Mr Cable’s campaign shows another lack of judgement

Mr Cable is being praised by the BBC for his “success” as acting Lib dem Leader. This “success” is to pursue a nasty campaign against the shareholders and management of Northern Rock, in an attempt to politicise a difficult situation and force a nationalisation of the bank. Mr Cable seems to want to wipe out the value of Northern Rock shares, being no friend of either the small or large shareholders of the bank. Rightly asking how the government secures and retrieves the taxpayers’ ??25 billion, he then makes a fool of himself by suggesting taxpayers take on all ??100 billion of the liabilities instead!

I have a few questions for the garrulous Mr Cable:

1. If he is worried about security for the ??25 billion, why does he think taxpayers securing all the ??100 billion of total liabilities which the state would take over if it nationalised the bank would improve the taxpayers’ position?

2. What could the government as owner of the bank, that it cannot do as bank manager to the bank?

3. How much skill would this government show at running a mortgage bank? What skills do they have that the market lacks?

4. Why does he wish to bail out all the creditors of Northern Rock by guaranteeing their position through nationalisation?

5. How would he pay for the nationalisation? I appreciate he thinks he should take over the shares for nothing, but the whole ??100 billion of assets need financing, and all of that borrowing would then fall to the taxpayers’ account.

Mr Cable has shown little understanding of the complexities of a mortgage bank, and no statesmanship. Some of us commenting and asking questions have been very careful not to say or do anything which could make the position worse. When I was warning of the dangers of the UK credit crunch before the run on Northern Rock began I made sure I did not repeat market rumours about Northern and other institutions by name. Mr Cable seems to revel in trying to make things worse. The BBC fails to ask Cable the difficult quesitons about his wish to condemn all involved with Northern Rock, and fails to expose the folly of his nationalisation scheme. Nationalisation would be expensive at a time when the government is already over borrowed and over committed; would delay tackling the real problem of refinancing the Rock in the private sector; and could lead to shareholder actions against the government for failing to recognise the potential value of the Rock’s assets.

If it’s Calamity Clegg, it’s also Calamity Cable.