When I heard that the City bonuses are going to amount to £7 billion this morning, I sincerely wished that someone somewhere would start a revolution

[nameymcnamechange]

Coming as it does after yesterday's Child Benefit announcement, I am beginning to feel positively anarchic.

I think there should be a General Strike over this, or at least a protest march in London.

flight
It would be a good notion but how could you possibly tell New York or japan what they can cap their bonuses at.
Because they won't change emplyers, the banks will just locate somewhere else

"Do you really want the Government to be allowed to step in and tear up employment contracts if the public has some fuzzy feeling that it's "just not right"?

Almost. I have no idea what powers the Government has in this respect. Apparently Boris has been more or less appealing to the decision-makers' "better natures" and asking them not to be so profligate. Ha ha.

ole banking sector wouldn't have to move. a few of the main payers just have to duck out of the london market and suddenly london has no status anymore

Could we not have an international agreement, Paggy? We've done it on other issues.

"But to AGAIN put all our hopes on a totally fucked up system is LUNACY

Definition of lunacy is doing the same thing over and over again and expecting a different result

The banks will BUST us again. It doesn't work. Stop blindly supporting them."

Right now we've got ourselves into a position where they're pretty much the only game in town.

Yes that's stupid, yes we shouldn't have done it and yes we need to change things but right now when we're in the trouble that we're in sticking boot into the industry that's providing 10% of our GDP (compared to less than half of that in Germany or France) is also going to be incredibly stupid.

It's even more stupid when the same flexibility of location that allowed us to draw them here is the same thing that will see them go if things get too hard for them here.

And to go sticking that boot in, threatening 10% of our GDP just because of some vague sense of morale outrage?

Even more stupid.

Yes we should diversify, I'll go further than that we've got to diversify, but to do that we need to get out of the hole that we're in and right now the one industry that shows signs of doing that is the one thing we don't want to put in danger.

"Could we not have an international agreement, Paggy? We've done it on other issues."

Why would other countries want to do that?

We only want to do it out of some misguided sense of "revenge" and wanting to lash out.

I am not doubting that it would be a good idea but I cannot see many countries who believe in free enterprise and rely on their money markets for status and profit, agreeing.
I can see a euro wide agreement, or between usa and uk ( only just) but everyone... and it would have to be everyone or suddenly Latvia would become the financial capital of the world

I think international agreements work over issues of health or security. Not sure about free market restrictions.

The 10% GDP they are making is really only a back payment on what they have cost the government - the taxpayers

Therefore, they should have NO bonuses. On the standards that the government set themselves - "there is no money. Sorry that's right. All that money that we had to bail you out/chaos in the economy you caused, needs to be repaid, so there is NO MONEY for your 6 figure bonuses"

Tough, but fair, right?

Interesting how the 'tough but fair' argument is only reserved for some segments of society, don't you think?

If you are 'tough but fair', then do it universally

We know the banking system doesn't work. History has repeatedly shown us that anything they bring in to the country is always wiped out when the crash comes. They earn us NOTHING cumulatively, and never have. All they do is line the pockets of the lucky few who gamble the money.

Just to clarify - this is not a VAGUE SENSE OF MORAL OUTRAGE

Check the figures. The banks earn us nothing.

The 10% GDP you quote is wildly misleading

"the banks earn us nothing"
Right. So they're not paying tax at all then?

And what about Barclays and HSBC? They didn't take any money from the Government. Should their bonuses be capped as well?

Therefore, they should have NO bonuses. On the standards that the government set themselves - 'there is no money. Sorry that's right. All that money that we had to bail you out/chaos in the economy you caused, needs to be repaid, so there is NO MONEY for your 6 figure bonuses'

But the banks currently do have money and they are currently making money.

So you want the Government to be able to change the terms of a financial deal that they made with them and demand money back now?

Or you want the Government to be able to say to someone "I know that that's your money but we're going to tell you how to spend it".

Both set really bad precedents for Government interference.

And both are exactly the sort of things that will drive the financial services sector overseas.

"Interesting how the 'tough but fair' argument is only reserved for some segments of society"

It's reserved for those who need money from someone who doesn't have money.

