My interest in this matter is as an example of how little we are free or democratic. Bankers and financiers of all kinds don’t deserve their salaries,let alone the obscene bonuses that render full democracy impossible and take the rest of us down the road to serfdom.
The argument is clouded from the start by our legal systems which make this wrong a “right”.
The real argument should be about whether we can have full democracy and have the highly disproportionate wealth such “earnings” create. My view is this is impossible so the “earnings” should be. Although this may look crassly naive, the view can be supported. The problem is that we are ideologically scared of a free and equal society and cannot have rational debate. This condition of being ideologically scared is not simply a matter of propaganda and is linked to our condition as social animals. So I would look first not at bankers and sports stars but mice.
Social mice, even in good times, live highly subordinate lives under a male king who keeps the rest in penury. If we take a subordinate male out of this condition, feed it up and train it to kill a string of palooka mice, it will then challenge the old king, kill the sod and become just the same type of king itself. The apparent dominance skills of the old king turn out not to be in short supply, but maintained by hierarchy (being ideologically scared). I wrap ideology with genetics and the environment here and suggest we need to now more on this for social design. We should not be looking for genetic determinism, but how to overcome it. We need a much wider view of these animal matters than I have space for here.
In considering banker bonuses and such, we tend to argument based on wads of assumptions about pay, reward, motivation, innovation, fairness and more that may well just be a load of old fables rather than any scientific base. People can argue (and have) for centuries about notions like the existence of god when the truth is we can’t establish any such entity. I suspect our general understanding of how the world works is based on the authority of talking snakes too.
When we talk of a banker bonus, I hear only silence on what such payouts and consequent accumulations of wealth mean for the rest of us. For the payments to be worth anything, they must force the rest of us to deliver something and they also render the recipients to this welfare. Many more questions arise, such as the opportunity costs of making these payments and, indeed, those of having a system in which they are sought after. Is any of this the right quest for our alleged brightest and most able?
We lack a public, scientific account.
Allcoppedout's Blog 
Is any of this the right quest for our alleged brightest and most able? …
Of course not! Back behind it all, what bankers have been playing with is the efforts/work of others. We can go all the way back to Marx’s theory of surplus value – basically, in the complex world of relatiohships and the various more or less agreed valuations of worth, you, I, all of us, have some of the generally agreed value of what we’ve been doing which we don’t immediately need in order to survive. So we park it somewhere. In the course of time, we’ve been taught that we can even trade with this surplus value …let it earn more value on its own. A strange concept … but still.
The point is, we have entrusted this value of ours to the bankers. They have made us two promises – one absolute, one relative. The absolute one is that they will reliably mind it for us, the relative one that they will (mysteriously) grow it for us.
Instead they steal it … and when their bluff is called, they shrug their shoulders and tell us its gone.
Trust is the basis of the whole business, but they have shown us that they are completely untrustworthy … right up to the very top. In the end, the biggest players follow only their own interests and will betray everything else.
An example from the past decade. Following a hefty injection of European structural funds and the discovery of Ireland as a convenient mailbox address for all sorts of … er …. creative “financial services”, the Irish economy boomed and then bubbled. The Irish grew intoxicated on this heady mixture and borrowed and leveraged themselves into a weird fantasy world.
Then the bubble burst, as bubbles inevitably do. A large amount of those crazy borrowings were the basis for unsecured bonds, which had, in the meantime, taken on a whole speculative fantasy identity of their own, fuelling mad multiplications of millions schemes. When the excrement hit the ventilator in 2008, those holding the bonds – a large proportion of which were issued by a small number of cowboys operating a casino known as the Anglo-Irish Bank – were left very exposed.
If the rules of free-market capitalism had been followed, Anglo would have gone bust and the news for the speculators who held those bonds would have been, “tough shit.” But doing this would have put a number of large financial institutions in Frankfurt, the City of London and Wall Street into a potentially precarious situation. So instead, the ECB and IMF told the Irish Government of the time that they (i.e. the Irish taxpayers) would have to guarantee these bonds unconditionally. And the fools in the Irish government caved in and agreed.
In the course of all this, it was pointed out that the crooks at Anglo-Irish had paid a little lip-service to some kind of sanity and had insured the bonds against losses on Wall Street. But when this point was brought up, the US Treasury Scretary, Mr. Geithner – and one might wonder why any of this should have been regarded as any of his business – summarily interposed a veto. No, he sent the message, this insurance would not be honoured. The result of all this is that the entire Irish taxpaying public will be paying through the nose for the Ponzi schemes of International Financial Houses for the next quarter century.
Trust is the only basis for banking. But the bankers have shown that they put no value whatsoever in the whole idea of trust. It’s become nothing more than robbery of the weak by the strong.
This, and worse, is true Francis. I suspect the big lie is that banking is necessary in this form at all. They are between fair transactions and the rest of us.
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