“In the past few years, the greed and conspicuous consumption has just got worse and worse” says a city trader today, who doesn’t believe he was worth his 2m plus bonus.
So. I suggest that for those bankers out there who took more than their fair share, the answer is simple. GIVE THE MONEY BACK.
YOU’VE TAKEN TOO MUCH.
Did you know for example that 600 employees of Lehman Brother’s, those same employees who bankrupted their own bank because of their own greed ARE SET TO GET THE BIGGEST BONUSES THIS YEAR??? Because Nomura has agreed to pay them the equivalent of their 2007 bonus for two years. It actually makes me feel sick.
It is just pure unadulterated greed. The world has gone mad. Lets get some perspective here.
Dusty Spider
October 20, 2008I’m with you. It makes me sick too. I think the millionaire entrepeneurs should be putting some millions back into the economy too. They were quick enough to take advantage when things were good! Flick x
Dumdad
October 20, 2008Of course, it’s madness. But you can bet your life that the politicians will turn round to the ordinary people like thee and me (okay, you’re not ordinary but you know what I mean) and pontificate along the lines of “we must all tighten our belts, time to make financial sacrifices etc etc.” It’s horseshit. Gordon Brown and his ilk (and the Tories) will never, ever worry about how they’re going to pay their bills.
Ernest de Cugnac
October 20, 2008Well yes, but it’s quite like that. And I’m not a banker.
The reason they got their bonusses is because they have skills that are in short supply. Skills that will reap their employer bigger returns than their bonusses. There is no law of antigravity that says markets can only go up. Sideways and down are directions too, and both get taken.
So the fact that banks have lost money right now is part of the cycle – and also in large measure thanks to liberal governments who insist that mortgages are made available to people who the bankers know are poor risks.
If individual employees want to give money to charity, then they should.
But the reason they are paid vast amounts of money is not greed or stupidity. It is because the supply of people who can do what they do is vastly less than the demand. It really is that simple.
family affairs
October 20, 2008No, I agree Dumdad, GB and crew aren’t having sleepless nights over how they are going to pay their mortgage, I’m quite sure.
Ernest, I completely accept what your saying and I do believe that there are a lot of incredibly skilled people out there – but I have a real problem with how much money they paid themselves. It’s the same with footballers – presumably you would argue that the reason they are paid so much is that they are so good at what they do and of course the demand is there and people are happy to see them paid ridiculous amounts of money because of the pleasure they get out of the game….but what about the doctors, nurses, teachers? They’re more skilled by far in my opinion than somebody who gambles other people’s money on the stockmarket for a living and what about mid-wives? There are not nearly enough of them around and they get paid nothing – so it’s not simply a matter of supply and demand, surely Lx
reluctantmemsahib
October 20, 2008it’s nuts. i agree. all nuts.
Ernest de Cugnac
October 21, 2008hi fa – thanks for your reasoned response.
You are exactly right about footballers. They are in very short supply, relative to the population, so they get paid loads. The competition here is between clubs themselves, and if they get it wrong they will go broke, and salaries will tumble.
If commercial managers pay themselves too much, then it is a sign that corporate governance has failed. That is a signal for shareholders to replace the board, and mechanisms for doing that do exist.
It’s true that you will see CEOs of failed banks leaving with huge serverance cheques, but that is because they have contracts and unless and until civil law is suspended (which is not good for any of us) those contracts have to be honoured.
You make a good point about skilled nurses and midwives being paid nothing, but sadly this is a question of supply and demand. Despite the poor pay, people still queue up to do those jobs; nursing anyway.
Where you get genuine anomalies (I take your word for the midwife supply/demand problem) then that is a problem caused by a heavy and unresponsive state system and the terrible lags that result. You can be short midwives in such a system, but since you and I are not in a position to bid up their wages (civil servants do that) the undersupply will remain until they choose to do something about it.
Many people don’t like the idea of a free market, but it is only in free markets that the balance is fairly quickly achieved. And we really don’t have free markets because of the heavy hand of the state.
Sorry to twitter on. Take the whole housing nightmare. We all know that they cost far too much and we all live in terror of our wealth evaporating when the bubble bursts. But it is the state that for decades has choked off supply (you simply can’t sell your land to whom you want, for whatever legal purpose they wish to put it to), leading to staggering demand-fuelled inflation.
Bush Mummy
October 21, 2008Is that really true? I feel quite cross now. Read my mate Gav’s post on my blog.. he reckons cancer doctors and nurses should get the salaries, and I reckon he’s onto something there.
Grrrr.
BM x
family affairs
October 21, 2008Point taken Ernest. I guess it’s just a personal thing – I don’t feel supply and demand should justify the gross diversity of financial reward. I have just read Bush mummy’s blog and the very emotional email her friend Gavin has written post op. I still won’t ever accept that bankers (and lets throw estate agents in there too) deserve to receive quite so much more than the people in the medical profession who spend 7 years plus working towards saving the rest of us. Lx
Bush Mummy
October 22, 2008Hear hear.. or should that be here here? Hmmmm..
BM x