Realist, not conformist analysis of the latest financial, business and political news

The Coronavirus Solution – Nationalise 25.1% Of The Private Economy

A Richard Murphy

This would actually be a fairly cute manner of enforcing political control of the private sector economy if it was actually meant as written. However, given that it comes from the pen of the Sage of Ely it isn’t meant as written.

If it were Owen Jones saying this I’d be shouting at the evil in adopting a crisis to bring about the socialist state. As it’s the Senior Lecturer it’s just that he’s not thinking.

The suggestion:

To enforce these conditions it may be reasonable to require that every single company taking advantage of these tax holidays should by legal automatic obligation be deemed to have issued 25.1% of its share capital to the government in exchange for the package that guarantee its survival, which proportion guarantees the government the right to block many shareholder actions in these companies. An automatic right to appoint a majority of the board of directors in the event that the conditions of the bail out, as noted, are not met should also be implicit in the tax holiday terms. You can be sure that those wanting to simply take a tax holiday to exploit the situation would be more than deterred by these conditions, but those desperate for the survival of their companies would not be. That is precisely why these proposals are fair whilst there can be no corporate exploitation of them right now.

Well, fair enough, you take the shilling you’re signed up, aren’t you? It’s just that this is also proposed:

It is for precisely this reason that I am arguing that companies should enjoy tax holidays. And precisely because we do not have the time to check which company should, or should not have tax holidays, they all should.

You don’t gain a choice on taking the shilling or not. Eh Voila! Government now owns 25.1% of the entire private sector.

But then Richard Murphy never does read his own proposals, does he?

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TD
TD
1 year ago

Who exactly is this Murphy dude and why does Tim pay him so much attention?

Spike
Spike
1 year ago

It’s worse, apparently the brilliant Larry Kudlow is also suggesting that, in exchange for a cash infusion to “fairly” compensate selected industries for damage caused by halting the entire US economy, the US government acquire an equity interest. Him and Liz Warren and Bernie Sanders. Politics doesn’t just make strange bedfellows, it sucks out brains.

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