But the banks will all leave!

That’s why the UK government ‘s plans to demand more information about highly paid bankers are being scrapped– HSBC has been especially vocal in insisting they’d leave the UK. But guess what? Hong Kong already demands that, and HSBC didn’t leave. Apparently Thatcher also imposed a windfall tax on banks. They didn’t leave then either.

6 thoughts on “But the banks will all leave!

  1. Good thing too. I think I’m right in saying there is some evidence that greater transparency in income actually increases the pay of the top earners. Greed and jealously are more influential then shame.

  2. Frank Rich’s latest piece in the NY Times raises a question: Have the banks bought the gov’t?

    His comment on the situation in the States is dangerous for one’s blood pressure:

    As John Cassidy underscored in a definitive article titled “Who Needs Wall Street?” in The New Yorker last week, the financial sector has paid little for bringing the world to near-collapse or for receiving the taxpayers’ bailout that was denied to most small-enough-to-fail Americans. The sector still rakes in more than a fourth of American business profits, up from a seventh 25 years ago. And what is its contribution to America in exchange for this quarter-century of ever-more over-the-top rewards? “During a period in which American companies have created iPhones, Home Depot and Lipitor,” Cassidy writes, the industry reaping the highest profits and compensation is one that “doesn’t design, build or sell a tangible thing.”

    It’s an industry that can buy politicians as easily as it does dwarfs [reference to an earlier anecdote], which is why government has tilted the playing field ever more in its direction for three decades. Now corporations of all kinds can buy more of Washington than before, thanks to the Supreme Court’s Citizens United decision and to the rise of outside “nonprofit groups” that can legally front for those who prefer to donate anonymously.


  3. The U.S. government has long served as a welfare state for large corporations. The government could have owned the banks, literally by buying them, though distorted conflicts of interests and dubious concerns about socialism continue to prevent that sort of thing from happening. God forbid the government might take direct steps to help the people, as opposed to the opulent. If Norway can successfully nationalize their oil industry, for instance, why couldn’t we successfully nationalize our banking industry? Sure, I know the usual worries. The problem is that we have not sufficiently tried variations in this direction to see what does and does not work. (If the government buying the banks did work in some way, we could better fund more social programs as well as distributing ownership amongst, or paying dividends to, the population – and so on…)

  4. In ignorance but not in absence of much thought and sentiment, I usually say, “Let them leave.” It’s nice to know that one of Thatcher’s measures allegedly worked. Even if I did not know this and/or if that measure did not work, I would still suggest, “Let them leave.” Maybe it is the recovering Marxist in me, but I think we might be better off with people willing to work under various conditions (that many people will not work under for what I would call ignoble reasons) for various good reasons. (This reminds me of how people are beginning to reject microfinancing because of what happens when you let loan sharks and other ordinary bankers/banking institutions (mis)run the programs.)

    What? – We need to pay our university sports coaches a seven figure salary because otherwise they would leave? Let them leave. What? – We need to pay our school administrators many times what we pay our teachers and other staff more directly related to the classroom and students because otherwise they would leave? Bearing in mind the usual arguments, might some good things arise from letting them leave?

    In general, I think we need to “Let them leave” much more often – in part just to give it many good tries to see what really does and does not work. Might there be more Ben and Jerry’s in the world (who, for instance, would not pay any employee in their company more than 5 times – later raised to 7 times, but still virtually unheard of in comparable businesses – the lowest paid employee, for instance)? Sure, it was hard for Ben and Jerry’s to hire executives, but did the hires always result in a compromise in quality as opposed to a difference in mindset?

    Perhaps banks are a different story, given how central they are to the economy and all. Still, if we let them leave, wouldn’t others give a go at taking (or be assigned to take) their place under the specified conditions?

    Come to think of it, this is just a variation of G. A. Cohen’s egalitarian ethos and his criticism of Rawls’ exclusionary focus on the basic structure.

    Let them leave. – David Slutsky

  5. This is a bit of a thread derail, but I’d love to see a business ethics movement toward the Ben and Jerry’s model. They did a number of really wonderful things. When they went public with their company, they wanted people to be able to buy in at a very low cost so that ordinary community members could afford to be shareholders. They had trouble finding someone who was wiling to help them do this in the financial industry, and so learned to do it themselves.

  6. Yes, I am totally with you Kathryn (and the Ben and Jerry’s model). One inside story (that I happen to know a bit about) is Fred Lager’s book titled, “Ben & Jerry’s: The Inside Scoop: How Two Real Guys Built a Business with a Social Conscience and a Sense of Humor”.

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