I’m currently dealing with another one of the horrid fortnightly sneezing and runny nose attacks that have been plagueing me these past several months, so this post likely won’t have quite the polish I wish it should.
I just got done listenning to Peter MacCormack’s latest podcast episode with Freddie New. It’s essential listening for anyone interested in UK government, the UK economy, or anyone thinking of running a business.
Firstly they get into some of the issues that have been affecting the government recently, and specifically the useless front bench of government [12:54]:
PM: I did the research, nobody on the front bench has had any real world experience running a company. That concerned me.
FN: I saw your tweet.
PM: I was talking to Steve Baker, and I said "in government what happens when you talk to politicians about this?" and he said "They don’t understand it". And I said "huh? … what do you mean?" and he was like "they don’t really understand economics and the few that do, their position is always the same, that can be dealt with by the next government".
FN: Not to be too rude about politicians, but I think that if you did understand economics you wouldn’t be a politician, you’d be off working for Goldman Sachs or JP Morgan.
PM: But isn’t this insane? Our country is being run, we are electing people to run our country and make important decisions that affect the lives of all of us, and they have no experience of running a company, the reality of it, and don’t understand economics.
FN: You’re completely right.
PM: So what the fuck are we doing?
It’s a great observation.
When you think about it, a nation state is in many ways a very complicated, ginormous business. How can it be that the people running it have never run any businesses? It’s completely ludicrous. If you said the next CEO of Apple had never run a business, you’d be laughed out of the room, yet somehow when it comes to nation states, people are okay with that. What does this say about nation states?
The rest of their discussion is super interesting, especially the long segment on private equity, special purpose vehicles, and the monstrous practice of extracting value from and imposing debt on acquired companies. I found this entire topic massively shocking and eye opening.
Coincidentally today’s Rest is Money podcast featured Paul Nowak, General Secretary of the Trade Union Congress. I didn’t expect I’d like much he had to say, but actually I found he made a lot of good points, though he’s coming from a completely different angle. They have a lot of noble goals and seems very earnest, but I wonder if he appreciates a lot of the realities on the ground.
One thing Nowak mentioned was that some companies were making enormous amounts of money, and essentially weren’t paying their fair share. Also his view that big foundational improvements to the health of the population are needed to remain competitive long term, make a lot of sense. I actually agreed with a lot of what he was saying.
Which is why I’m so very confused because I also agree with much of the criticism from right leaning commentators. For what it’s worth, I think Nowak would be a great guest on Peter’s show.
Anyway how many businesses are currently in the private equity death grip predicament? Is this the reason the business sector can’t cope with the new tax rises? Are they all weighed down by parasites sucking out their value? Is that why these big companies need to make so much money just to survive?
Listenning to Freddie New’s detailed description of the realities of how companies are structured, and how the money flows, it starts to seem like the entire UK economy is a very sophisticated industrial scale business milking factory. Eventually there just won’t be any way to make any money as a business owner, which leads to the question...
Who milks the milking factory?
Also isn’t this private equity led value extraction essentially just an industrial scale abstraction of chattel slavery?
I feel like we need a better dashboard. How bad is the situation? Is it as bad as Peter and Freddie are saying, or is it more like what Nowak is saying? Or are they all right in some way?
Right, time to rest my sneezing head. #>