Posted on 10/08/2008 5:17:35 AM PDT by oblomov
Now this might seem churlish when the UK bank bailout scheme is being hailed as a bold attempt to backstop the UK financial system, but let's spend a moment thinking about the bigger consequences.
Unlike the US TARP which will relieve the banks of toxic assets on their balance sheets, this UK plan will put the government in the boardroom of every participating bank (figuratively if not literally).
Can anyone tell me now what really separates the banks from the government?
Our liberal, equity-owning democracy has taken a major blow. With this precedent what incentive is there now for me to own another bank share? And if that is the case why should I be prepared as an individual to put my capital at risk recapitalizing the banks when at any point the government is going to help itself to the returns I have gambled on?
The British government is nationalizing the UK banking industry through its ownership of preference shares. The scheme now puts the government alongside bond holders ahead of the equity owner in taking their slice of bank profits. Gordon Brown will be feted by the left in this country as the Prime Minister who has rolled back two decades of Thatcher-led equity ownership.
Let's talk about responsibility.
(Excerpt) Read more at cnbc.com ...
The title should read, “Socialists 3, Capitalists 0” and the author should be Geoff Cutmore. Could you please correct this ?
The Ten Planks of the Communist Manifesto
5. Centralization of credit in the hands of the State, by means of a national bank with state capital and an exclusive monopoly.
They have no choice. Iceland, Ireland, Greece and Germany have already started down this road and are backing 100% of all deposits in all banks in those countries.
The UK has to do something this drastic to keep capital from leaving the country rapidly.
I don’t see how the government buying a bank’s worthless assets is better than the government offering money in exchange for bank shares, especially as the latter gives greater disincentive for shareholders to take the government’s money.
“But we need every RINO we can get!”
As some here would say.
Well I personally am very pleased and proud to own (via being a UK taxpayer) large slices of several banks. Whereas before, being private enterprises, they kept me in the dark about their activities, as a taxpayer I can now sit in on their board meetings and ethically influence their strategic business decisions. Under the wise and benevolent leadership of Comrade “flash” Gordon Brown and his rapidly greying Chancellor, Alistair Darling (a distant relative of the Blackadder character) mortgages will now be easier to obtain, loans will be on better rates, everyone will get a larger slice of the cake, and the cake never runs out!
Do I really need a /sarc tag?
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