“Good for bankers”? Are you sure, Vince?
It was somewhat disappointing to receive yesterday’s post-pre-budget report response from Vince Cable. As impressively prompt as it was, I couldn’t help suspect that the title and opening line were written before the increasingly-destructive Mr Darling had even uttered a word.
“Good for bankers but bad for taxpayers”
So shouted Vince’s headline, seemingly implying that the former is not included in the latter. An odd response, really. Those of us who live and work relatively near the City aren’t hearing much cheering. Rather, word on the street is how this disastrous PBR will harm everyone, but particularly bankers.
The absurdly populist destruction of Darling’s PBR is to be expected from Labour. The anti-bonus measures portend all manner of unintended consequences (or at least I assume they’re unintended) and smack of unfairness. As explained in today’s City AM, a commodities trader at a hedge fund will receive unaffected bonuses, while a commodities trader at a bank will be hammered – causing the bank to restructure its payment system, fiddle its accounts, or risk losing talent to hedge funds and similar groups. Or, of course, they can just move their people to Dublin, or further afield. But never mind all that because “bankers’ bonuses caused the financial crisis”. Right?
Wrong, of course, but let’s move on: the budget is appallingly bad for the rest of us folk who work considerably less hours than bankers and are thus less reviled. The usual surreptitious hiking of NI further increases the burden of income tax, while our unprecedented deficit of £178bn is well reported. According to Darling it’ll all be ok because the economy will grow by at least 3.5% the year after next. Sure it will.
But the point here is that there’s ample scope for attack from a good Liberal like Vince–without resorting to populist attacks on a minority of the workforce. Sure, banker bashing may win votes, may be popular among the greater mass of voters, but that doesn’t make it right. And call me sanctimonious, but we’re supposed to be above all that. As Cicero rightly bemoaned the other day, we mustn’t become just another party. Sadly Vince’s missive, or at least its headline message, present us as just that.
December 10th, 2009 at 1:10 pm
Thing is the floating votes don’t care – we can become as high-minded as you like by pointing out the differences between one set of bankers and another. Been down that route – the people we need to swing to us respond to easier messages and I thought Vince hit it spot on. I do polling each week – people are really liking Vince and he is boosting our vote.
December 10th, 2009 at 2:44 pm
As good liberals we /should/ oppose all the government’s pandering to their fellow members of the political classes (the bankers).
The whole banking system rests upon government patronage at the expense of productive workers.
The vulgar libertarian and neo-liberal knee-jerk response to defend bankers as if they are somehow the embodyment of the free market is deeply damaging and flat out wrong.
At least political bashing of bankers is honestly statist rather than the neo-liberal covert statism which masquerades as freedom.
December 10th, 2009 at 4:19 pm
But Tristan, it’s unfair to create some mass collective of people known as “bankers”. There are rent-seeking corporatists within banking, sure, and I’m not defending the collusion that those individuals are involved in with the state. Neither am I defending anything the state may do, as a shareholder, with RBS and all the bailout recipients. But an individual, who works in banking, deserves sticking up for in the face of discriminatory taxation – just as they would if they were a plumber, or a musician. Especially as most of these people are not responsible for the cosying up to government, or anything political.
I haven’t suggested, ever, that banking, or bankers, are “the embodyment of the free market” (in fact, I’ve argued that banking is nothing like a free market). This is basically a case of two wrongs not making a right.
December 10th, 2009 at 7:07 pm
“Neither am I defending anything the state may do, as a shareholder, with RBS and all the bailout recipients.”
Sorry, that should say “condemning”, not “defending”.
December 11th, 2009 at 3:51 pm
An excellent post. Of course bank bonuses are not blame for the recession and pandering to populist calls from the banker lynching mob is short-sighted and counterproductive.
Bailed-out banks are currently faced with unprecedented risks of moral hazard, which goes far beyond anything even the most lax bonus structures would have allowed. Private profit is currently offset by public liability. This is the issue that needs to be addressed imminently, and not by taxing employees of the banks.
December 11th, 2009 at 4:08 pm
hey Julian good uck on FTL next week
Please don’t miss this opportunity as I had remind Mark Edge more then once to book in