Dispatches - Hedge Funds are evil

I watched Channel 4's Dispatches programme last night entitled: 'Cameron's Money Men'.

It wasn't the most balanced of documentaries to say the least and portrayed Cameron as a hypocrite, saying that despite the Tory leaders lofty rhetoric about transparency in party funding, the Tory leader had not matched it with action.

So we had reporter Antony Barnett (never heard of him) dig up the standard stories about Lord Laidlaw and Lord Ashcroft.

But Barnett also sought to make a huge issue out of the Tories being funded by 'secretive' hedge fund managers who use that most 'evil' of financial practices to make money, namely short selling - the favourite scapegoat of every government of today.

The documentary was essentially saying: Tories are being backed by wealthy people which raises 'cash for access' issues and Tories should not be benefiting from short selling.

This made me think several things:

• How on earth is the Tory party supposed to raise the necessary funds to fight an election if it cannot take donations from wealthy backers?
• The Tories do not get given millions of pounds from unions like the Labour Party.
• Parties cannot rely on lots of very, very small donations to function - who do you personally know has either the inclination to donate to a political party and/or the money to do so in prosperous times, nevermind during an economic downturn?
• £50,000 a year per wealthy individual signed up to the 'Leaders dining club' is hardly a lot of money in the whole scheme of things. It's hardly buying influence. I know are ploiticians can be cheap, but surely not that cheap?
• Those who give the money are obviously going to be more inclined to do so if they get to meet Cameron, Osborne, Hague etc.
• Just because Cameron meets these people does it mean he rejects the views of voters who do not donate? This just does not follow.
• Why should Cameron not meet these types of people - they are voters and taxpayers.
• Modern communication costs lots of money; do we really want hard-pressed taxpayers paying for party funding because that's the alternative? I certainly do not - public spending and my taxes are high enough!
• In the US, donating money is equated with freedom of speech. Curtailing donations is seen by many as violating the 1st Amendment. Why, in this country, is exercising one's freedom of speech via a donation always seen as dodgy and morally corrupt? Cynics always choose to believe a donation is given to get something in return. It is not naive to suggest that sometimes people give money because they support the aims and aspiration of the party and its leader. You would be surprised how even businessmen are dazzled by politicians, and a meeting with them is enough for them. Those in public affairs are always amazed by this.

• Politicians have made short-selling the scapegoat in the current economic crisis, particularly the fall of HBOS, whereas data has shown short-selling activity had been steady and was not the cause. Governments like to show to their citizens that they are not helpless and can do things which is why we have a lot of unnecessary legislation because politicians feel they always have to act. Therefore, a ban on short-selling was a cheap, populist way of showing voters that government was keeping a check on the practices of those nasty bankers.
• Short-selling has been in practice for over a century and is a legitimate financial practice which even Alistair Darling has conceded. The Church of England has got on its high-horse saying it was morally wrong but was then found to have egg on its face after it was revealed it has benefited from the practice. Oh dear, God won't be happy...
• And as Guido has pointed out, the Lib Dem's Lord Oakeshott was up in arms on the Dispatches documentary about the Tories and short-selling but one of the Lib Dems biggest donors, is Paul Marshall who is worth over £300 million and has donated seven-figures sums to the Lib Dems despite being half of Marshall-Wace, hedge fund managers, who engage in short-selling! Oh dear, Lord Oakeshott is In the Brown!!!
• Furthermore, as Guido has also pointed out, Labour too has benefited from donations from hedge fund managers engaging in short-selling - inc. Paul Myners, Ronald Cohen, Derek Tullet and Gilad Hayeem to name a few - which perhaps explains Labour's silence on this issue.