Banks, like any other business, try to attract the best talent available by offering the best conditions, usually the higher pay and bonus. By limiting the bonus they can pay to their employees, the Government limits the talent they can attract and makes it difficult for the banks to repay government money.
Bonuses is a flammable subject and the Government is trying to get some votes out of it but the politics of envy are hard to manage: you cannot generate just the "right" level of anger before everything gets out of control. And anger spreads quickly.
Banks should be able to pay whatever bonuses they want. The problem is that they should have never been bail-out in the first place. Socialising the loses and privatising the profits generates envy, and envy takes us one step closer to socialism. Norther Rock and RBS should have never been rescued by the taxpayers. The consequences of that are only now starting to appear.
Sunday, 14 February 2010
Sunday, 7 February 2010
Fly you fools !
Most Europeans governments denied the 2007 economic crash hoping that consumers would keep spending and thus averting most of the disaster. In the meantime, businessmen close to the governments and highly-paid bureaucrats were cashing their shares and running like a Balrog was chasing them. Treating citizens like idiots is a characteristic of deficient democracies.
Britain seems to be in a "back to normal" mood, now that the economy grew 0.1% last quarter. It took the largest economic stimuli in history, including the printing of £200 billion pounds, a near 30% devaluation of the Pound and a budget deficit close to 12% to grow 0.1%. Now, the media and the Labour government try to make us believe that the depression is over. They hope that Britons will carry on buying things they do not need with money they do not have.
Listening to what the government and the media say is close to economic suicide. House prices, no matter what you read on the tabloids, will not grow 10% this year. There is a £170 billion hole in the public finances and guess who is going to cover it. Investors tread UK debt as toilet paper.
The 2007 crash was only the beginning. The bureaucrats know it, the lobbyist know it, the government knows it. And, despite what they might thing, we know it.
We are not as stupid as they think.
Britain seems to be in a "back to normal" mood, now that the economy grew 0.1% last quarter. It took the largest economic stimuli in history, including the printing of £200 billion pounds, a near 30% devaluation of the Pound and a budget deficit close to 12% to grow 0.1%. Now, the media and the Labour government try to make us believe that the depression is over. They hope that Britons will carry on buying things they do not need with money they do not have.
Listening to what the government and the media say is close to economic suicide. House prices, no matter what you read on the tabloids, will not grow 10% this year. There is a £170 billion hole in the public finances and guess who is going to cover it. Investors tread UK debt as toilet paper.
The 2007 crash was only the beginning. The bureaucrats know it, the lobbyist know it, the government knows it. And, despite what they might thing, we know it.
We are not as stupid as they think.
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