Saturday, 7 January 2012
Milliband attacks the economy, again
In a weird article in the Graundiad Mr Milliband lays out his insane agenda. He wants more 'responsible capitalism' what this amounts to seems to be an attack on executive pay.
This is so short-sighted. Already the City itself has done a good job of undermining the public equity markets. IPO's like Ocado last year that are priced to fail and succeed only in making investment bankers and the proprietors rich are limiting the amount of companies coming to market. Huge market volatility is causing smaller AIM companies to delist at a very fast spreed. Volumes are falling - the Equity markets are shrinking.
Add to this a crazy idea about comparing pay and limit pay and wealth creators are going to ask why go public at all? With all the hassle and effort only to have your own pay limited anyway. Instead these companies will stay private where the Government cannot yet touch them. There is plenty of private equity money around today to fund private companies.
But this is terrible for our society. Pensions and Savers - who still outnumber debtors by some way, rely on public companies for their investments and yield. Private companies pay no dividends to retail or institutional investors. So by shrinking the markets we are reducing the potential for our savings to help fund our future and our investments and growth.
I am all for fixing the current mess in our financial system which as we all know is at crisis proportions - but having idiotic, populist, socialist politicians who have never had a job in their lives pontificate and lead the debate is a very sad state of affairs to be in. Let's hope the Coalition roasts them for this nonsense.
Posted by CityUnslicker