Hedge fund control of Co-op Bank & Royal Mail should never be allowed to happen

RM Coop bank logosOn Tuesday two US hedge funds took control of the Co-operative Bank and in effect ended its 170-year history as Britain’s largest mutual. Yesterday an aggressive hedge fund, deceptively entitled The Children’s Investment (TCI) Fund, acquired the largest stake behind the government in the Royal Mail. It is led by a man known for his anti-state streak in dismantling public provision which gained him and his fund the title of ‘locusts’ in Germany.

The obvious and immediate question to be asked is, whilst these are the normal machinations of unrestrained market capitalism, do these enforced takeovers serve the public interest or simply their own interests in extracting the largest possible short-term gains, irrespective of the consequences for the wider community? If the latter, as is obviously the case, then the non-bank financial sector of which hedge funds and private equity are prime examples, require radical reform. Continue reading

Four economic boosts when all we’re offered is “responsible capitalism”

On Thursday, I wrote about how in the wake of Osborne’s latest budget, Labour continues to buy into the incompetent neoliberal myths that the government uses to justify their programme of austerity. If only the problems stopped there!

Sometimes, when it looks like the left is offering an alternative, it can still fall into the neoliberal trap. Take the so-called ‘responsible capitalism’, as Duncan Weldon, the TUC’s Senior Policy Officer endorses in his recent article calling for supply side reforms.

I have some sympathy for Weldon’s argument – we’re both from the North East, after all! He raises important points – but his article is largely an opaque endorsement of supply-side economics and ‘The right kind of growth’, with some quite glib justifications in the name of Attlee and Wilson.

Continue reading