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Saturday 15 January 2011
Letters: Bankers and their bonuses
Why do bankers think they are worth it?
Just what is it about bankers that they consider they are "worth" such obscene amounts of money?
Length of training? Doctors' and dentists' training is longer and more arduous. Responsibility? How about doctors, nuclear-power-station designers, airline pilots or nuclear-submarine commanders? Numbers of staff? Generals, CEOs, Cabinet Ministers have more. Value of assets overseen? How about the Prime Minister, Governor of the Bank of England, Chancellor of the Exchequer or CEOs of major companies? Danger? How about soldiers, deep-sea divers and helicopter pilots?
As their gambling habits seem to have been responsible for the financial crisis, perhaps we should employ some casino owners from Las Vegas, or bookmakers from Newmarket, to run our banks. At least they would know how to lay off bets.
Sean O'Grady's (13 January) justification of the bonus culture relies entirely on crude assumptions which, were they answered, would torpedo his thesis.
He admits that the argument for fairer wealth distribution is old and respectable before sneeringly dismissing it instead of attempting to refute it – which is just as well for him, because it's irrefutable.
He asks whether we wish to be more like Sweden than the US, going on to say that if that is the case we ought to be more honest about it. Well, it is and we are, most of us, which once admitted should put paid to the rest of his piece.
He asserts that bankers must be paid the going rate, without asking who fixes it and how. He refrains from asking whether others could do the bankers' jobs equally well, whereas it seems obvious that most intelligent and financially literate graduates could and would do just that for far less money.
He asks whether Wayne Rooney's salary is fair, taking it for granted that it's not, while wilfully ignoring the fact that Rooney possesses skills that entertain and are envied by millions of us, are well worth his salary to his club, and that demonstrably very few other people possess - unlike those of the bankers.
As regards the furore over bankers' bonuses – I would suggest applying the "desert island" test. Think of a group of people stranded on a desert island as a result of, say, a plane crash. Then imagine who would be called upon first – nurses and doctors to deal with the aftermath of the crash and tropical diseases. Thereafter builders and plumbers to provide shelter and sanitation; chefs to cook nutritious food; care workers to look after the elderly and infirm; teachers and teaching assistants to nurture the young; refuse and hygiene workers to provide a clean and safe environment; legislators and police to uphold the rule of law; military personnel for defence; clergy for people's spiritual needs, etc.
Bankers would appear much later on this list, if at all. However naive this approach, surely we can draw upon it to ensure a fairer, saner society? After all, who would we miss first; the bankers or the binmen?
Sean O'Grady asks if the furore over bankers' bonuses is driven by a concern about the safe conduct of our banking system, or by a concern about the distribution of wealth.
The issue is not one of either/or; bankers' bonuses neatly encapsulate both concerns. The rich have been getting much richer over the past three decades, at an accelerating rate, the poor relatively poorer, and those in the middle have been moving inexorably downwards.
This upwards redistribution of wealth is due to the lack of adequate stewardship by politicians, commercial regulators, and shareholders, allowing the grossly disproportionate inflation of the "going rate", as O'Grady puts it, for senior management.
Quite separate from any moral view on injustice, the increasingly lopsided distribution of wealth is bad for everyone, both economically and socially, the rich included. One reason that bankers are picked on is that the bankers are the ones we know about.
I completely agree with Sean O'Grady; let's leave bankers' pay to the market forces. After all, the markets know best, don't they?
Newcastle upon Tyne
What has Mr Diamond done to earn his bonus? I mean not how has he negotiated such a fantastic deal, but how has he created this wealth? I ask the question neutrally. An increase in bank profits is largely a function of the markets rather than an individual's efforts.
And in what other business are profits creamed off so extensively by functionaries of the organisation rather than being returned to those who are putting up the capital from which the profit is generated?
Justice not done in Woollard case
In April 2009 a policeman appeared to strike with a baton and push to the ground Ian Tomlinson as he was walking home from work in London during the G20 protests. Mr Tomlinson collapsed and died minutes later. As the Crown Prosecution determined autopsy evidence was "conflicting", no charges were brought against the police officer. Not even common assault for the unquestionable multi-witnessed attack on Mr Tomlinson.
This past November 18-year-old student Edward Woollard, swept up in the commotion of student protests, picked up and threw a fire extinguisher recklessly from a seven-storey building, shocking officers but causing no actual harm. Woollard then, to his credit, gave himself up and pleaded guilty. He expressed deep remorse for what he had done but none the less he was sentenced to two years, eight months in custody.
