| Topic: | Re:Re:Re:Re:Bashing the bankers? | |
| Posted by: | Richard Carter | |
| Date/Time: | 10/12/09 10:21:00 |
| Oh, there's no disconnect for me between a big disagreement and a good-natured debate, John, I'm sure we can have both. On the question of greedy swine or 'just capitalism,' I can see the point of it is to make a profit, but what we've seen in recent times is a huge growth in the pay of the few, which has led to an enormous disparity in companies between the earnings of people at the top and the workforce. Wilkinson and Pickett's very interesting book The Spirit Level demonstrates very effectively that the more unequal societies are, the greater are their levels of poor health and social problems. I think there are two problems here: the very high level of payments that bankers (but not only them) have received, and the particular issue of bonuses. But whatever, how can it be justified for people to earn more than, say, the Prime Minister? After you've got, say, £150,000 in your pay, what does the extra £150,000 or £500,000 benefit you? How is it possible to justify being paid millions of pounds (and this applies not just to bankers but to, for example, footballers or pop 'musicians')? The answer? To tax these people heavily and progressively, whatever branch of crookery they're in. Some are whingeing because they will have to pay as much (wow!) as 50 per cent on their "earnings" and are :"threatening" to go abroad (sadly, the story that Tracey Emin was going to emigrate because she'd have to pay a bit more, turns out not to be true). Personally, I'd levy startling levels of tax on higher earnings: say 50 per cent from £100,000, rising gradually to 95 or even 100 per cent on earnings over £200,000. Then we'll see… And you seem to be blaming not just the people who gave loans that could never be afforded to be paid back (and it wasn't just American banks but our very own Northern Rock, amongst others) but those who accepted them. Sure, it's irresponsible to borrow money you can't afford to pay back, but there's a difference between the individual's choice over this and the way the banks went out actively to sell such loans. And I don't think we've even seen the half of it yet, as the problems of Dubai (next: Greece? Ukraine? There's already a queue forming). And you're quite wrong that the idea of separating casino activities from proper banking 'wouldn't last a week,' because it was the norm for almost 70 years in the USA under the Glass–Steagall Acts, until the Republican ideologues in the US Senate scrapped them in 1999, one of the most foolish decisions that even that body has managed to perpetrate. And yes, economic activity is cyclical ("No more boom and bust?" As if….), but one of the "benefits" of globalisation has been that the whole thing has run utterly out of control, and because of the way the financial system is completely interlinked, we all suffer from the banks having got their risk estimates wrong, largely, I suspect, because they have been using mathematical models to estimate risk but simply haven't understood the limits of the models or the nature of the things they are selling. |