The Government has a huge shortfall in it's income compared to it's spending, and that's why it needs to make cuts.

Other industries have seen massive slumps in profits or are even making losses, and that's why they're making cuts.

"We know the banking system doesn't work. History has repeatedly shown us that anything they bring in to the country is always wiped out when the crash comes. They earn us NOTHING cumulatively, and never have. All they do is line the pockets of the lucky few who gamble the money."

I actually agree with you.

However right now we desperately need the money they generate for the Government. But we should make sure that by the time of the next crash, and as you say there will be a next crash, this country isn't just a one trick pony and can afford to let the banks go to the wall.

Pagwatch - the US have already brought in financial service reform, so NY isn't a better prospect, is it?

I just feel that far too often there's this doom-mongering coming from inside the Financial Services sector about the necessity of 'maintaining status' and how FS is 'propping up the economy' and actually it's not really rooted in securely evidenced argument. Who are these mystical and all-powerful 'main players'? Why does the success of the London economy rest on us placating them with financial freedoms so that they stay put? Give me some proper evidence - the repeated soundbites aren't doing it for me.

Flightattendant

So you want a blanket cap on bonuses? Just on bankers.

So it ok for some public sector workers who get generous final salary pensions and get six figure salaries to get bonuses. However, when a private company not supported by the state at all (the majority of financial companies) want to pay its top performers what it sees fit you have a problem.

Doing you also have a problem with an idiot like Cheryl Cole getting paid millions or her equally dumb ex-husband footballer?

Sorry but I think you are missing the point of a free society. We have taxation and regulation. Arbitary caps on pay on certain sections of society is a slipperty slope ...

This is going to be a long post - but for those interested, please read

A book by a guy called Nicholas Nassim Taleb - THe Black Swan was written before the banking crisis of 2008. David Cameron is apparently a fan, but I can't see how this is transpiring ( i.e. he keeps supporting the banks blindly and also simply blames the Labour government for the collapse). Anyway, just some quotes below to give you an idea of the very dangerous game we are playing AGAIN with the banks

I wish my company did make a profit so they could pay the bonus - but for the last 5 years not had any.

Its a free market if banks make money then that's good - it IS an issue though if the way they make the money causes an issue but fundementally we need companies that make a profit to pay taxes and the like - governments do not make money in themselves!

Comapnies should also be made to pay up all corporation tax etc - in this case if the banks didn't pay out a bonuis they could ofer employees shares and then pay out a big divi - same difference except then 2nd way there is actaully less tax collected.

We're all in this together! Unless you're a banker of course.

I went to university with s/o who is in the city (derivatives so pretty much responsible for the hole we're in), 6 figure bonuses and pays no income tax :)

As DC sais this morning, we really need our financial services, indeed imagine the state we'd be in without them.

I think what nameymcnamechange has put her finger on, though, is that we are looking at global capital v. national locations, and the effects of the disjunction between the two.

So, here on the ground, the majority of us are squeeeezed, with benefits cut, both the individual ones and the more abstract ones that are materialised in the public goods, of healthcare, schools, and so on.

Up there, international capital expaaaands, gets fatter.

Clearly, there are intersections, mainly through the geographical locations of where those employed to service (and I do mean that in the sense of feeding, and giving bjs to,) global capital actually "home" themselves, ie, spend their wages, pay their taxes.

One way that intersection becomes materialised is hugely negative, as large bonuses are paid to the lap-dancers of global capitalism, at the precise moment that those also sharing a geographical locale are seeing their national public space/goods asset-stripped, and, in real terms, their standard of living go down.

Hence nameymcnamechange's ideas about the French Revolution.

Of course the problem there is that such revolutions have historically been nationally based, which is not necessarily the perfect solution when faced with the disparities caused by global capitalism.

But there again, capitalism has to be materialised somewhere, in some material bodies, and some material locations, and those are necessarily limited, and not nearly as global as the propaganda would have us believe.

I am not doom mongering. I am just explaining my view.

I won't back it up with any evidence because I am just chatting based on my experience and opinions. I have no thesis to hand

I have already said that DH would not leave the Uk ( he is NOT a banker btw), because he would not disrupt the children and he would not want to sack his staff.
But he could easiliy do it, and whilst not in the bankers league, his leaving would cost the country.

