Telegraph Writer Calls for Middle Class Revolution

[Tamas]

Seriously though, this guy is largely right. Some PE guys even boast about that over a glass of whisky. What's funny is poor sods like Tamas, who have no idea, and yet will defend it.

Haha. The common misinformation. Classical liberals are NOT on the side of reckless big business. YOU are, and everyone else calling for strong state regulations on businesses, since those help keeping the status quo, and giving the tools to save these assholes from the consequences of their actions.

Minimal regulations and welfare are, well, should be, on the flag of the middle class.

Regulation helps conserve the business and political aristocracy, and helps "communising" risks while keeping private profits. And welfare is effectively taking the money needed to pacify the poor screwed up by this system from the middle class, not only ensuring status quo, but also defending the rich from any kind of challenge.

[Richard Hakluyt]

Vaux beer was crap btw.

[Capetan Mihali]

I have this theory that the UK financial elite first created the "light" and flexible service-based economy, with an unemployed (and, eventually, unemployable) lower class living off the dole - and then broke that social contract by cutting down the welfare when the collapse (which it largely engineered) came. For this it should be decimated, but so far the revolution did not come.

I don't think the UK financial elite are so coherent of a group to pull of something (or really anything) so nefarious.

Historical forces can exist without being conspiracies.

[Tamas]

?

I think if that in part reflects the post-war bargain/settlement, then there's a certain amount of mutual respect between those roles/classes.

Now re-examine the same jobs/social positions in todays Britain and what might you find in terms of wages/advantages/security ?

I suspect John Cleese's merchant banker wouldn't have earn more than 10 or 20 times what the manual worker got; what's the ration now between someone managing a hedge fund and a minimum wage zero hour contract casual worker ?

I have this theory that the UK financial elite first created the "light" and flexible service-based economy, with an unemployed (and, eventually, unemployable) lower class living off the dole - and then broke that social contract by cutting down the welfare when the collapse (which it largely engineered) came. For this it should be decimated, but so far the revolution did not come.

You are one heck of a guy to call for a communist revolution. Project your bourgeois guilt elsewhere please.

[Viking]

I want to know who was stupid enough to lend money to a company leveraging it more than 100% for the purpose of paying dividends? How did these lenders expect to get their money back?

[Capetan Mihali]

And as usual, Mark E. Smith was 20 years ahead of his time.

[Admiral Yi]

I want to know who was stupid enough to lend money to a company leveraging it more than 100% for the purpose of paying dividends? How did these lenders expect to get their money back?

This is the question I asked Joan long ago when the exact same story was raised to spike Romney's presidential bid.

Presumably junk investors are just getting straight up grifted.

[Martinus]

I want to know who was stupid enough to lend money to a company leveraging it more than 100% for the purpose of paying dividends? How did these lenders expect to get their money back?

Most likely the lenders were secured with some additional collateral so probably got their money back.

[Martinus]

I want to know who was stupid enough to lend money to a company leveraging it more than 100% for the purpose of paying dividends? How did these lenders expect to get their money back?

This is the question I asked Joan long ago when the exact same story was raised to spike Romney's presidential bid.

Presumably junk investors are just getting straight up grifted.

That could be a bit of both. Junk investors could have just been offered bonds for example and get shafted on that. Everybody else got security which they used to get their money back. Notice that the article does say the PE fund made 20 mil profit while it paid out 200 mil dividend so it's not like all of it went out to the fund's pocket.

I presume this could have also been a so-called leveraged buy-out - in the most predatory version (not all LBO are like this) you borrow money to buy a company, then drop down the debt (eg by merging the spv you used to buy the company into the company), liquidate the company's assets, lay off people, use the proceeds to pay off the debt and take what is left.

[Martinus]

Seriously though, this guy is largely right. Some PE guys even boast about that over a glass of whisky. What's funny is poor sods like Tamas, who have no idea, and yet will defend it.

Haha. The common misinformation. Classical liberals are NOT on the side of reckless big business. YOU are, and everyone else calling for strong state regulations on businesses, since those help keeping the status quo, and giving the tools to save these assholes from the consequences of their actions.

Minimal regulations and welfare are, well, should be, on the flag of the middle class.

Regulation helps conserve the business and political aristocracy, and helps "communising" risks while keeping private profits. And welfare is effectively taking the money needed to pacify the poor screwed up by this system from the middle class, not only ensuring status quo, but also defending the rich from any kind of challenge.

I am not sure why you are talking about "big business" and "business regulations" in the context of PE. Could you elaborate? These things are hardly related in my opinion. 

Also, I am not aware of middle class PE - this is solely a domain of the super rich.

[Monoriu]

So every time somebody at a company does something against shareholder or public interest, the solution is for the middle class to go to the streets? 

