Monday, 14 December 2009


"Bankers took all the money in the economy in their bonuses and so we need to get rid of bankers, destroy the banks and get rid of capitalism." bleat ... well everyone really. I know most of my friends say this too so excuse me whilst I abuse you for a bit. ARE YOU ALL FUCKING INSANE?

You realise all of you that for all banks payroll is a negligible fraction of turnover? Millions of pounds in bonuses sounds like a lot of money and I'd be very glad to get some of that. But compared to the billions the banks deal with everyday it's small change. At every point of time other than a recession we thank our lucky stars we have the city of London and the fine men and women who risk stress levels that would literally kill most people in order to fund a good fraction of the UK economy.

Real money is made in financial dealing but in order for that to happen you need to take risks. When there's a boom on everyone yells at bankers to take more risk and earn more money so the rest of us can have the obscene levels of personal mortgage and credit card debt we all have. Then when things turn sour the same way they have done on a regular cycle since we've had any kind of capitalist economy, we blame the bankers for listening to us. You simply cant have it both ways.

I get really angry to hear on Question Time or other discussions that are supposed to be serious people suggesting things like sending bankers to the front line in Afghanistan. Seriously suggesting that you want people to die because they have been paid well and in the course of doing their job the natural fluctuation of the economy hurt many people is totally insane. These people get paid huge sums of money because nobody else can do what they do, if you seriously think that bankers are incompetent try becoming one. After you've gone through enough economic theory to melt your brain and you're thrown onto a trading floor where a you must time the manipulation of thousands of different stock prices and quantities exactly in time with everyone else who is working hard against you. You pause for 30 seconds and you've lost the company a million pounds. The shear amount of money you are responsible for and how bad things are if you fail is the result of unimaginable stress which is why you will probably retire aged 45.

I'm damn glad they get paid megabucks in the boom, because if I dont pay them megabucks (and I'm the one paying them, I've got a bank account) someone else will. And it's not like in the boom anyone is forcing you to pay them. The co-operative bank exists, if you dont like most banks then bloody vote with your feet and go to them. If you dont like funding evil oil companies and other things that make your liberal middle-class conscience feel enraged then put your money where your mouth is, take you money way from these evil bankers, stick it in the co-op. You have no idea how fast they'll change their ways.

The government now owns a large part of a lot of banks. By giving large sums of money they secured banks that should have failed. That's not how a capitalist society works, that's not the way a lot of people wanted them to do it, it's not how I wanted them to do it. But they did it anyway, because it was the safest and cheapest way to keep everyone's bank accounts intact. Without doing that they would have had a choice, RBS and a few others would have totally failed, and everyone with money in RBS would have lost all of their savings. Which would have destroyed this country and sent a wave of penniless homeless migrants flooding across Europe. Or they could have guaranteed everyone's savings, which I was in favour of at the time. This would have cost the government truly fantastic amounts of money that would have made current government debt look like a pittance.

So now we have bailed out the banks (can we please stop saying we have bailed out the bankers, the people themselves were not in debt and have not asked for our money) we now have to ask what we do with the staff at banks which are partially state owned. The whole point of bailing out the banks was to put in a small amount of money to secure banks in the short term and then get a profit when you sell them off down the line. So we want the board of RBS to act in such a way as to make RBS back into a profitable organisation, which means lending lots of money, which means lending lots of money at high risk. Are they going to do that? Bloody hell are they, the enter nation is yelling at them to put all their money in a big safe with an armed guard and a pack of wolves so none of it can ever be lost ever again. We are sending as a nation totally the wrong messages. Risky lending makes you more money on average than safe lending, we want RBS to make us money to put back into government coffers to pay for schools and hospitals. So then we shout at bankers working in government owned banks for doing exactly what is in our interest.

How should bankers be paid for working in government banks? If I'm thinking of making the taxpayer the most profit, fantastically well. You want the very best people in the world to be running RBS, and you get them with more money than HSBC or the co-op can offer. If I'm thinking of making money and not unbalancing the economy, then I want to pay them well, not megabucks, just well enough to make sure that we aren't left with Dave who did the finance for the Swansea branch of Burgerking in charge of a significant fraction of all public money. If however I'm thinking about politics I want a return to Victorian values of suffering and penitence. That's what really gets the Daily Mail all hot an bothered, a nice bit of suffering, so you make a big show of slashing the bankers money, get rid of the bonuses (because of course it's totally immoral for people to be rewarded for doing their job well), get rid of the pensions that people have been working an entire career to earn. While we're thinking politically, we also need to stop anyone taking risk, we need to get rid of the most profitable parts of the banking industry, we need to remove any mention of abolishing boom and bust from the record, we need to get angry at Fred Goodwin, even after his life has been threatened. We need to talk about putting bankers into Afghanistan to be killed and destroying the banking sector. We need to totally abandon all sense, morality, good economic practice ... and you know what. It still wont win you the election.

(Can you tell I'm in a bit of a mood?)

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