I gotta say, when even the right-wing Telegraph says it…
Why aren’t the middle classes revolting?
Words you probably never thought you’d read in the Telegraph. Words which, as a Gladstonian Liberal, I never thought I’d write. But seriously, why aren’t we seeing scenes reminiscent of Paris in 1968? Moscow in 1917? Boston in 1773?
My current fury is occasioned the Phones4U scandal (and it really is a scandal).
Phones4U was bought by the private equity house, BC Partners, in 2011 for £200m. BC then borrowed £205m and, having saddled the company with vast amounts of debt, paid themselves a dividend of £223m. Crippled by debt, the company has now collapsed into administration.
The people who crippled it have walked away with nearly £20m million, while 5,600 people face losing their jobs. The taxman may also be stiffed on £90m in unpaid VAT and PAYE. It’s like a version of 1987’s Wall Street on steroids, the difference being that Gordon Gecko wins at the end and everyone shrugs and says, “Well, it’s not ideal, but really we need guys like him.”
I’m not financially sophisticated enough to understand the labyrinthine ins and outs of private equity deals. But I don’t think I need to be. Here, my relative ignorance is actually a plus. You took a viable company, ran up ridiculous levels of debt, paid yourselves millions and then walked away, leaving unemployment and unpaid tax bills in your wake. What’s to understand? We should be calling for your heads on a plate.
This column is supposed to be a “lifestyle” column, not a “business” column. So, you might ask yourself, why am I writing about conscience-free private equity deals? Well, it’s because, assuming that you’re part of the broad middle class who make up the vast majority of the Telegraph’s readership, this is the most important lifestyle issue you’ll ever face.
Instead of shrugging and saying, “This is the world we live in” you should be on the streets, you should be calling for this sort of thing to be a jailable offence, and you should want to see these guys up in front of parliament (or, better yet, in stocks) explaining why they made around £3,500 for every person they put out of a job. Seriously, Stefano Quadrio Curzio, the managing partner at BC, should be ashamed to show his face in public.
The point is, along with the people who sold phones who are now unemployed, some of Phones4U’s employees, were officer class, just like you. Their jobs too have gone. It’s just another example of people who build and make nothing gutting businesses, privatising the profits and socialising the losses. Slowly, it makes us all poorer. So, yes, this is a lifestyle issue inasmuch as it’s about ensuring that you and your children will be able to worry about things like Farrow & Ball Paint colours, rather than getting another credit card to pay the rent.
All these guys care about is money. They don’t care about society. They certainly don’t care about jobs and they don’t care about you.
OK, you might say, but this has always been going on. But it hasn’t. This sort of utterly amoral screw-everyone capitalism has become much more prevalent in the last 15 years. Our financial elite is now totally out of control. They learned nothing from the crisis, except that the rest of us were stupid enough to give them a second chance. And, now, having plucked all the “low hanging fruit,” they’re destroying the middle classes for profit.
Our current problems have their roots in the early 80s. While much of what Reagan and Thatcher did was necessary, the trouble is that they set a deregulatory train in motion which, over the last couple of decades has dismantled so much of the legal framework that protected us from greedy scuzzballs.
The middle classes went along with it. We were sick of the Left, tired of powerful unions and, besides, very few us could remember the inequality of the 1920s that gave rise to many of these regulations in the first place. Also, vain fools that we were, we identified upwards. We thought the elite had our interests at heart. The 0.1% must have found this pretty cute. They knew the truth. We weren’t their pals, we were just at the end of the line for the financial blood-letting.
Go read the rest. I’m surprised they printed it.
Thanks to Tony Munter.