The Emperor’s new clothes: A morality tale for modern times

We still keep being taken in when we ought to know better, says David Randall (with thanks to Hans Christian Andersen)

Once upon a time, in a land closer to home than you’d think, there lived an emperor whose court was rather too prone to swallow the trends of the day without question. We all know that when a cutting-edge designer dressed the emperor, the court fawned over what was, in reality, an illusion. Well, it’s now turned out that the emperor’s new “suit” was no isolated incident; and, especially since the credit crunch, there have been similar stories to tell.

The child in all of us may always have been sceptical of these received wisdoms, yet all but the bravest go along with them. Now these tales can be told:

The Emperor’s New Cricket Tournament

The emperor loved to encourage sport, but rarely had the funds to do so himself. And then, one day, the doors of his court opened and his courtiers presented a man called Allen Stanford, recently arrived in the palace grounds by helicopter. “I wish,” said Mr Stanford, “to make your cricketers rich beyond the dreams of avarice by sponsoring a tournament worth $20,000,000. Look, I just happen to have the money with me now.” And, so saying, he revealed a table on which was piled $20m in fresh notes. “That is marvellous,” said the emperor. “Oh yes,” said the courtiers, who included the game’s governing body. “So generous! What a good man!” Then, up spoke a boy at the back. “Are we sure that this money is not the proceeds ofover-leveraged borrowing from high net worth clients in Latin America who have been promised suspiciously high-yield returns?” “Nonsense,” said the courtiers, “anyone can see from Mr Stanford’s helicopter and open, smiling Texan face that these funds are good. And, as The Sunday Times wrote last week: ‘The billionaire has a history of seeing plans through to fruition’.”

They might have gone on believing this, had not the Securities Exchange Commission investigated and the FBI served Mr Stanford with papers alleging a £5.6bn fraud. “The moral,” said the wise boy, “is not to be taken in by financiers whose funds are mainly off-shore, and who offer rates that considerably exceed inflation-adjusted market averages. On reflection, I think we’d do well to be wary of all financiers at the moment.”

The Emperor’s Prime Minister-in-Waiting

For months, the court had been buzzing with speculation. The PM was a bit of a dull old stick, and had been around for so long. But here, said the ones in the know, is this chap called David Miliband. “Very bright,” some said. “And so young! So energetic!” said others. “Get him in now, call a snap election, and we could yet save our seats.” Rumours of a leadership bid grew and grew, and by the time of the party conference had reached a clamour. After all, many at court read The Guardian, and the paper wrote he is “the man to free the party from the bondage of disastrous leadership”.

Well, the wise little boy was about to point out some home truths, when Miliband appeared at the conference holding a banana. “Behold,” said the boy in a sarcastic tone, “your leader-in-waiting.” And the court laughed. How ever, they asked, did we think he might make a leader? Easy, replied the boy, look at the alternatives. Sure enough, within four months Harriet Harman was being mentioned.

The Emperor’s Property Portfolio

“I’ve realised I’m undergeared,” said the emperor one morning. “The value of my palace has increased, so I’m going to up my mortgage, release some equity, and spend it.” The court was impressed. “What a brilliant idea,” they said, and soon they’d all done the same. The boy, however, was bothered. “Prices can go down as well as up, you know. And I’d be worried about over-heated housing values forcing out many of the first-time buyers who traditionally sustain market growth.” The court looked skyward. “What does a mere child know about economics?” they said. Time passed, and there was a clearing of a small throat at the back of the room. “Have you seen what’s happening to property?” asked the boy. “Average prices fell 18 per cent last year, mortgage lending is at a 34-year low, and the Financial Services Authority predicts two million people could soon be in negative equity.” And there was a long, embarrassed silence.

The Emperor’s New Leader of the Opposition

“I like that new leader of the opposition,” said the emperor. “Oh, yes,” said the court, “we agree. He’s refreshingly green for a Conservative. And so emotionally literate!” Well, time passed, recession came, and the little boy felt bound to speak out. “Look,” he said, “I don’t want to be a downer, but have you seen his economic policies?”

The Emperor’s New Art Investments

You’d think by now the court would have realised that the emperor was a bit of a sucker. But when a man called Damien Hirst came along and sold him some expensive works of contemporary art, they were completely taken in. “Look at this! A shark in formaldehyde! How clever!” said a courtier with a beard. “And this cut-away of a torso!” said a tall woman with horn-rimmed spectacles. “How does he think of these things!” The boy sighed. “Do you really need me to tell you that these objects are only ‘art’ because Mr Hirst and others assert they are. Marcel Duchamp was doing this kind of thing 90 years ago. Take this torso. It’s only an enlarged copy of a child’s toy.” The courtiers were unmoved. “But all the papers are writing about Mr Hirst,” said one. “William Feaver in The Observer called him ‘the leading brainstormer of his generation’.” The boy said: “You’ll find out.” And, eventually, they did.

The Emperor’s New Coffee

A man appeared before the emperor and produced some paper cups with a plastic lids. “This,” he said, holding one up, “is a Starbucks.” The emperor tasted it, and liked it. Other cups were passed round. “Oooh, it’s good,” said one courtier. “Yes,” said another, “it’s not just a coffee, it’s a lifestyle!” And a third, who had been to America, said: “Unless I’m much mistaken, it’s a decaffeinated mochaccino with a shot of caramel.” And then, from the rear there came a small voice. “Open the lid,” it said. They did. “Why, it’s not full!” said one. “Yes,” said another, “and after the air there’s a load of froth!” “And,” said the boy, “it’s £2.75 a cup.” “Well, really!” said the court, “who’d pay that in these recessionary times!”

The Emperor’s Unsecured Lending

One day the emperor appeared in a wonderful new suit that really existed. “How ever did you afford that?” asked the court. “Well,” said the emperor, “I get sent all these offers of credit cards. You use them instead of money, and you only have to pay back part of your spending each month.” Soon the whole court had cards – and lots of new suits. “This unsecured lending is wonderful,” said a courtier. “It takes the waiting out of wanting.” “I should point out,” said a by-now familiar high-pitched voice at the back, “that although your monthly statements don’t show it, you are actually paying an APR on any uncleared amounts of up to 19.9 per cent.” The court looked thoughtful. “But what if there was a recession and I lost my job?” asked one. “Exactly,” said the boy. “You’d be buggered.”

The Emperor’s Social Networking Venture

“I’m on Facebook now,” said the emperor, “and I’ve poked you all. I want you to be my online friends.” Soon all the court was on it, updating their pages and uploading pictures of themselves. For once, the boy was speechless. “It’s just a phase they’re going through,” he thought. And, as usual, he was right.

The Little Boy’s New Baby

It should be realised that the little boy wasn’t always so smart. “I’m growing up now,” he said one day, “I’m 12, and I’ve got a girlfriend who’s 14. It’s cool. Her mum lets me go round for sleep-overs and unprotected fun and games. A year later, when he became a father at 13, it was the court’s turn to sigh.