I am happy to pay tax, I would be happy to pay more if it helped social equality. But I know lots of Dhs peers who have no such concerns. Thats all

What upsets me is that we are held to ransom by banking because of the constant threat that "they'll go elsewhere, so we'll be buggered".
Now I hold my hands up and say that I know nothing about the banking sector, the income it generates etc. But I do know that the finanacial crisis we are in was caused by reckless behaviour from the banks. However we now can't touch them.

So, instead the rest of the population who clearly can't "bugger off elsewhere" has to pay. I'm a public sector worker who is now terrified that I will loose my job because the gov has decided that I am the target for all the cuts required.
The most vulnerable members of society are being told that they have to tighten their belts as we have a huge deficit and something needs to be done. Cap benefit, re-assess all on disability allowances causing untold stress (I know my mum has been through it), end CB for single parents earning £44k but who spend half their income of childcare so they can work, freeze public sector pay, increase VAT and on and on and on.

Surely we are allowed to be absolutely furious when we hear that seven figure bonuses are still allowed to happen????????

Btw - I should say sorry about the whole "lap-dancers" imagery. It's a bit off, really. I did it just to sort of displace the whole "masters of the universe" rhetoric.

But it was a bit off, on many fronts.

Sometimes my "ironic" enzymes get the better of me.

If the banks that are now owned by the gov't are paying out big bonuses then yes you can be furious (they should be re-paying nay debt first with interest) - if they are private banks or other Companies paying out bonuses then no.

Sebastian Faulks commented on bankers/banking system in his chat for 'book club'. It seems to me he says if you become an investment banker you basically become a gambler who becomes steadily richer when you win and if you lose it's the public who lose out and suffer not you? Why didn't I pay more attention in maths at school!?

Is it true that Brown understood so little about the economy etc? Is banking all a 'con trick'?

The book came out in September 2009. I began reseraching in about 2005. I wanted it to be bang up to the minute but things in the finanical world moved very fast. It was at first meant to be about the boom, but then everything went bust and I decided to set it in Dec 2007 which was the last time any half sane person could still think the boom would carry on. I didn?t know much about finance, but I was aware that investment bankers neither banked nor invested. They just gambled.

The utter uselessness of most of what they do cannot be overstated. It is a tragedy that they conned Blair, Brown and so on into thinking they were admirable, to extent that poor Brown said when he opened Lehman Bothers London office, ?What you have done for the City of London I hope to do for the British economy.?
And he did. He bankrupted it.

Bankers like to pretend that mere mortals can?t understand what they do. That is how they maintian the mystique. But most of it is very easy to understand. They gamble. They keep the winnings with minimal tax and if they lose you and I and Mrs Bloggs with her small savings pick up the tab. Not good. It is the greatest con trick ever perpetrated on the British public.

I

Absolutely Cortina

The whole thing is a CON

This £1bn being 'saved' by pissing around with the CB system because 'of the mess we have got in' (FFS!) is simply deluded.

Badgers is a perfect example of someone who has fallen for all the tricks about "moving talent away" "the engine of the economy" "will collapse if they are treated like everyone else"

Tis all big hairy bollocks

The banks were the major cause of the economic crisis (sub-prime market etc etc) and at the time were giving themselves big bonuses for taking major risks with all the money. Now, public sector workers take the fall-out of their greed whilst the bankers give themselves big bonuses for not taking risks with the money (anyone hear the story of the guy who wanted to borrow £2m from the banks for his business to match the £2m he already had. He was told that if he gave the bank £2m as security, they would lend him £2m ).

There's something not right somewhere. As the saying goes though, "shit floats".

LadyBlahBlah

You quote Taleb. However I asssume you do understand trhat he runs a number of funds that specialize in making money of out these so called "Balck Swan" events. Therefore he has a vested interest in pushing the idea that these events will occur and therefore evewrybody needs to buy his fund to protects themselves against it!

I also note he complains about JPMorgan ... yet that bank never made a loss throughout the whole credit crunch. Clearly they were doing somethng right!