I'm struggling to understand why so many supposedly well-informed business and economics commentators are describing the nationalisation of Northern Rock as the right decision, albeit a little late. Well I think it's wrong and an excellent piece by Tim Congdon in the FT provides a timely rejoinder. He draws very uncomfortable comparisons between Northern Rock's compulsory nationalisation and the Yukos saga under President Putin. As Congdon said;
"Western governments have deplored the Russian state’s expropriation of privately owned oil companies. What the British government has done with Northern Rock – by falsely representing a business transaction at market rates or above as “state aid”, encouraging a frenzy of hostile and largely silly press comment, cajoling the management and shareholders, and finally imposing a compulsory nationalisation without compensation – bears comparison with President Vladimir Putin’s devices to steal assets in the former Soviet Union".
I also think it's disturbing how in a supposedly fair-minded, top-ranking liberal democracy, 100,000 shareholders throughout this crisis have been almost universally treated by most of the media and the political class with at best indifference and at worst, contempt. So when Northern Rock is eventually reprivatised, wouldn't it be just for shareholders - not the Treasury - to be first in line for at least some of the receipts?
(And no, I'm not a shareholder)
