Saturday, January 09, 2010

Bank Bonuses: there is a debate to be had

The world's biggest investment banks are expected to pay out more than $65bn (£40bn) in salaries and bonuses in the next two weeks, reinforcing the view that it is business as usual on Wall Street and in the City barely a year since the taxpayer bailout of the banking system. (Guardian report)

The little ray of sunshine here is that the Treasury should collect £2 billion from the laudable 50% windfall tax on bonuses that Darling has enacted. But it is a little ray behind a bloody great black cumulo-nimbus of Business As Usual from the banksters.

The regular excuse/reason given for bonuses is that if the City does not pay bonuses, the "best people" (i.e. the numpties who brought the world's banking system to the very brink of meltdown in 2008) will up sticks and go somewhere where their skills are justly rewarded.

What this regular excuse overlooks is that the only place for them to go is Wall Street, because it is the Anglo-American banksters who lead the world in unregulated greed. And in fact, Obama is inclined to be tougher on the idiots than the pusillanimous Darling, who mouths off a lot about the idiots, but does precious little in the trouser department.

All it takes is a bit of coordinated action between the US and UK to curb the excesses of the greedsters, and we could be sorted. But no, because both countries are hot-beds of free market fundamentalist fanatics.

The other unspoken aspect of the bonus culture is that bonuses are paid in recognition for individual effort, as opposed to corporate teamwork, and therefore if a bonus recipient (for example, Fred Goodwin) fouls up and lands his company (e.G RBS) with billions of pounds worth of debt, he should be made bankrupt, thus annihilating at least a proportion of the debt.

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