Review of Economics BBC lies Robert Peston: Who Runs Britain? And Who's to Blame for the Economic Mess We're in?
Worthless unintelligent innumerate BBC-style flannel from a hack, November 30, 2010This book was published in Feb 2008, written, according to the flyleaf, by the BBC's 'award-winning' Business Editor. Among other things, he had the 'Scoop of the Year on Northern Rock seeking emergency help from the Bank of England' which must mean only that they told him first; I wonder why...
It has ten chapters with childish titles (e.g. 'The King of Jackpot Capitalism')—a mixture of human interest drivel—either to hide Peston's ignorance, or to give the audience something easy, or to simply evade the truth.
1 Starts with his autobiography—an ordinary Jewish boy (he notes without comment his ex-school is now largely immigrant|). There's scattered information—his parents, the post-WW2 world, non-dom and wealthy entrepreneurs, tax havens, capital movements, Indian steel, China, executives' pay. Almost all is unsourced, though sometimes the Financial Times or Times or some magazine ('an analysis in Prospect magazine'). He claims to believe the usual conventions on entrepreneurs and performance-related pay (except one must assume for BBC hacks, of course). Obviously there are thousands of relevant people; the choice no doubt is made for him by editors and scribblers and publicity-seekers.
2 Borrowing: goes through the general idea of company takeovers using borrowed money, by comparison with house prices bought on mortgages, in a time of rising prices—he gives no explanation of why these should be rising. He comments (p56) that Gordon Brown confused US 'venture capital' (putting money into promising typically high tech start-ups) with a British sense (putting money into asset-strippers etc).
3 and 4 deal mostly with Philip Green who bought a chain of clothes shops and made money by improving them; or something like that. (He was knighted 'for services to the retail industry'). His strength seems to be that he knew the business thoroughly—letters of credit, warehousing buying from China, cancelled orders etc—if only civil servants were knowledgeable. Chapter 4 looks at an attempted takeover of Marks and Spencer. I have to assume Peston's book came out in a hurry as all this material is anecdotal and essentially of its time.
5 'Poison Manufacturers'—a chapter of random bits and pieces about Robert Shiller's book 'The New Financial Order' on e.g. unlikely schemes such as insuring against house price falls, and more significantly reducing the gap between wealthy and 'developing' nations [except in Palestine?] China, Japan, oil and gas are listed as great exports though none are quantified. One figure quoted is $600bn of sub-prime mortgages as 'toxic debt'; however even if people borrow too much, after throwing them out some value is recoverable—typically, Peston makes no attempt to quantify this.
6 is largely on Goldman Sachs (almost as an anthropology subject—omitting one fact), and JP Morgan. The City of London—330,000 people—is said to be 'astonishingly productive' although of course what it actually does is unstated. Peston quotes a few facts, or perhaps factoids: (p204) ten hedge-fund managers in 2006 earned more than $500M says 'Alpha', presumably a magazine. A German paper, Bild, (p210) says they are 'like a plague of locusts .. devour everything, then fly on..'. P 215 has a conflict of interest—the holding funds don't want the companies they own to outperform themselves.
7 Pensions: long chapter bemoaning the way Britain's pensions have been under long-term attack. The long account is unsourced, and it's impossible to know how reliable it is. Just as the Tories changed the definition of 'unemployed' to suit themselves—20 times? 30 times?—the laws on pensions and things like tax relief, % limits on contributions, inflation linking or not, tax credit, ACT, valuing of the liabilities have been changed so often by Lawson and Brown and others—quite apart from the ONS getting things wrong—that the subject is highly confusing; very probably intentionally.
8 'Democracy for Sale' is mostly about Levy, fundraiser for the 'Labour' Party—as it's still called—but also the Conservatives. Including not declaring loans—if they expect their money back, it's not really a gift, is it? It's impossible to know how reliable this material is. Tagged on is material on cash for honours. As an example, Gulam Noon is quoted, supplying 120,000 packaged meals a day to Sainsburys [a supermarket chain]. These are designed say Peston for immigrants—for some reason Peston fails to mention that taxpayer's' money for housing, expenses, health, and benefits and presumably barbaric slaughter methods, with standard industrial equipment did all this; Peston typically regards this as wonderful.
9 Royal Mail (the Post Office—renamed Consignia for a bit) was reorganised by Allan Leighton. Peston duly notes that he swore sometimes and gets up at 5 a.m.
10 Who runs Britain?—Well—whoever it is hasn't told Peston!
It's hard to criticise unresisting imbecility, but let me list a few things:---
** Naturally as with all subjects trying to evade scrutiny inspection Peston uses the elaborate junk vocabulary—'tax efficient', 'wealth creator', 'stakeholder'—you can imagine.
** (p171) 'financial products whose dangers were misunderstood'—175 'hard for regulators to work out which hedge funds, or pension funds, or insurers, or banks are actually holding the instruments'. Peston does NOT address the issue of why banks charge low rates of interest on risky matters. Reorganisation mightn't work; bag of miscellaneous loans might fail. It seems likely that there must have been collusion. 'Private Eye' ran a piece in about 1975 called 'Pension Fun' on tricks used by pension funds holders to get money on the side. Another likely issue is the Rothschild money printing aspect of things and the Bank of England/ Fed. (Peston makes no mention of 'Quantitative easing'). There's amusing material on Standard and Poors, to the effect they pleaded in court they were only giving a journalistic opinion on AAA style judgements. Substandard and Poor, indeed.
** Like all hacks, Peston has no imaginative comparisons. Consider for example average North American/ European people. They don't (or didn't) pay much attention to things like drink and cigarettes and junk/spree spending; say £100/year isn't really noticeable. If you put the adult population at say 800M, this amounts to £80 billion a year. The 'entrepreneurs' might be regarded as hoovering up spare change in obsessive mode; this sort of approximation is important to avoid silly panics.
** As an example, chapter 9 on the Royal Mail reorganisation states it was losing about £1M each day. Say, in a year, getting on for half a billion. Is that a lot? Well, that's about what is 'paid' in 'free' legal advice to 'asylum seekers', all of whom have broken the law about travelling to the 'next safe' country. Peston thinks in his simple-minded way that 30,000 'redundancies' (i.e. firings) and 3,000 or so Post Offices closed was worth that. Recently, some energy company (i.e. holding company that had been sold some of Britain's utilities) made £8bn reported profit—enough to keep post office open 25 years. It's also about a third of the value of homes given to immigrants in one year—not counting the free services
** Peston says nothing about contributions to the EU—with its accounts not signed off; I've seen a figure of net $6bn, but wouldn't swear to it. The cost of wars, de-industrialisation, financing Indian steel and space and airports (Britain gave a steelworks to India; and also paid for an entire supermodern airport). The cost of the 'global warming' fraud—supported by the BBC, incidentally—the cost of selling off utilities, the astronomical costs of immigration are all ignored by Peston.
** It's perhaps worth making a wry note on 'charitable' giving. For example on 'academies'—where a huge building is given in exchange for a fraction of its value. 'AIDS' work is another notorious fraud. I noticed (p202) £1M for a 'Lib Dem think tank' run by 'Jennifer Moses, a retired Goldman Sachs banker'.
Peston appears to still 'work' for the BBC. He should be out of a job and his 'pension' removed surgically.