A few years ago I wrote a post about the Guardian journalist Aditya Chakrabortty. Entitled - imaginatively - Valuing Aditya Chakrabortty, it explained how the paper's chief economics leader writer had misunderstood the nature of value in the context of the Government's sale of its stake in Northern Rock, the failed building society.
For people like me there is not much hope that the powerful will read what we write, but a couple of weeks later Chakrabortty did return to the subject with a snarky reference to nitpickers, so I like to think that at the very least he does Google his own name from time to time.
Now this may seem like using a sledgehammer to crack a nut, but it's worth repeating these arguments every now and again, and this time the culprit is the bouffant Left wing comedian Chris Addison.
Actually comedian may not be the right word for Addison, because I don't know if he is actually funny in person. He appears on game shows I don't watch and I know who he is only because of his acting role as a hapless special adviser in The Thick of It, a programme which is funny but rests on the premise that all politicians are venal and stupid, the implied subtext being that if its Left wing actors and writers went into politics they'd be much cleverer and more sensible.
If they could be bothered.
So what has Addison done to get my goat? He has repeated what I like to call the Chakrabortty Fallacy. You may have noticed that the Government is proposing to sell off part of its stake in Royal Bank of Scotland, the bank that had to be rescued in 2008 by a £37 billion injection of UK taxpayers money. At the time the shares were trading at about £5 each. They're now trading at £3.50.
Enter Chris Addison. Yesterday he Tweeted "If George has a share worth £5 and George sells that share for £3.50, explain why George is Chancellor of The Exchequer. Show working".
I'm sure you get the picture. Why is stupid George Osborne proposing to sell some of Britain's RBS shares for less than they're worth, losing the taxpayers billions in the process?
But Addison, like Chakrabortty, doesn't understand what value is. Something is worth what someone else is prepared to pay for it in an open market. But firstly Addison is failing to look at the upstream end of the equation. Yes, RBS shares were trading at about £5 in 2008. But the bank was essentially bust, and if the then Labour government had waited for this to make itself manifest in the hope of paying less, RBS might have crashed, with knock on effects in the British and global banking systems which don't bear thinking about. At the time RBS was one of the biggest banks in the world.
The figure of £5 per share didn't represent an ordinary open market price then. If the markets had known RBS's true situation the shares would have been worth much less. In fact in the following January the shares were trading at 10p each, a fall of some 97%. And that was after HMG had bailed it out.
So the Government paid a price which didn't represent ordinary open market value - it paid a price which represented, as with Northern Rock, the cost of preventing the British banking system from collapse, and the buyer was no ordinary one but perhaps the only party with both the means and the urgent will to stop that happening.
Moreover George Osborne does not, contra Addison, own shares "worth £5". He never has. As I've explained, the shares weren't even worth £5 then, at least not to the ordinary buyer. So in what way are they worth £5 now?
Actually Addison is too stupid to realise he has answered his own question. We know what the shares are worth. They're worth £3.50 because that's what people are willing to pay for them in an open market today. A journey, incidentally, upwards from 10p that looks nothing short of a minor miracle.
If Addison weren't so set on joining the general Leftist condemnation of George Osborne (who continues, annoyingly, to be a capable and cunning Chancellor), he might have put a more thoughtful and pertinent question.
"If HMG bought a share for £5, why is it now selling it for £3.50?".
This is the kind of question which every unsuccessful stock market punter has had to face from time to time. The best answer I can give is that the money has already gone, and the only way of getting it back is to gamble that the share price will recover in time and we will end up making some money. But this would be a gamble because we don't know how RBS will do in the years to come. No-one does.
And in the meantime the UK is borrowing nearly £2 billion every week just to stay afloat, and is paying billions in interest on its borrowing every year. In that context cashing in some assets to lower the deficit is a perfectly defensible strategy. It may turn out to be wrong in the long term, but no-one knows that, least of all Chris Addison. Making these sorts of decisions is precisely the kind of thing we elect politicians to do. Does anyone really think Osborne would have ordered the sales now in order to make less money than he could later?
What depths of plonkerdom has Chris Addison plumbed. His Tweet invites followers to share his disdain for the Chancellor and laugh at Mr Osborne's stupidity. To date about 5,000 people have favourited or R/Td it. Oh how they must have laughed! And yet it turns out that, despite his lofty tittering, it's actually Addison, failing to understand one of the most basic priniciples of economics, who's made an idiot of himself.
