Letter to the FT - Shame

24 Nov 2011

Thought for the day: Think about the difference between Kyle Bass and Martin Wolf.

The Financial Times has started deleting a lot of my comments, yet some of them are extremely important and need to be preserved, so I am going to start publishing my comments in tandem on this web site (first one here). Why are the FT deleting my comments? They are my ideological enemy, like Tony Blair they believe in “humane capitalism”, in other words they combine a love of laissez-faire economics with generous social security. Unlike Thatcher they despise talk about balancing the books, economic pain, social conservatism, virtue, justice, and the need for lifestyle changes. Unlike Chinese State Capitalists they despise the argument that Max Webber was right and Friedrich Hayek was wrong, that some policy decisions must transcend populism and rely on specialist intellectual amoral pragmatism, that experts need to plan the economy instead of letting it grow organically. Years ago there was an enormous gap between the hard headed professionals at the Financial Times and the liberal ideologue hobbyists at the Economist, but today the FT is just another political rag, yet unlike the Telegraph and the Guardian it shamefully hides its true nature.

I am not perfect, I can be outspoken, but I guess the FT has started really deleting my recent comments with a vengeance because in the last few days I have tried to turn the FT around by talking aggressively about shame - specifically the shame I think they should feel for giving bad advice. Politicians in Germany are beginning to blame the European Crisis on Anglo-Saxon financial commentary, and Pearson Plc, owner of the Financial Times and part owner of the Economist, is almost the Microsoft of the financial world, their newspaper and magazine are almost ubiquitous on the desks of traders and economists. I personally believe the Financial Times has been enormously influential on the European economic crisis and is largely responsible for the disastrous handling of this crisis. To give an example, one fashionable idea that you read about today is the idea that the eurozone crisis is like a disease. The core problem of the disease is bad politically cowardly policy making, and the symptoms are too much debt and weak growth. If you focus on the symptoms (eg money printing), but ignore the core problem (eg structural reform), the disease appears to vanish but in reality just keeps festering, and eventually it breaks out in new more virulent symptoms. Where did that rather Platonist like metaphor come from? I believe it came from this web site and from comments I made at the FT, and then spread to the FT journalists, and from there across the world. This is not the only example, I have watched how FT opinion spreads out across both markets and other journalists, how vastly influential it is. Long ago I used to trade short sterling and short Gilts, and every morning the head trader used to pick up on newspaper articles and say what do you think of that and what will it do to the market etc, to a large extent financial markets just reflect the newspaper consensus, unfortunately as the world has gotten more and more populist everyone has started to coalesce around one small group of supposedly elite but actually completely unworthy commentators. In the old days my head of trading used to mention articles in the Guardian, these days it all revolves around the FT. I have devoted my life to turning around the elite, and the FT is the European elite's newspaper, so for the time being they are a vital part of my campaign to save the world!

Today the FT has a competitor, namely the Wall Street Journal. However, the WSJ has only recently returned from the wilderness, only in the last year or so it has jettisoned journalists such as Irwin Stelzer (today you can read his nonsense at Telegraph) and replaced them with journalists such as Simon Nixon. There is an article in today's Wall Street Journal analysing the argument that if Merkel hadn't been such a muddle headed wimp Ireland would never have needed a bail-out in the first place. This is what the Irish are now saying, they describe the bail-out as having been forced upon them by Merkel's bad decision making, and specifically her appallingly irresponsible decision to restructure Greece (which saved only a small amount of money anyway). If you go back in time to that event you will see it was most of all the Financial Times who pushed relentlessly for Greek orderly default. Martin Wolf and Wolfgang Munchau published countless articles about Greek default and changed the whole perception of financial markets. European Sovereign default went from being unthinkable to something you read about every day over your cornflakes, something the FT started calling absolutely "inevitable".

The decision to restructure Greece was actually taken by Angel Merkel's finance minister Wolfgang Schäuble, and Schäuble wrote several articles and gave several interviews to the FT. In fact I think we could basically say that the Financial Times destroyed Europe by corrupting Wolfgang Schäuble. You can not believe how hard I worked to reach people like Schäuble and fight against the FT's disastrous advice, but I failed and Europe today is consequently in tatters. FT journalists will tell you that Nicolas Sarkozy and lots of other people believed in Greek restructuring, but Schäuble knows Sarkozy is a zombie, the opinion that mattered to him was the elite consensus represented by the FT. FT journalists will tell you that their journalism is popular, but as Steve Jobs said hell always outsells heaven in the short term. Hayek was wrong, populism is not an accurate measure of righteousness, especially in complex financial issues. The mistake the FT have made is vanity - instead of reporting what experts think, they reported what they thought, and because of their reputation they created a false sense of expert unanimity. I criticised them for parochialism and unprofessionalism, and they did start something called the "A List" which brought in outside experts. But they filtered their expert advice, they filled it up with American politicians and pension fund managers. They love George Soros, but Soros is not longer an expert, he is a politician, and a bad one at that. The goal of journalism is not be bold and inspirational or to write what people want to hear, it is to be the mouthpiece of the real experts - in finance the star traders who don't give a stuff about political correctness and politics. If you want to see an example of what real traders are like take a look at Kyle Bass being interviewed on BBC Hard Talk. The job of the FT is to hunt down these real experts and report what they say, not to make the news themselves or pull out the elite phonebook and invite famous idiots who agree with them to back them up. Now it has gotten to the point where the A List is a used as a sort of riposte to the many negative comments they receive! 

If you think about it carefully, the FT is the perfect microcosm of the failure of capitalism and democracy - it has all the self serving kool-aid drinking monopolistic failings of both Microsoft and American politics. Schäuble realises he made a mistake, he is now as sick and angry at the FT as the world is at Microsoft. What financial news needs, but does not have, is an Apple. The same goes for Western democracy.

So in the last week or two I wrote a number a comments saying things like "When will the FT face up to the fact that the real evil is not the politicians but the commentary which confuses them? When will the FT face up to fact that its irresponsible commentary has condemned millions to unemployment? When will the FT start to feel shame? When will the FT start to change?"

Here is an example of one of my many deleted comments, it is aggressive!