The captain of the universe, known as Captain Copycat, runs an investment fund called Copycat Partners LLP, registered in the IFSC but run out of a swanky office in St James in London.

He is having a taxing week.

Copycat Partners’ investment strategy is to copy what the next lad does and thus make money.

When the market is going up, Captain Copycat buys assets and rides the wave. Copycat’s behaviour obviously reinforces the upward market momentum.

In contrast, when the market is going down Captain Copycat sells everything aggressively, using simple gambling tools known as ‘put options’.

This in turn pushes the market down further.

For this carry-on, Captain Copycat pays himself very well. Why shouldn’t he? After all, he has been successful for some time. He is ‘short’ the European banks, but then again who isn’t?

If there’s truth in last week’s rumours that the Swiss National Bank borrowed dollars from the Federal Reserve in order to plug a hole in a large domestic bank, Captain Copycat figures that the next phase of the European banking crisis will be much closer to the core banks than to the Mickey Mouse outfits in Dublin or Athens.

After all, with the governments intent on bailing out the banks, it’s only a matter of time before the little guy – the taxpayer – comes to the rescue, and then the market will turn and he will start buying again.

Speaking of tax, Captain Copycat pays very little.

On Friday afternoon, from the comfort of his first-class seat on a Cathay Pacific flight, he feels reasonably comfortable as he heads out to see his Asian investors – even after a week like this.

He flicks through the movies, what will he watch before his lunch? Why should Captain Copycat worry? This is all playing out as it always does.

The crisis is nothing more than a re-run of previous ones.

The Fed will do the same; in fact this week the Fed announced it would keep rates as low as necessary. Obama won’t tax the rich, as the Republicans and the Tea Party are keeping him in check.

The Chinese still refuse to let their currency rise, which means that all the Chinese money is recycled out into the world economy, rather than in China.

Where do you think all the money for Copycat Partners comes from? As long as the Chinese keep this policy up, there will always be money for Captain Copycat.

As he sips his class of Bollinger, he muses that the world economy, and particularly the financial market liquidity, is a bit like a champagne pyramid, similar to the one he paid for in his tent at Royal Ascot.

The more champagne you pour in at the top, the more the stuff trickles down to the glasses below and because his fund, Copycat Partners, is like one of the glasses, as long as the Chinese are providing liquidity at the top, his glass will always be full.

As for the Europeans, Captain Copycat is a little bit more worried, because of their moves this week to resurrect a tax on financial flows in Europe. They couldn’t upset the apple cart, could they? This is the so-called Tobin tax (named after Nobel Laureate economist James Tobin).

According to the Financial Times, the volume of financial transactions in Europe in 2010 was 115 times the European Union’s €12,300 billion gross domestic product. This is Captain Copycat’s bread and butter. If the Europeans levied a tax at a rate of 0.05 per cent, then – even taking account of the reduction in trading activity that would follow the introduction of such a tax – the EU could raise €215 billion annually by taxing exchange-traded and over-the-counter transactions.

As he stretches out to snooze, this prospect niggles at Captain Copycat.

Surely the world will bring the Europeans to their senses and keep to Plan A, underwriting him and his class, keeping the liquidity pyramid flowing, giving any bill to the poor and allowing the market to rectify things?

Of course people like Captain Copycat should be taxed by the EU.I t should be clear that the ‘business as usual’ policy can’t go on. The French and Germans are right to put the Tobin tax back on the table, but they are wrong to stop there.

It should be clear to everyone now that the present global policy is not working.

There is Plenty of liquidity around the world, but this has not translated to spending or investment, because people are scared.

So the economies of the US, British and Germany are weakening.

While the Fed can go for a third bout of quantitative easing it won’t work, because the money is getting stuck in the banks and is only finding its way into the hands of the likes of Captain Copycat rather than real entrepreneurs.

Likewise in Europe, the ECB is keeping rates low, but activity is drying up.

The correct response to low growth is not austerity, because everyone (apart from the dingbats who believe the voodoo economics of the expansionary fiscal contraction) knows that austerity will make things worse.

The western world is facing a classic liquidity trap, where easy money is not translating to spending because we are faced with zombie households whose balance sheet is destroyed by too much debt and falling house prices. So, like it or not, the state has to lead the recovery by investing hugely in people and projects.

But the snag is that the markets are worried about default, so you can’t borrow more when the people you want to borrow from are worried that you won’t pay debt. So what do you do?

Well, we have got to raise tax and, whether you like it or not, raise taxes on the very rich. A Tobin tax on financial transactions might be the first step, and from there an increase in other taxes.

But don’t take my word for it; listen to what the world’s greatest investor, Warren Buffett, was saying during the week. Interviewed by Charlie Rose and writing in the New York Times, Buffett again called for the mega-rich like himself to be taxed more.

‘‘For those making more than $1 million — there were 236,883 of them in 2009 in the US – I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains.

And for those who make $10 million or more – there were 8,274 in 2009 – I would suggest an additional increase in rate.

I think it’s important that whatever is done restores to a degree people’s faith in the fact that their government can work,” he wrote.

Buffett – the poster boy for the likes of Captain Copycat – realises that a tax system has to be fair and moral. Otherwise you undermine government.

Unlike Captain Copycat, Buffett is wise. He knows that the mega-rich can’t hide. Change is coming and Buffett senses it as he has done for years.

It’s interesting that in the time of crisis in America, the mega-rich are showing leadership and solidarity by saying, ‘‘Tax me more’’, whereas in Ireland at a time of crisis, the mega-rich remain as tax exiles!

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