Thursday, 7 March 2013

Why bankers' bonuses are making the rest of us poorer

There I was encouraging mainstream political parties to be a little more populist in order to beat the joke parties, from the Tea Party to UKIP and Beppe Grillo - to stop being so forgiving to big corporations and big bureaucracies just because their role ought to be important. To see behind the management speak and corporate slosh.

I'm not quite so naive that I expect George Osborne to glance at my blog before taking major decisions.  But of all the reasons to storm off to Brussels, cheered along by Boris Johnson, defending the right of banks to pay whatever inflationary bonuses they want really is really getting priorities skewed.

If that is the way the Conservative Party sees their most important objectives in Brussels - well then, they deserve to be beaten by populist headbangers.  They also will be.

But what is most infuriating about Osborne and Johnson is that they don't see the damage that the bonus culture in banking is doing to us.

It encourages bankers to pay attention to global speculation rather than providing the loans for productive business.

It squanders the imagination and talent of the brightest and the best, by luring them out of the real economy - and damages the nation's prospects as a result.

It prices homes out of the reach of buyers and renters alike in the capital.

It corrodes the values of the hard-working middle classes, who they claim to support - by making their efforts and their earnings look ridiculous.

It corrodes and subverts the economy.

There is another question - I know - about whether the European bonus cap will be effective.  I suspect it will be one of a raft of measures that will be needed.  But why don't they see that bankers bonuses are making the rest of us poorer?

And why are they not prioritising the business of breaking up RBS, turning it into the effective lending infrastructure we so badly need?  Osborne and Johnson are like First World War generals, desperately trying to fight the last war but one - and consequently losing the present one.

1 comment:

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