From easy money to $1m comic books

Allister Heath
Q. What do quantitative easing and super-hero comic books have in common? A. Quite a lot.

Cheap money from central bank asset purchases and ultra-low interest rates is helping to reinflate bubbles in parts of the global economy. UK house prices are soaring irrationally again, for instance. But my favourite anecdote comes from, a US auction site which yesterday sold an admittedly rare, top-condition copy of the world’s most coveted comic book for a breath-taking $1m. That figure – more than three times higher than the prior record-holder – was for a copy of Action Comics #1, which marked the 1938 debut of Superman, thus changing the course of pop culture. Its cover price at the time was ten cents; it is now seen as the Holy Grail of comic books. But $1m? It certainly smacks of bubblenomics.

On the one hand, the economy is showing signs of renewed weakness – there was a flurry of warnings yesterday from around the world, including a downbeat statement from Mervyn King, a collapse in US consumer confidence and all sorts of warnings of a double-dip recession. On the other, there are renewed signs of fresh bubbles. One sign is the number of emails I am getting from so-called experts telling me the housing market is once again a great investment. Spotting bubbles is no science – but these sorts of trends worry me deeply.

IT is pretty hardcore stuff. No bonuses at all for anybody in a top management job at any bank that is enjoying implicit or explicit government support, a top rate of capital gains tax of 50 per cent, a one per cent annual tax on homes worth £2m or more, a unilateral break-up of all universal banks in London – UK or foreign-owned – a Tobin tax on financial transactions – these are some of the policies advocated by Liberal Democrat leader Nick Clegg in his interview in today’s City A.M. (see page 1 and page 17). With the polls narrowing, there is a good chance the LibDems could end up as the kingmakers in a hung parliament come May. Clearly, Clegg’s anti-bank, anti-private equity, anti-hedge fund, tax-the-wealthy policies will resonate with a large chunk of the electorate – but they would also have a devastating effect on London’s competitiveness, chase away inward investment, destroy jobs and deal a crippling blow to the UK’s already shrivelled private sector tax base. Those who Clegg genuinely seeks to help – the poor – would suffer from reduced opportunities, weaker growth and – over time – reduced living standards.

But that is merely my opinion – the real question is: what do those who work in the City, Canary Wharf, Mayfair and all of London’s other business districts really believe? What do enterprising, hard-working members of London’s business and investment community really think? To find out, we have teamed up with, Westminster’s most influential news site, to create a unique daily poll (see below). PoliticsHome already produces a daily five-question, 1-minute BlackBerry and iPhone compatible survey for Westminster policymakers; we will be doing the same for those who work in business and finance. Readers should fill in the form in strict confidence at When the poll launches, we will be reporting on its findings daily, revealing what the City really thinks – and letting the politicians know, loud and clear.
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