May 24, 2016

Martin Wolf blames squarely the elite. I agree, but, in the elite to be blamed, Martin Wolf is one.

Sir, you must understand why, as a Venezuelan, suffering the real life impacts from leftwing populism, I find it so hard to identify with Martin Wolf’s “How to defeat rightwing populism” May 25.

Wolf writes: “Many seem to think that things could not get worse. Oh yes, they could. Things could get far worse, not just in the US, but across the world”. In that Wolf is absolutely right.

But when he then adds: “Mr Trump… has no notion of the foundations of US success” I must react.

Because Trump, as one of those go get it risk it all entrepreneur, is so much more the reflection of the foundations of the US success, than, for instance, those sissy bank regulators who decree that banks must hold more capital against what is perceived as risky… as if being perceived as risky is not bad enough.

Do I believe Trump is a rightwing populist? Yes I do! And do I think he would be good for America as a president? No I don’t!

But, just like Wolf writes: “If rightwing populism is to be defeated, one must offer alternatives”, one of those alternatives is telling it like it is! And Wolf does not!

When Wolf writes: “US banks have paid more than $200bn in fines” the question should be: what would have happened if those fines, as so many times I had written to FT about had, instead of in cash, been paid in voting shares of the banks? Then we would at least not be suffering the bank credit austerity that results from higher capital requirements when bank capital is scarce.

Martin Wolf blames squarely the elite. Again I agree, but, in that elite, I also include Martin Wolf. How the heck can he defend capital requirements for banks that set a risk weight of zero for the sovereign, and one of 100 percent or more for the citizens on which the sovereign’s strength depends?

Wolf writes: “Populists despise institutions and reject expertise. They offer, instead, charisma and ignorance”. Does he mean like that populist ignorance which has offered to make our banks safe, by putting a risk weight of 20% on the AAA to AA rated and 150% on the below BB- rated, those that the banks would, ex ante, not even touch with a ten feet pole?

@PerKurowski ©