Labour recently commissioned a report into ‘short termism’ in the UK which aims to take a look at the reasons for short term behaviour by businesses and recommend how this can be changed.
It makes several recommendations: taper capital gains tax; reduce reporting; governance changes; remuneration locks and so on. There are some good suggestions, some are by the by. Importantly, it will be entertaining watching Miliband advocating the abolition of stamp duty.
Sir George Cox, makes a very simple, yet astute observation:
“Government – regardless of political persuasion – needs to focus much more on how wealth is to be created, not just on how it should be distributed”
Alas, the report did not look at the effects of ultra low interest rates, fiat currencies and unlimited bond buying on short term views in business. But it shouldn’t be ignored.
Whatever happened to so called “zombie” businesses, drifting from one cheap loan to another?