After a month of getting my daily news from French public TV – as bad and as inward looking as anywhere on the planet; it seems to be the stated goal of the public broadcaster too keep the masses as ignorant as possible – I bought three international (German English and American) newspapers today to get a more global view of the world. The story that was topmost in all the newspapers was the demand governments placed on banks that have been bailed out by public money to cut their bonuses to executives.
As can be expected the banking and investment sector are howling in protest, the argument being that the banks will loose their best and most talented people to other companies /countries. And that these talented people must be maintained and very well paid so that they can steer us out of the economic crisis we find ourselves in.
Considering that the people we are talking about are the same people who managed to plunge the world into the biggest economic disaster we have ever seen – I believe we have but started on this downward spiral – the sheer arrogance and lack of contrition of these sectors numbs the mind. For more than ten years banks and investment houses have been slowly and stealthy turning to more and more unsustainable if not downright dishonest business practices. In the short term this gave banks fantastic profits out of which they paid themselves astronomical bonuses, bonuses the bankers began to see as only natural in light of their great talent.
- The highest paid investment manager got almost 4bn USA dollars in 2007 , this confirms something I have always believed about the returns of those investment vehicles for the masses, like the unit trust where you faithfully put your ten cents worth in every month only to discover at the end you hardly made any money. The investment companies always have a thousand excuses don’t they. Well next time you look (actually considering the state of the global economy I suppose this point is mute but anyway for what its worth) at your returns remember the amount 3.7bn per annum for one guy that money has got to come from somewhere, right?
All along these talented individuals knew they were walking a tightrope and they knew it couldn’t last forever. But like the tightrope walker, once on the wire they had to keep moving forward and have faith in the system they built .That all worked just fine until one bank looked down into the abyss, and getting a little fright at what it saw started wobbling on that slender thread that was keeping everybody aloft. As the first bank took the plunge the stability of the system was lost and that was the end of that. Banks around the world were hanging on by a thread (sorry about this but it is too good to let go ;- )). But , as all the banks knew that they were all trading with fresh air, suddenly no bank wanted to trade with another bank knowing full well how fanciful all their balance sheets were. So there they were, dangling above the chasm with not a safety net in sight.
Okay I think I have worked that metaphor as far as it will go, time to move on.
With the collapse of trust in the banking sector the whole gravy train came to a very sudden and messy halt. They all knew you cannot make money from nothing no matter how artistically you arrange those figures on your balance sheet. But gluttony ruled the day and while they continued to drink champagne, governments were forced to intervene and to try to clean up the rather extravert mess the banks had made of the global economy. Not because the governments felt sorry for the banks but in order that all our bank accounts were not suddenly frozen like those of the poor people in Iceland. So governments used our money, that’s right, your and my public money to bail out the bankers and keep the banks open so that our private money was not swallowed into the gluttonous maw of the bankers.
And here is the sickening irony of it all. The bankers are now slowly forcing the entire world economy to a stop by refusing to loan our money back to us; this due to the lack of trust in the economy that they (the bankers) created.
These exceptionally talented individuals are now having a little hissy fit because they are required, not too forgo their bonuses, but just to cut back a tiny bit so the masses –that would be you and me – don’t get upset when we see our tax money being used to fuel some highly talented individuals jaguar while we stand in a queue to collect the dole because we have lost our jobs. That we don’t revolt at the fact that they go on skiing holiday while we pack our worldly possessions as the banks have repossessed our home. So that we don’t send out a lynching squad because they still eat caviar while a pensioner eats cat food because his entire lifesavings have been wiped out by unscrupulous bankers.
While all this is going on it must not be forgotten that there was nothing wrong with the world …well no more than usual. There are no more wars than normal, no great floods, droughts, rampant deceases hell didn’t freeze the sky didn’t fall. The world and all the normal folk on it were going about their business quite happily oblivious to the fact that a few greedy people were about to destroy their lives. Considering this cost and the cost this mess will continue to exact against the normal people of the world I think a more appropriate response to the bankers responsible would be not a little cut in their bonuses but a charge of crimes against humanity.