This for me is a case of courts dispensing extraordinarily severe custodial punishment, not justice. Edward Woollard's life is now hugely damaged. He knows what he did was very dangerous and wrong. As he said himself, he is mortified. Yet a police officer attacks a member of the public, who dies, and the legal system collapses in procedure with no charges. How then, in comparison of these cases, can we possibly say we live in a just society?
No doubt the Home Office and police are pleased to have obtained a conviction in the case of Mr Woollard, the student who threw a fire extinguisher off the roof of the Conservative Party headquarters.
But, bearing in mind that no one was killed or injured, isn't a jail sentence of 32 months rather excessive? For comparison, you reported recently that a lorry driver who ran over and killed a cyclist, and who subsequently admitted to having defective eyesight, was fined a mere £200 and debited three points on his licence. Isn't our justice system losing its sense of proportion?
Costly car parks
I endorse Richard Ingrams's comments regarding the costs charged by APCOA in station car parks (8 January).
On Monday 3 January (a Bank Holiday), I parked at Wokingham station and used the train for the rest of my journey. While the train companies charged an off-peak price for Bank Holiday travel, APCOA charged the full daily rate – not even the weekend reduced rate applied.
So, £3.70 for the return train journey, £6 to park the car. Needless to say, the car park was almost empty.
In his gloss on Alfred Brendel ("Brendel is a genius and he knows it", 8 January) David Lister misrepresents the artist. Failing to detect the irony in Brendel's often repeated remark – "I had a short period of genius in my teens" – Lister takes it literally. Of course, the "G" in "Genius" should be capitalised, for instance as it is in Brendel's book of interviews with Martin Meyer. The term genius is not without use, but sophisticated minds – such as Alfred Brendel – know that as a self-description it can only obscure more than it illuminates.
A Coaltion win
At Oldham East the Coalition parties out-polled Labour when their votes are combined. If AV had been in operation, the Liberal Democrats could conceivably have won the seat when second-preference Conservative votes were added to the LibDem total. Food for thought.
Perhaps the recently imprisoned ex-MP David Chaytor could usefully occupy his time improving Anglo-Mongolian relations as I see (reports, 8 January) that Mongolia's head of counter-terrorism, Bat Khurts, is also languishing in HM Prison Wandsworth.
Perspectives on the Brisbane flood
Four years ago my wife and I were expat "poms" living in Brisbane, struggling with draconian water restrictions as our once-lush subtropical garden shrivelled and died before our eyes under the hot Queensland sun – a metaphor for our diminishing quality of life. A bath was a luxury, watering the garden was done by bucket and washing the car forbidden. The dams supplying the city were down to less than 20 per cent of capacity.
We returned to England at the height of the drought and now the city we called home lies underwater – torn apart by the devastating floods that have swept down the Brisbane River valley. Homes and businesses have been inundated, the central business district left powerless, the river contaminated by sewage, public transport disrupted and businesses left unable to function.
Many felt the drought was caused by global warming; was, too, the latest disaster to strike this part of the so-called "lucky country"? Anna Bligh, the Queensland premier, has referred to the flooding as a "natural" disaster but there is nothing natural about the way mankind has systematically exploited the earth's natural resources, polluted her seas and released tonnes of carbon dioxide into the atmosphere to fuel our profligate lifestyles.
As the floodwaters recede, Queenslanders will respond to what has befallen them with their usual fortitude. But should we not be reflecting on current and past disasters and questioning whether we are to blame? Could it be that the extremes of weather we see are not "natural" in the true sense of the word but man-made, the results of climate change?
Spirit of the Blitz
Terence Blacker (14 January) is absolutely right about the spirit of the Australians facing the floods in Queensland and New South Wales. What cannot be conveyed to anyone who has not watched many hours of television coverage of the disaster, is its overwhelming extent.
The closest comparison must be with the wartime blitzes on Coventry, Plymouth and the East End of London. The destruction of property during a few days must be many times greater than the destruction of property during all the bombing raids on England during the war put together; and though the loss of life, happily, has been considerably less, it has been no less horrific – no one who has heard them will forget the eyewitness descriptions of houses swept away on flooding torrents, trapped families within them screaming for help.
Those who remember the spirit of the civilian population of England under the Blitz can best understand how Australian civilians are coping; the informal committees concentrating on the clean-up, the sympathy of one neighbour with another, the sudden emergence of perhaps unexpected vigour and real civic feeling among local politicians who formerly it had been a pleasure to bait. "Ordinary people" are, once again, proving themselves heroic.
Mosman, New South Wales, Australia
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