Sunday, February 8, 2009

Taxpayer pays in, bankers take out

We have to put a stop to this madness. While the taxpayer are injecting money into failing banks, the bankers are simultaneously extracting this cash in bonus payments.

THE board of Lloyds Banking Group, which is 43%-owned by the government, is prepared to inflame the growing row over City bonuses. It is ready to accept share-based rewards for the last financial year, a period which has seen its share price fall by 75% and just weeks after the bank received a £5.5 billion cash injection.

The size of the Lloyds bonuses will be determined by Wolfgang Berndt, chairman of the bank’s remuneration committee. Daniels is entitled to a maximum bonus of 225% of his basic salary of £960,000. His other 11 directors are entitled to 200% of their salaries.


Although we rarely acknowledge it, our political system is based on some implicit understandings about fairness and equity. We look after each other when we get sick through the NHS. When times are tough, we make sure no one actually starves because we have a comprehensive system of welfare payments. Everyone gets educated, inoculated, and pensioned off when they reach 65.

This system does not guarantee a fair and equal society, but it does ensure a reasonably civilized way of life. While many people take advantage of society's generosity, those abuses have always been limited and tolerable.

Certainly, we deeply dislike paying for this system through taxes. Nevertheless, virtually all of us agree that we prefer what we have to a less compassionate system, where everyone fends for themselves. To put it more bluntly, we Brits don't do "dog eat dog". We do "dog reluctantly helps dog".

However, this system can not survive when ordinary people watch helplessly as rich greedy bankers ransack our government's treasury. We will ask the entirely reasonable question, why should we pay for these bonuses to the same people who wrecked our economy?

These government financed bonuses undermine the legitimacy of our tax and benefits system. Why should we continue to pay taxes when these resources are so wantonly misused. Why should we support our political system when it has been so comprehensively captured by a narrow clique of financiers. Why should we bail out Lloyds, preventing it from going bankrupt, only to see our money disappear into the pockets of wealthy bankers.

New Labour should not misjudge the mood of the British people on this issue. If it fails to act, and prevent these abuses, it will face a furious wrath at the next election.

18 comments:

  1. Pay them bonuses by all means, but perhaps pay them in bonds linked to their activities. Give them a bonus paid out say in a parcel of CDO's - which they can't sell for a few years. If the value of them falls in the meantime, that's just tough.

    In fact, why not pay them their entire salary in something like CDO's. Let them eat what they pushed.

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  2. If you plan to express your displeasure at the ballot box you're wasting your time.

    What is required is tens of thousands of people in the street (not violent but peaceful) physically demonstrating their manifest power before those who actually work for them.

    It needs the metaphoric equivalent of the Chinese student standing before the tanks in Tianamen Square.

    Cheers, Haggis

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  3. I think we all know that the Labour Party have had it at the next election. Add to this fact the Tory plans to remove 60 constituencies and quite frankly it is hard to imagine the Labour Party returning to power for a generation (15-20 years?). So - Labour might as well do whatever they want. Make lots of rich friends in the City, they're going to need them in the wilderness years ahead.

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  4. > why should we pay for these bonuses to the same people who wrecked our economy?

    Because they didn't! The people who wrecked the economy were the people who regulated the credit bubble into existence. Not the banks who allocated the credit. The banks managed to keep the economy "going" years longer than it would have without them (may not be good).

    Theses bankers still shouldn't get a bonus, as they have not out-performed their competition.

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  5. Let's have more confidence in capitalism.

    A few get rich and the rest of us gets screwed.

    For uncensored news please bookmark:

    www.wsws.org

    Rambo

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  6. Don't pay, let them wallow in their greed. It will work itself out

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  7. You're wrong about this one. Taxpayers are not paying in. If they were, governments wouldn't be having to print money and take out massive loans. The truth of the matter is that no one is paying these bills, we're all just relying on the money fairies to show up and wave their magic wands.

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  8. Puts a whole new meaning on paying your bills at your local cashpoint.

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  9. I have an increasing amnount of synmpathy with the idea of not bailing the banks out, but having adminsitrators run them down.

    Its an option we hear too little about.

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  10. It WILL face a furious reaction at the next general election and then be replaced by the Tories who will carry on just the same.

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  11. Thanks [Armageddon Thru To You] for reminding us why so many are turned off by religion..

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  12. Thanks [Armageddon Thru To You] for reminding us why so many are turned off by religion..

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  13. Armageddon to you, thanks, buddy for making all Christians look like complete nutters. Thanks!

    Now, to the point at hand- the same bs is going on here. A Congressperson and the treasury secretary had to propose a law to stop bonuses to greedy fools who could not figure it was they who ruined things.

    And in the States, our social network is much weaker and not as comprehensive as yours, so we realy don't have a sense of shared sacrifice. I hope that shared of sense sacrifice for a civil society really leads changes in the banking system.

    Here, in the States, it only took about 230 years for us to realise we MUST help each other, and the gluttonous greed must stop. Not ambition nor hard work nor sucess- but just gluttonous greed.

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  14. I grew up in a Christian household, and even I scrolled through all that! Way to put your point across - not!

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  15. New Labour should not misjudge the mood of the British people on this issue. If it fails to act, and prevent these abuses, it will face a furious wrath at the next election.

    The British People can vote all it likes - The problem is that all that voting will just replace one bunch of inbred tossers with yet another that will carry on exactly where the last lot left off!

    Next we will be off to demonstrate in the designated free speech area ...

    Real change for people on the ground will not be allowed in NeuRopa!!

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  16. Anon, The British People can vote all it likes - The problem is that all that voting will just replace one bunch of inbred tossers with yet another that will carry on exactly where the last lot left off!

    I think you miss the point. The politicians are drawn from the same culture the rest of us inhabit. We are all marinated in the concept of getting what you want without earning it. Whether that's children growing up without fathers because we want sex without the commitment of marriage or lots of money from the government without paying taxes, it's all the same.

    To quote the old Pogo line, we have met the enemy and he is us.

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  17. "virtually all of us agree that we prefer what we have to a less compassionate system, where everyone fends for themselves"

    Put me down as the one who makes the word "virtually" necessary. This type of socialisation is what ruins countries and makes them so unjust by stealing from the productive to give to the incompetent and lazy. "From each according to ability to each according to need" is the most evil and destructive creed ever practiced in the economy due to it's inevitable consequence of totalitarianism, theft, and squalor.

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