[Razgovory]

Seriously though, this guy is largely right. Some PE guys even boast about that over a glass of whisky. What's funny is poor sods like Tamas, who have no idea, and yet will defend it.

Haha. The common misinformation. Classical liberals are NOT on the side of reckless big business. YOU are, and everyone else calling for strong state regulations on businesses, since those help keeping the status quo, and giving the tools to save these assholes from the consequences of their actions.

Minimal regulations and welfare are, well, should be, on the flag of the middle class.

Regulation helps conserve the business and political aristocracy, and helps "communising" risks while keeping private profits. And welfare is effectively taking the money needed to pacify the poor screwed up by this system from the middle class, not only ensuring status quo, but also defending the rich from any kind of challenge.

You have to understand Tamas, a lot of countries who industrialized early tried what you say.  Turns out, big business ran roughshod over people, hired thugs and murdered people, created enormous trusts which insulated the rich from any sort of challenge, etc.  The poor were "Pacified" by the Pinkertons, the coal and iron police, and various other murderers for hire.  Politics were rigged by political machines, if people don't have enough food, it's pretty easy to buy their votes.  Welfare and regulation put and end to that.

[Tamas]

Seriously though, this guy is largely right. Some PE guys even boast about that over a glass of whisky. What's funny is poor sods like Tamas, who have no idea, and yet will defend it.

Haha. The common misinformation. Classical liberals are NOT on the side of reckless big business. YOU are, and everyone else calling for strong state regulations on businesses, since those help keeping the status quo, and giving the tools to save these assholes from the consequences of their actions.

Minimal regulations and welfare are, well, should be, on the flag of the middle class.

Regulation helps conserve the business and political aristocracy, and helps "communising" risks while keeping private profits. And welfare is effectively taking the money needed to pacify the poor screwed up by this system from the middle class, not only ensuring status quo, but also defending the rich from any kind of challenge.

You have to understand Tamas, a lot of countries who industrialized early tried what you say.  Turns out, big business ran roughshod over people, hired thugs and murdered people, created enormous trusts which insulated the rich from any sort of challenge, etc.  The poor were "Pacified" by the Pinkertons, the coal and iron police, and various other murderers for hire.  Politics were rigged by political machines, if people don't have enough food, it's pretty easy to buy their votes.  Welfare and regulation put and end to that.

Yeah. It is impossible to prevent violence unless the state can have a major influence on the economy. Makes sense.

[Martinus]

I think regulation of big business and regulation of financial markets are completely different things and completely different debates.

The argument for regulation of big business is based on the inequality of actors (big business on one hand vs. a consumer or an employee on the other), and the argument that the state should empower the latter to level the playing field. There are legitimate arguments for it and against it (e.g. that in fact there is no reason to empower the weaker actor, as he or she is still able to make sovereign decisions) - and also possibility to reach middle ground (e.g. by empowering the weaker actor only if the stronger actor passes a certain threshold of power, e.g. is dominant in the market and there is no alternative for the weaker actor).

This is however completely different from regulation of financial markets (banks, PE, hedge funds etc.), where you have independent professional actors (whose interests, even if not always aligned, are also not usually contradictory) entering with each other into transactions that have the capacity of benefiting them immensely while wreaking great havoc on the state of the market and the society as a whole (with the latter not having any say in such transactions). The argument for regulation here is much stronger because without it there is absolutely no countervailing force to curtail such behaviour.

[Razgovory]

Seriously though, this guy is largely right. Some PE guys even boast about that over a glass of whisky. What's funny is poor sods like Tamas, who have no idea, and yet will defend it.

Haha. The common misinformation. Classical liberals are NOT on the side of reckless big business. YOU are, and everyone else calling for strong state regulations on businesses, since those help keeping the status quo, and giving the tools to save these assholes from the consequences of their actions.

Minimal regulations and welfare are, well, should be, on the flag of the middle class.

Regulation helps conserve the business and political aristocracy, and helps "communising" risks while keeping private profits. And welfare is effectively taking the money needed to pacify the poor screwed up by this system from the middle class, not only ensuring status quo, but also defending the rich from any kind of challenge.

You have to understand Tamas, a lot of countries who industrialized early tried what you say.  Turns out, big business ran roughshod over people, hired thugs and murdered people, created enormous trusts which insulated the rich from any sort of challenge, etc.  The poor were "Pacified" by the Pinkertons, the coal and iron police, and various other murderers for hire.  Politics were rigged by political machines, if people don't have enough food, it's pretty easy to buy their votes.  Welfare and regulation put and end to that.

Yeah. It is impossible to prevent violence unless the state can have a major influence on the economy. Makes sense.

That is essentially correct.  In the US, there are lots of filled graves that prove it.