Saturday, 16 January 2010

Obama: "Give Us Our Money Back" Boris: "Pity the Bankers"

This week, President Obama announced a fee aimed at the bailed out banks.

He says,
"My commitment is to recover every single dime the American people are owed. And my determination to achieve this goal is only heightened when I see reports of massive profits and obscene bonuses at some of the very firms who owe their continued existence to the American people...We want our money back, and we're going to get it."

Meanwhile, across the pond, London Mayor Boris Johnson has been waxing indignant about the poor oppresed bankers, who are faced with a Banker's windfall tax aimed at similarly recovering some of the costs to the public of the British Governments' own intervention in the market. The floppy haired one weeps that,
Around 9,000 bankers may leave the City following a tax on bonuses over £25,000
Oh dear. The horror.

In fact, of course, it is not a frivolous question to ask how a tax on bonuses would effect the economy of London. But there's little factual basis for the notion of a general exodus. In fact, as the campaign group Compass points out, JP Morgan has just announced a record set of profits accompanied by a 21% jump in pay for its staff. It hardly seems that these folks are likely to tearfully pack their possessions into polka dotted handkerchiefs and board ships to a Better World.

UK and US governments took emergency efforts to rescue the world from the catastrophically poor work of their bankers. I understand the reasons why this became necessary - and yes, the financial system is important in propping up the general economy.

But I'm by no means convinced that the people who move money around in clever but confusing ways add more real value to the economy than people who, you know, build stuff. Frankly, it might be no bad thing if the Bright Young Things who have been fleeing to the City (and to Wall Street) in droves were drawn away to do something more productive. And if the folks running the banks cared a little less about enhancing their own bonuses and a little more about, say, avoiding catastrophic market failures.

Priorities, Boris, eh?

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