From London's neediest curse City bonuses, January 18, 2011:
The fact that some of Britain's biggest banks have been bailed out by the taxpayer is not stopping them from giving their employees bumper bonuses.
It is a decision in defiance of political and public pressure to curb the payouts, amid the severe cuts being made elsewhere across the economy.
In today's austerity Britain the homeless and needy queue up for food handouts from charities across the UK and in London, where just a few miles away it is a different world, with different rules.
Prime Minister David Cameron has shied away from regulating bankers' bonuses. They might have to be a bit more open about them, but pay will not be curbed and there will be no windfall tax.
Bob Diamond, Chief Executive at Barclays made his feelings clear: "There was a period of remorse and apology for banks. I think that period needs to be over."
And bankers have taken that to heart. UK banks, including some of those bailed out by taxpayers last year, will be paying out $11 billion to their staff this year. On the streets where the needy live literally from hand to mouth, that is going down badly.
If these guys are doing such a hot job, why do their banks need government money to bail them out?
If you want to let the free market define compensation, then let the free market define what happens to the banks when they made bad decisions.
What is going on here is that these banks are looting and essentially destroying the economy not just in the UK, but elsewhere as well. With high-risk financial moves paid for with borrowed money, when things go well, they make a great deal of money, simply by moving money around and often by trashing actual, productive enterprises. The result is that many workers are left unemployed after some kind of corporate financial move.
But, when these "bankers" screw up, the taxpayers, more of whom are now unemployed or underemployed, have their signatures put on the IOU that funds continued operation of the bank, which has become essentially a pirate ship in the country's economic waters, and which this time lost a battle and needs help.
And, in many ways, they are not really "bankers" any more. Many of these enterprises have some of what we would recognize as banking services (checking, savings...), but much more of the business is devoted to making money by moving money around: not buying and holding stock - ownership in a company - but by "betting" on whether stock and other financial instruments will go up or down in value.
It's exactly the same thing happening on this side of the Atlantic.