predictable ‘back to the seventies’ chorus of disapproval from opposition politicians and the press.

In British political debate, the 1970s has been demonised as an economic dark age; a time of power cuts, striking unions toppling the government, runaway inflation and extremely shoddy cars made by British Leyland, the nationalised car-maker.

Certainly, the largely right of the centre British press is never slow to portray the period as a time when Britain slid into the mire until Mrs Thatcher came to the rescue in 1979.

But politically and economically, such comparisons may not be particularly helpful or accurate.

In political terms, many voters are too young to remember the 1970s, so trying to bring up nationalisation as an unwelcome ghost from the past is unlikely to work.

In any case, the 1970s is now far enough away to be the object of warm and fuzzy nostalgia for flared trousers, strange hairstyles and cheesy pop music.

Economically, what is happening now is very different to the 1970s.

Northern Rock was hit by the sub-prime lending crisis which originated in the US, a result of too much easy credit and overly complex financial products.

The effects of this are rippling outwards and may well claim other victims over the next year or two.

Perhaps rising oil prices and difficulties in the Middle East are more accurate reminders of the 1970s than a stricken mortgage and savings institution.

The government does look vulnerable for the failings of the regulatory system to act sooner in tackling Northern Rock.

The Prime Minister, Gordon Brown, was, as chancellor, involved in setting up the tripartite arrangements between the Treasury, the Bank of England and the Financial Services Authority (FSA).

Northern Rock slipped through this regulatory triangle, so Brown has a measure of responsibility here.

The government was also slow to act when its problems first became known, so it missed the chance of getting a trade buyer lined up for Northern Rock.

Once investors queued to withdraw their savings, the bank faced a terminal loss of confidence, scaring away all but the hedge funds and Richard Branson.

And nationalisation is arguably preferable to allowing a private buyer to get the mortgage book, which is largely sound, on the cheap.

What is more concerning is what the crisis revealed about the banking system.

Credit is now drying up and many experts believe a US recession is inevitable and probably in the UK too. Although some avoided the credit crisis by good judgement, it appears that many major banks and other institutions blithely walked into it, not realising the true nature of the huge investments they had made.

As a result, there will be extensive collateral damage.

Pension funds, already seeing rising mortality estimates inflate their liabilities, now face tricky fault lines in equity and bond markets and retail investors appear to be rapidly losing confidence in stock market investing.

Accounting for all of this and any further failed banks, yet to emerge, will take time as the losses mount up.

All in all, Northern Rock looks to be a symbol of the complex, opaque and unstable financial system of the noughties, rather than a throwback to the decade that style forgot.