The economists’ UK manifesto, seems to be over 90 percent long on government bureaucrats.

Sir I refer to Tim Harford’s “The economists’ manifesto” April 18.

Nick Stern: “green infrastructure bank…congestion charges…carbon tax”.

Jonathan Haskel: “government funding of science” with government borrowing taking advantage of the ultra-low interest rates.

Gemma Tetlow: “abolish national insurance entirely and replace it with higher rates of income tax”

John van Reenen: “an infrastructure bank to help finance projects by borrowing from capital markets and investing alongside private sector banks”

Kate Barker: “replace council tax with a land value tax”…taxing expensive homes more heavily and “charge capital gain’s tax on people’s principal residence”

Simon Wren-Lewis: “the Bank of England should print the money and hand it to the government on condition it be used for fiscal expansion.”

Diane Coyle: To limit executive pay packages.

Though Nick Stern mentions his proposal is “long on UK strengths such as entrepreneurship” I would hold the Economist’s manifesto package seems to be over 90 percent long on government bureaucrats.

My own recommendation, also as an economist, would be to create some lebensraum for UK entrepreneurs and SMEs, by firing current bank regulators.

Why?

Because banks are allowed to hold less equity against assets perceived as safe than against assets perceived as risky.

So banks can leverage more their equity, and the support they receive from society, with assets perceived as safe than with assets perceived as risky.

So banks can earn higher risk adjusted returns on equity with assets perceived as safe than with assets perceived as risky.

So banks will lend too much at too low rates to what is perceived as safe, like infallible sovereigns and members of the AAArisktocracy, and too little at too high relative rates to what is perceived as risky, like SMEs and entrepreneurs.

And so the indisputable fact about current bank regulation is that it distorts all common sense out of the allocation of bank credit to the real economy.

PS. I hear again about ultra-low interests... careful these rates are being subsidized.

@PerKurowski