Outlook So here we go again. There is something about Goldman Sachs that winds people up the wrong way. So while Goldman is an American bank that has had no direct support from the British taxpayer, there will no doubt be a hue and a cry when it today unveils its compensation figures, including, as they will, some generous rewards for London-based staff.
What is curious, however, is that Goldman will almost certainly face more flak in this country than it does back home, where many more staff are about to benefit from its largesse. Last week, Bob Diamond, the chief executive of Barclays Bank, urged Britons to move on from their penchant for banker bashing – he did so, no doubt, partly in the knowledge that many more Americans have.
That public anger over bonuses in the US has subsided more quickly than here is not entirely rational. After all, the recession there, blamed, as here, on the bankers, has been more painful, at least in terms of unemployment and the collapse of the property market. The backlash on bonuses ought to be more bitter in the US.
One explanation might be that American taxpayers are further advanced in the process of extricating themselves from support for the banks – and have made some healthy profits, particularly from Citigroup, while doing so. That's another reason for the British Government to get us out of Royal Bank of Scotland and Lloyds sooner rather than later: the taxpayers' stake in these banks polarises all debate about their activities.
However, this can't be the only factor. Note that a year ago, when Britain imposed its one-off bonus tax on the banks, two Democratic Senators sought to do the same in the US, but failed to attract sufficient support from colleagues. Even then, Americans did not feel angry enough with the banks to put their traditional antipathy towards higher taxes to one side.
The easy explanation – certainly the one many bankers would reach for – is that Britons always get sniffy about other people getting filthy rich, whereas Americans like to see success rewarded. The politics of envy if you like.
Yet this doesn't feel satisfactory either. The furore here over bankers' bonuses does not pre-date the credit crisis: it reflects anger over what happened, rather than an inbuilt predisposition towards rage at big rewards per se.
There may be some logic in the argument that Americans are not so intimately connected to their biggest bonus payers. Goldman Sachs, for example, does not have a retail presence to speak of, whereas Royal Bank of Scotland, say, has cashpoints on every corner. The big British banks are more closely entwined with people's lives than most of their American rivals and their customers may therefore feel more entitled to kick up a fuss (in which case, Barclays, say, might want to rethink its commitment to the universal banking model).
The biggest difference of all, however, between the US and Britain is the attitude of political leaders. In Washington, even President Obama stopped bashing the banks some time ago, while senior Republicans have been queuing up to put their support for Wall Street on record. In this country, politicians vie to outdo each other on talking tough on the banks.
Has the rhetoric been accompanied by action? Not really, either under this Government or its predecessor. Labour's famous bonus tax was a one-off, while the Coalition's levy is shrugged off in the City. And this failure of delivery is part of the problem. Bonuses make people angry. The inability and unwillingness of politicians to stop the pay-outs, despite all the rhetoric, causes greater fury.
The problem now for British politicians is that they are isolated. If American anger has dissipated, the sense of outrage never really existed at all in Asia. Accordingly, for all the talk of co-ordinated international action, if our Government wants to clamp down further on bonuses it will have to go it alone. And if it's not prepared to do that, it should say so, rather than fuelling a thirst for action it has no intention of quenching.Reuse content