If it is looked at coolly and rationally the proposal to put £50 billion of taxpayers money into shares in banks, that is almost £1,000 for every man, woman and child in the country, would be judged as economic madness. The financial institutions participating have proved their monumental incompetence - that is why they are collapsing. Having proved their complete incompetence, that is their inability to take the right decisions, the proposal is that... they should therefore be given more money to take decisions about. In this case decisions about our money.
Imagine if someone had ruined a corner shop and then someone made the proposal that you should put your money into it. You would merely laugh and turn down the proposal. Yet this is exactly what is being proposed in this case. It is proposed that £1,000 should be given from every person in the country to people who have proved they cannot handle money properly.
No taxpayers risk should be taken. If private banks can recapitalise themselves with privately raised money fine. If not, the government should stand willing to guarantee deposits, and as with Northern Rock and Bradford and Bingley, it should make clear it will take over the running of banks and ensure lending to viable companies. Shareholders will lose their money and depositors will be proected. The government should not be investing in the capital of private banks and exposing huge quantities of taxpayers money to risk.