George Osborne inherited a state-owned bank we don’t really
want. What we do want is more dosh to spend on the ruinous welfare state, so
beloved of those who don’t have to pay for it. So, he sells shares to recover
some of the capital spent by the last government some years ago to shore up
said bank against failure and now he’s the arch baddy ‘selling assets to his
mates’. But nobody agrees RBS is an asset, most people understand that the
state can’t really run financial institutions effectively and everybody knows
we’re strapped for cash... and he’d still be the arch baddy if all the poor ate
from gold plates while the rich had diamond knives and forks.
Most people in private enterprise know well the
perilously narrow and rocky channel to navigate between profit and loss, cash
flow and capital investment and the balance between staying in business and
losing the lot, but it seems everybody (apart from many economics commentators)
knows better what he should do. On left and right there is condemnation and disappointment
that he is ‘throwing away’ £1billion, but really the loss was made on taking
RBS into state ownership when the government of the day poured billions of
tax-dosh into the business. They had little choice, other than to let the bank
fail, but this makes them no less complicit in the current ‘loss’.
It was a gamble – ‘investing’ always is – RBS may have
gone on to fail completely and the loss would have been total but instead it
has survived and now the present government wants to recover at least some of
what was spent. Think of it as like cashing in Premium Bonds which you bought
thirty years ago and are worth far less now than if you’d left the money in a
deposit account but might, yet, win a big prize... except the car really needs
fixing today. Or imagine that – heaven forfend – you bought shares in Chinese
solar panels at the top of the market and you are getting out before your holding loses any more value. It’s not what you wanted, but it’s what you’ve got,
so...
Think like many who overstretched themselves in the cheap
mortgage years and bought a crumbling pile with dodgy foundations in the
northeast in the belief that property prices could only ever go up and you could
easily re-finance to cover the cost of repairs. Only now, the roof is close to
collapse, the windows are rotten and the east wing is parting company with the Italianate
portico. And you are fearful of losing your job. You’d say no to the property developer
offering to take it off our hands for less than you originally paid? (And the
offer will go down every day you prevaricate.)
It's a project... just needs a bit of paint.
I’m not really defending Osborne. I’m not saying he’s any kind
of genius. Neither am I mistakenly attributing our relative economic success to
his policies and his alone. I’m not at all sure I'd even like the bloke if I ever met him, but I do
know that I don’t know a better alternative. (I’m not saying there isn’t one, I’m
admitting I don’t know of one.) But what I am saying is, it’s a bit rich that
the voices on the left are berating capitalism for not making a profit on an 'investment' socialism made in a failing enterprise they knew little about. Those
in glass houses...
Xenophobe.
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