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Sunday, July 12, 2009

Wallies of the Week: Boris Johnson and Daniel Hannan

Boris Johnson is a worried man. He thinks that new planned EU regulations on hedge funds and other vulture capitalists will be a disaster for Britain.

Daniel Hannan, the Tory MEP who went on Fox TV in America to attack the NHS as a sixty year 'mistake', agrees:

The City is staring into the abyss. If the proposed EU directive on hedge funds goes through, London will go the way of Bruges, Venice and Amsterdam: a once dominant financial entrepĂ´t sidelined by more virile cities.

What a load of Castor and Pollux.

Johnson and Hannan and other fanatical neoliberals would like us to believe that without vulture capitalists, London, and indeed the rest of Britain, would hit the buffers.

How is it then that during the period when Britain and Europe experienced their fastest growth in living standards- the thirty years following World War Two- capitalism was strictly regulated and hedge funds and other vulture capitalist vehicles did not exist?

The truth is that we survived perfectly well without hedge funds, 'private equity' companies and venture capitalists in the 50s, 60s, and 70s and we'd survive perfectly well without them again.

For a corrective to the neoliberal nonsense of Johnson and Hannan, there's a great article in today's Observer by Will Hutton on the sort of institutions the Mayor of London should be celebrating- eg The London School of Hygiene and Tropical Medicine, and the institutions he shouldn't.

I am sick of hedge funds. Sick of their special pleading that they should not suffer the regulation proposed by Brussels and will flee the country, supposedly taking billions in tax revenue with them. Sick of politicians - Johnson on the right and Paul Myners on the left - feeling that they have to speak up for them as an allegedly key part of our financial service industry, so hitting back at the delusions of mainland Europeans that hedge funds represent all that is bad about Anglo-Saxon capitalism.

... hedge funds do represent the unlovely priorities of Anglo-Saxon capitalism. They were an important factor behind today's financial crisis. Brutally, it would matter scarcely a jot if the hedge-fund industry shrank to the size it was a decade ago. It might even promote a less casino-oriented financial system


Anonymous said...

Only Wally of the week? Surely Boris is wally of the decade for all the crap he comes out with.

Gregor said...

Well said Neil. I disagree with you on several issues, but here I agree. Followed the link and saw this quote from Boris:

"It's a weird thing that in the fog of confusion and war the commission is proceeding to attack something in which London simply excels and was not responsible for recent catastrophe."

Notice that neo-cons are always fond of applying warlike metaphors to everything? They seem to have very deluded ideas of themselves.

However, I wonder if this changes your views on the EU? There are many negative features about the EU but Britain seems to be turning into a closed society where practically all journalists and most politicians are devoted to a narrow spectrum of neo-liberal thought.

Charlie Marks said...

God forbid the financial geniuses of the City were to leave - not when the economy's going so well(!)

On the EU, this is the kind of decision that should be taken at a level closer to the people - that's the problem, Gregor.

neil craig said...

"the fastest growth in living standards in British- and European history- in the thirty years following World War Two"

Well basicly because technology was progressing & state interference was still not as destructive as today. his can be proven by the fact that the fastest in everybody's history was occuring then.

Since then, of course, we have seen every possible new industry & most of the old ones destroyed by government regulation which i9s why financial services are so much larger a part of what remains of our economy.

Incidentally Hannan said, on his own blog, that Boris was entirely right.

May I ask once the socialists have closed down this industry as well how do they expect the country to pay for things?

Anonymous said...

Neil Craig:

"Well basicly because technology was progressing & state interference was still not as destructive as today. his can be proven by the fact that the fastest in everybody's history was occuring then."


On second thoughts, don't bother answering ...

- questionnaire

Charlie Marks said...

My grandmother left school at 12 and went to work in a factory. When she got sick, there was no money to see a doctor.

Her children were able to go to university and to see a doctor when needed.

Don't tell me that these improvements weren't the result of working people pressuring the government to help them...

Neil (not Clark) said...

I'd have thought good right-wingers like BoJo and DanHann would know the golden rule: "Don't negotiate with hostage-takers."

DBC Reed said...

You suggest that private equity was not around in 1950's Britain but its greatest exponent, Charles Clore , developed all the main techniques in the UK shoe industry during the 50's and 60's : the predatory takeover of family firms gone public;the sale and lease back of assets raising huge sums for re-investment and a further cyle of similar investment.As Answers com said "The reason Clore wanted Sears "( a big shoe manufacturer)" had more to do with shops than shoes" because every large shoe manufacturer also had dedicated chains of shoeshops on every High Street.Very soon Clore had amassed 2,000 High Street premises.These were sold recouping his outlay in taking the firms over but he did lease them back and make some sort of shot at running them though with ever greater proportions of imported stock.
The real asset strippers came in the mid 70's when Slater Walker became synonymous with it,Walker being a rising Tory star.Ticking-over firms were acquired and all pretence of producing anything and employing people was relinquished in favour of selling off the assets; mainly property.
The way the economy has been run since continues to make it more profitable (and easier) to take no risks with providing goods and services and to passively invest money in landed property.