Writing in that bastion of free-market conservatism, The Daily Telegraph, Alex Proud looks at the recent collapse of Phones 4U, and asks why aren’t the British middle-classes staging a revolution? He paints a grim picture of the endgame of late-stage capitalism.
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.
People like this are being allowed to loot the economy with impunity, and they’ve being allowed to get away with it because they’re being protected by the political establishment, which has allowed itself to be bought. It explains why nobody was prosecuted for fraud in the wake of the 2008 banking crisis, and there has been no tightening of the lax regulations that allowed this crisis to happen.
It’s exactly the same as the declining cities in parts of Italy and the United States where The Mafia has its hooks in goverment and bleeds the local economies dry. The only difference is The Mafia kill those who oppose them, and the private equity houses haven’t (yet) crossed that line.
The mantra is we must coddle the rich because they’re “wealth creators”. But this mantra comes from the paid shills of these thieves and from their useful idiots who have read too much Ayn Rand. But, as the Phones4U collapse shows, this is a lie. They don’t create wealth, they merely steal it. As as for them being “job creators”, don’t make me laugh.