I despair sometimes at the stupidity of our politicians. More and more it becomes obvious that the less they have to do with running the economy, the better. The latest stupidity is from Clegg: Clegg calls for RBS and Lloyds giveaway. The idea is that when the government sells its (i.e., our) stakes in RBS and Lloyds that it (i.e., we) were forced (i.e. decided) to acquire, then there should be some kind of bizarre complex free-share giveaway scheme, the biggest experiment in “shareholder democracy” since the Thatcher era of the 1980 as they put it.
There are some obvious problems with this, minor ones like we wouldn’t, each, get very many shares, most people would immeadiately re-sell them, and the biggest gainers would be the dealers who would reap a fortune in dealing costs.
But more importantly: the money to buy these shares didn’t come from us, individually. It came, collectively, from the treasury. So it should go back to the treasury: i.e., back to us, collectively. Hopefully making enough to pay off the original costs, and if there is any spare, then paying down the national debt would be an excellent idea. Also, the original costs were not borne at a flat rate but at whatever relative rate people contributed to the treasury. So if people were given a flat-rate allocation in return, that would also be wrong.
The entire plan is gross stupidity. As the FT says, it “looks to revive his battered image”.
* Nick Clegg has lost the plot – will he ever re-locate it? – the ever-reliable Torygraph
* Thoughts on Clegg’s proposals to give away bank shares – FT blog isn’t convinced either