Political Posturing For The Cameras

The politically self-serving vitriol from politicians of all sides continues on Evil Banker today. With Average Man On The Street convinced that every aspect of his current woes are down to overpaid bankers, it provides politicians with the perfect excuse to continue deflecting their attention from the real questions.

Both Brown and Cameron are continuing to spout populist soundbites, for the primary purpose of further exploiting this to their own advantage while pandering to their support base. Of course that is hardly surprising given that this is what 90% of modern politics is all about.

However the reality is that both political parties can sit there making demands of the banks all they like, but they have less leverage when it comes to negotiations than you might think - not least because the country needs successful banks. Additionally the UK government has no actual stake in Barclays and HSBC, they just borrowed funds. And both will happily give them the two fingers and quietly threaten to rebase abroad should there be any sort of meaningful attack on their competitiveness, such as enforcing salary rates.

Even Sir Fred Goodwin, the former CEO of RBS dragged in front of the camera's for some token contrition today, and who made the biggest mistake of all in his ridiculously overpriced takeoever of ABN Amro, had to point out the truth by saying: "..if bankers felt they were not paid enough, they would leave."

And here lies the crux of this particular issue. Bankers salaries are already falling, and falling fast. Banking is a capitalist system that is a hell of a lot more efficient at setting pay levels than the public sector - take a look at politicians and civil servants. Banks are busy laying off thousands of people, most of whom are not rich, just hard working victims like those in other areas of the economy. The banks are cutting back discretionary bonuses now, and new joiner wage packets on thousands more bankers lucky (or good) enough to find work. In short, the industry is busy doing precisely what is being asked of it in terms of reassessing the worth of its workforce.

Interfering with that process by enforcing lower than current market rate salaries for some banks is a ridiculous idea. All it will do is begin an immediate talent drain from those with salary caps, and increase the competitive advantage of the others. Unless this could be imposed at the industry level, which it cannot, this idea of playing up to populist opinion for the cameras will ultimately damage Britain's two weaker banks even more significantly in the long run.

It's like this other meaningless drivel by Gordon Brown that people should waive bonuses. All well and good Gordon, but how about you lead by example? If we work out how much you have cost the country from just a couple of decisions, I'd say you should pay every penny you ever earn on the lecture circuit once we get the chance to boot you out in two years time.

Let's not forget that Gordon sold off a large part of the country's gold reserves 11 years ago, which is estimated to have cost the country over £5bn. His other decision 11 years ago to abolish tax credits on pension funds, bleeding £5bn a year from pensioners, has lead to an appalling funding deficit, with companies being forced to plug that each year from profits - an effective tax - all while the demographics mean ever more pensioners are needing money.

All I can say is, go right ahead Gordon. You can't touch me, and having just written you a £35,000 cheque for capital gains last year, you can fuck right off if you want to try and tax me further. There's plenty of places in the world I can choose to work, and if you don't see net contributors like me as an asset, then you'll soon find out - sadly it will be to the detriment of Old Blighty.