It'd be easy to dismiss George Osborne's "Sid The Banks" announcement as just another plucked-from-thin-air policy from a Shadow Chancellor swimming further and further out of his depth. And while those things are true and the blogosphere has done its usual excellent job of exposing the idea's flaws, we should reflect that it's not the first Tory policy announcement this month that suggests they may be embarking on their Greatest Hits tour.
After all, from our position of 20/20 hindsight, it's easy to say that another public share offer won't produce a share-owning democracy because those in the 1980's didn't (emphasising of course that failing to recognise that people buying purposely undervalued assets will be offered and take a quick profit from institutional investors who are willing to pay something approaching the true value of those assets is just the sort of economic illiteracy we've come to expect from Georgie...)
But did you need 20/20 hindsight? Sid may be the exemplar of the big Thatcherite privatisations, but that was December 1986; BT had already gone in December 1984 and the electricity companies would not be sold for another five years. Is it credible to think that the Tories didn't know how those later privatisations would work out? Or is it more likely that they knew but didn't care?
What worries me, however, is that not every Tory privatisation was a Sid job. The rail franchises certainly weren't and neither were their oft-forgotten predecessor, the bus companies. In both cases, many of the resulting companies were management buy-outs later absorbed into bigger concerns. Gee, do you think the Tories might propose something akin to management buy-outs in other areas of the public sector so that big companies can once again snap them up later on so it's not so controversial as direct privatisation while providing a juicy dividend to the workers involved?
Okay, the Tories might have had a Damascene conversion to co-operativism, but then I might be signed to play power forward for the Los Angeles Clippers. It seems rather more likely that as the individual elements of the grand Tory scheme emerge, we'll find that many of them are similarly designed, to disguise the real intentions. And hey, if you were proposing some of the things the Tories were, wouldn't you be ashamed of them too?
Conventional economics and crashes
2 hours ago