Realist, not conformist analysis of the latest financial, business and political news

A Tad Stalinist – John McDonnell Insists Ex-Lehman Staff Can’t Have An Anniversary Party

We’ve always known that John McDonnell has more than a touch of the authoritarian about him. But this is merging into a full blown Stalinism here, as he insists – no, insists I tell ya’ – that the ex-staff of Lehman’s can’t meet up for drinkies on the tenth anniversary. Because disgusting failure of capitalism and reasons apparently.

That people in a free country can meet up for a drink for whatever reason they damn well want seems not to have impinged upon McDonnell’s thoughts.

Hundreds of former bankers at failed giant Lehman Brothers are to mark the 10th anniversary of its collapse with a swish cocktail and canape party in London.

The high-end reunion will be held at a secret venue on 15 September – exactly a decade after the bank shut down, triggering a global financial crash that was partially responsible for plunging Britain into austerity.

The party plans – revealed by Financial News – have been called “disgraceful” by Labour’s shadow chancellor, John McDonnell.

So, the workers, cruelly done by the management – a regular sort of McDonnell complaint – can’t meet up? Why is that?

Labour Shadow Chancellor Mr McDonnell slammed the reunion plans, saying: “This is absolutely sickening after a decade of people suffering austerity.”

He fumed: “It’s particularly disgraceful in the context of all the people who lost their jobs and homes to pay for bailing out these bankers who caused the financial crash, as well as against a backdrop of firefighters, police officers and other public servants of facing years of brutal Tory pay restraint.”

There seems to be some insistence here that we must be politically aware when we decide to have a drink. Really? This is what McDonnell’s version of freedom boils down to? No booze up without the Shadow Chancellor’s approval?

McDonnell said the reunion should not be going ahead.

Well, a good working definition of freedom is that the politicians don’t get to tell the people what to do.

Dennis Grainger, chairman of the Northern Rock Action Group at the UK Shareholders Association, said the Lehman reunion was “in very bad taste”.

That could be true, might not be, up to your sense of taste. But if you think it is then that’s the right reaction. I don’t approve is just fine, you may not do that because I don’t like it isn’t.

Over and above that there’s another fun here, which is that Lehman didn’t even cause the crash nor the subsequent problems. It didn’t even go bust as a result of what really did cause the subsequent problems.

To recall, what actually happened there was a bank run. That is, the systemic problems, not Lehman. Wholesale depositors simply were not willing to lend to banking institutions. The overnight financing market disappeared. Essentially, the entire banking system suffered a bank run. All subsequent problems flow from that.

Lehman suffered a run too. But it wasn’t the same at all. For Lehman wasn’t just illiquid, Lehman was actually insolvent. It had lost all its money (enough to wipe out the firm’s capital) in its own direct real estate investments. This isn’t what happened to the rest of the system. It’s not even what happened to Northern Rock. Lehman really was bust in a manner that the other banks weren’t. McDonnell can’t even get that right, can he?

Look, telling a few hundred people that they can’t get together for a quiet drink is Stalinist in that it’s insisting that private activity must conform to a particular political vision. Dangly bits to that matey.

Update. Via Guido:

Alastair Darling rightly points out “of all the problems we face today, frankly a bunch of people having a glass of wine is the least of them.”

I don’t agree with Darling much but he is at least sensible.

0 0 votes
Article Rating
Notify of

1 Comment
Newest Most Voted
Inline Feedbacks
View all comments
5 years ago

Tiny logical point for McDonnell. Given Lehman went bust by definition it wasn’t bailed out.

Would love your thoughts, please comment.x