I’m referring to the fools trying to p*ss around with how banks pay their staff. It am all over de noos, and to spare the blushes of some of my more delicate readers I won’t refer you to Timmy, you can have the Graun instead: Don’t cap bank bonuses, scrap them. The EU’s plan to cap bonuses sounds like good news – but it may simply lead to banks jacking up salaries. Yes, you idiot, that’s exactly what will happen. And notice the follow-on idiocy: capping bonuses leads to increases in basic pay, so lets cut bonuses entirely! That will surely lead to… yes, that’s right, yet more increases in basic pay.
The basic problem here is there is a fair segment of the population / chatterati that are really really jealous of people being paid more than them for what they think of as little work. In fact they are completely wrong: its a lot of work (at least the only guy I know in banking regularly leaves the house before his kids get up and gets back after they are in bed). So they want bankers to be paid less. But being utterly ignorant of basic economics, they don’t seem to realise that the bankers are not being paid because the banks like throwing money away; they’re being paid because the banks think they need to (banking isn’t easy, its fiercely competitive, you do it wrong with not-quite-top-grade people and you get stuffed). So if you restrict bonuses, then basic salaries go up (aside: if you’re an I-hate-bankers type person this has one good consequence: in bad times, staff have to be fired, because their basic salaries are high. When they had low-basic and most of they renumeration via bonus, they could be kept on with just basic in bad times).
The correct solution to all this is for the State not to be intervening in private enterprise if it doesn’t need to. This is almost entirely lead by jealousy and stupid pols trying to make a name.
[Late addendum 2013/03/09, added for my own benefit after reading the Economist, but it just highlights something I thought already: the reason that all this I-hate-bankers is being spread by the pols is because, well, its great to have scapegoats. So no-one, or at least certainly no pol, is willing to stand up and defend them. For which, ter be ‘onest, they’ve really only got themselves to blame – they’ve been content to rake in the money, and feel non-accountable and hidden -W]
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