Compensation Tube-erculosis

I think my journey into the City this morning was divine retribution for last Monday. Ah, that wonderful snow and slacking off, it was such a delight. All manner of Tube lines had problems today, with the requisite passengers falling ill, and in my case a woman going into labour at Holborn station.

Am I the only person to question what is wrong with the British 'stiff upper lip' in these circumstances? It is one thing to show steely resolve to pull through a situation like the Blitz. It is quite another to accept crap public services as the norm and without raising sufficient uproar and objections.

As L commented to me on the way in this morning (aside from asking when we are going to make good our escape to the countryside), is that if this had been anywhere else in the world, senior management would be flooded with complaints. Expectations would be such that they took action to improve service. However Transport for London is a woeful public sector institution, which revels in a monopoly position, and appears to learn nothing from its continual failures.

What most rankles many people are the Tube drivers. Not many such unskilled jobs have a huge waiting list to become one, which says immediately that something is wrong. It's a bit like why there were queues of illegal immigrants and an entire camp at Sangatte in France set-up to help them make their way across the Channel to the UK.

In the case of Tube drivers, that waiting list is because of the abuse of power by that socialist dinosaur Bob Crow, leader of the RMT union. I think unions frequently serve as an important counterbalance to big business, and fighting to ensure employee rights are upheld (and increased to appropriate levels in the past). However as the 1970's proved, that balance can be abused both ways, and Crow is an absolute disgrace.

Rather than acting in the best interests of we the people of London, Bob Crow shamelessly cites health and safety concerns for all manner of initiatives, many quite reasonable (such as improving the efficiency of the system which, shockingly, might lead to some job cuts), and holds the people of London to ransom at regular intervals with strikes - usually to ensure completely undeserved, over-inflation pay rises for his leeching, overpaid members. As with Norman Tebbit back in the 1980's, this is one particular union that needs to be faced down - the problem here is that London cannot function without its public transport, so would lose billions. Instead the problem perpetuates, and drivers steadily get more overpaid.

There is no doubt that anybody who pushes a lever back and forth to speed up and slow down a train, (oh and stops at red signals if we're lucky), is amongst the least skilled in the workforce. Nor do they work long hours. So how they deserve to be paid twice that of a hard working nurse is beyond me. Bear in mind this is public money, which is what makes it so outrageous.

The irony of a banker criticising such modest earnings is not lost on me, and is quite deliberate. I am, however, pointing out a truth - that the whole system of public sector remuneration needs immediate reform and to be shaken up every bit as much as banking.

On that note, the public reaction to investment banking continues to be highly entertaining. It is in part a knee-jerk reaction from many, who are simplistically assigning blame based on what they have heard in the press. Many do not really understand the large numbers of different groups, people and other factors globally over a long time period that has fuelled the situation we are now in. Do they even understand the role of China in all this? Instead, better to latch onto a fashionable, pantomime villain known as 'Evil Banker'. That is helped because governments are busy laying into us as well, and as usual with politicians, that is not to better inform the public but to deflect attention from their own gross failings - in this case with regards to previous spending and regulating the financial and housing sectors.

Just take a look at this article from the Motley Fool today. I don't normally read it, but some of the vehement responses from its readers illustrate what I am talking about. Pious, righteous indignation without a willingness to take on board anything from the article. It reminds me of the bizarre, national lynch mob hysteria fueled by the Daily Mail surrounding Jonathan Ross and Russell Brand a few months ago.

One interesting fact never noted by such people is that none of the senior bankers on the boards of any of the major banks have taken any bonuses this year.

I suspect many do not even know that, but it all started from something called 'Lloyd Watch', back at the end of last year. The entire industry was closely watching for the decision by Lloyd Blankfein, CEO of Goldman Sachs and the most successful bank. The board decided that on principal none of them should take a bonus that year despite the bank still making profits. A commendable attitude, but it does not mean that key people within GS will not receive large bonuses.
The justification of bonuses needing to be paid by the writer of the above article is largely that due to banking being a capitalist and highly competitive sector, should a bank lose its best performers it is like a football team underpaying its star players compared to the market rates and watching them walk. You might save £10m for the first couple of years, but quickly will find yourself relegated and losing vastly more for being so short-sighted.

This is not really a defence but more an explanation of why the part-nationalised banks are so desperate to pay bonuses now, and others are looking to pay back government money. In the end, when you put this crisis into perspective, it will pass and the banks need to retain their top talent. That means educated, experienced, hard working staff, prepared to do more than push a lever back and forth for a living.