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Not fit for office?
It is widely known that international speculators make (or lose) money gambling on currency value movements. George Soros most famously made a killing on Black Wednesday (September 16th 1992), when Norman Lamont, the then Chancellor of the Exchequer, was forced to withdraw the pound from the European Exchange Rate Mechanism. It is estimated that Soros made $1bn selling short (or betting against the pound). Since then ‘disaster capitalism’ has expanded even more and has been recognised for what it often is, gambling on other people’s misfortunes. Such is the nature of the global financial system, it is not proscribed, indeed, it is encouraged. Incidentally, one of the earliest advocates of making money in this way was one William Rees-Mogg, father of Jacob, in his book Blood in the Streets: Investment Profits in a World Gone Mad (Summit Books, 1987).
Hedge fund managers now regularly place wagers on events, not just currency fluctuations, including corporate events (the healthcare sector, specifically pharmaceuticals, is very lucrative, apparently) and by taking global macro positions – essentially, betting on national economies and currencies. Almost 80% of all Europe’s hedge funds are based in London, where legislation is light touch, although currently subject to the EU’s Alternative Investment Fund Management Directive. ( I discovered all this recently by researching hedge funds and how they work because the villain in my new thriller is a hedge fund manager).
Why, any sane person would ask, is this all allowed? The neo-liberal orthodoxy that individual liberty is paramount was always just an excuse for some, usually rich and privileged, individuals to exploit others who were less so by acquiring wealth at their expense. It’s time for a sea-change in what is acceptable.
In the UK there has already been speculation about Nigel Farage and some of what, in horse racing parlance, would be called his ‘connections’ ( see Criminal Proceedings ) Most especially his remark, just hours before polls closed in the Referendum in June 2016, that he believed that the Leave campaign had lost. This was followed by an increase in the value of the pound, which, when the actual result came in, plummeted. There was significant activity in the City short selling the pound and much money was made. Was Nigel helping out his pals in the City by maximising their return? ( He is certainly very close to some gamblers and some bookmakers, see Bloomberg’s report here ) Farage denies this.
Similarly how can we allow individual hedge fund managers and partners to occupy positions of power from which they can manipulate the markets, either positively or negatively, in which they are investing? Just fomenting uncertainty impacts directly on markets, indeed ‘uncertainty’ as compared to ‘certainty’ is one aspect of financial economics. And this, of course, includes legislators, like Jacob Rees-Mogg. So I propose that all professional investment managers ( of hedge or other funds ) are, in future, excluded from being Members of Parliament. Come on Labour, or the Lib Dems.
Rees-Mogg has already been reported to the standards committee of the House when he failed to declare financial interests, via Somerset Management, in tobacco, mining, oil and gas yet spoke in debates in the House against Green Energy and plain packaging for cigarettes ( see If Mrs Merton did tax and Brexit ). Yet transparency on its own is insufficient. We need a major overhaul of what constitutes fitness to be an MP and hold office.
Talking of which, the crowd funded civic case against Boris Johnson appears to have stalled. There are, however, civil suits underway from those private investors in the Garden Bridge, one of Johnson’s vanity projects when he was Mayor of London, who have not received their money back. The project seems never to have met public procurement standards and was shelved by the incoming Sadiq Khan at a cost of millions to the taxpayer. An old-fashioned auditor is required here ( remember Shirley Porter* ).
For more on the scandal that is Brexit see It’s all about the money Unravelling fortunes….. For think tank read lobby group… Criminal Proceedings
*Erstwhile Mayor of Westminster who was, after years, found guilty of gerrymandering ‘homes for votes’, thanks to a very persistent auditor.
Posted on 22nd December 2018 by juliej Leave a commentThis entry was posted in Political comment and tagged Political comment. Bookmark the permalink.