Thursday, December 03, 2009

'Gimme More Money' or I won't play

So, the Royal Bank of Scotland (which by the way is now owned by us, the tax payers) wants to pay £2 billion in BONUSES across the group for its performance in 2009, with £1.5bn going to its investment banking division.

We are told today by Government Minister, Lord Myners that at least 5,000 bankers in the UK will earn more than £1m this year whilst the median wage in the UK is just over £20,000 a year, and yet some bankers expected, as a matter of course, to receive bonuses, in addition to their salaries, of millions of pounds.

The Directors of Royal Bank of Scotland have threatened to resign if they are not allowed to pay these bonuses. I say let them resign – the whole lot of them - call their bluff. Let these children throw their toys out of the pram. The morally obscene bonus payment culture has to stop.

Let me just remind myself of the story so far …

The Royal Bank of Scotland, along with other banks, screw things up so badly that in Autumn 2008 they go ‘cap in hand’ to the Government (that's you and me) to bail them out with massive amounts of tax payers money. ‘We’ tax payers ‘give’ them that money to keep them afloat and EVERYONE agrees the scandalous immoral bonus payments to bankers must never be allowed to happen unchecked again.

Here we are, just 12 months later and they want to pay themselves enormous bonuses again .... and the implicit message is .... to hell with the rest of the population on a median of £20,000 per year and struggling to meet their mortgage payments.

This is of course the TRUE face of capitalism.

Those capitalist myths about ‘trickle down of money’ are just that … MYTHS pedalled by the very people who line their own pockets and see absolutely nothing morally wrong in what they do.

As Lord Myners said today… Bankers need to join the real world.

I can’t make up my mind if it is ignorance, arrogance, ineptness, no morality, no principles of integrity, no conscience or simply lack of personal insight.


18 comments:

Marilyn Jess, DTM said...

Your post raises the same issues we have had on our side of the pond, namely paying bonuses to undeserving people.

It may not be technically illegal, yet that doesn't make it right. Those who accept such ill gotten gains are lacking in something that your Simplicity readers do have, and that's personal integrity.

My speaking hero, Denis Waitley, speaks brilliantly about personal integrity. Whenever I read about stories like the RBS, who advertise on TV over here BTW, I remember that integrity isn't situational.

Trevor Gay said...

Absolutely with you Marilyn.

I'm not sure if it's the same on your side of the pond but over here I've noticed in my adulthood how the famous now don't seem to be able to show integrity by quiet resignation when they are caught with their fingers in the till.

I'm sure when I was a kid that politicians and their like would leave with some dignity rather than hang around claiming they were acting 'within rules.'

Whatever happened to personal integrity and moral responsibility?

Maybe I'm just getting old Marilyn :-)

John O'Leary said...

Of course things are much better on this side of the pond. I spent only 45 minutes this morning trying to do an online transfer of funds between two of my banks - Brookline Band and Sovereign Bank. Eventually I gave up when I realized they couldn't do it within 3 business days - and for a fee of course. So I finally transferred it manually between the two banks (whose branches were a mile from each other). Hey, I only spent 2 hours on this. I bet your socialist banks can't match that level of efficiency!

Trevor Gay said...

Like it John - that sort of customer service is why these bankers are getting such great bonuses my friend :-)

Tom said...

Hi Trevor,

You got it right about these bonuses. But I don't think we should throw the baby out with the bathwater. The concept of a bonus is not bad, it is rather the horrible abuse of that concept which is the culprit. When someone does a great job, wealth does trickle down and the rising tide does lift all boats [but not equally]. But when folks royally screw things up, like has been happening in big companies all over the globe recently, we absolutely must insist that these guys go!

It's not enough that they can't get their obscene bonuses; they must get the Hell out. Now. THAT is the capitalist system. If you suck you should be out. We have simply perverted the system because, basically, it's Good to be the King.

Throw the bums out. There are many more folks who could do a great job for less money waiting in the wings.

Trevor Gay said...

I don't disagree with a word you say Tom. I am certainly not anti-capitalist in the context you describe but what seems to happen in reality is that personal greed takes over.

Maybe I see things too simply.

I appreciate your comments - they add value to my perspective and make me reflect which is always good - thanks :-)

John O'Leary said...

Hey Trevor, as a follow-up to my note about the sterling service of my banks, I just tried to contact Sovereign Bank to complain: (1) that a "bank check" - which is supposed to be as good as cash - which I deposited on Saturday hasn't been credited to my account as of yet, and (2) that I'm having trouble with their website. But it turns out their Customer Service telephone line doesn't give customer service after 8 pm. So I submitted an online complaint. But then I'm told it might take them a day to respond. Sovereign is owned by Spain's Santander - apparently not a customer service pacesetter. Maybe I can bank with the Royal Bank of Scotland? Customer service in the banking industry here has taken a hit of late. I miss the late great Commerce Bank.

Trevor Gay said...

Hi John - your bank reminds me of an experience I had over here my friend.

I recall leaving Barclay's Bank after being a customer with them for over 15 years and I've never returned and never will. That issue was totally down to appalling customer care;lack of sensitivity and no personal service whatsoever.

Banks often seem to overlook the fact I own my money - not them!

John O'Leary said...

I just had a long chat with one of Sovereign's call center reps. (Having consulted in call centers I know the game.) She confirmed for me that they don't get enough training so it's no surprise I always get wildly different answers to the same questions. We commiserated over the fact that the people who MOST need the most training in a company (the front line) are the ones who receive the least. But as a result of our conversation she is determined to speak up at Sovereign's "town meeting" tomorrow to get the training they need.

Trevor Gay said...

As you know John I am a passionate advocate of front liners. They deserve far more respect and training than most companies give them.

Sounds like you did a great piece of training/coaching there my friend - well done !

John O'Leary said...

Trevor, if my bank service gets any worse I might even try Barclay's! :-)

Scott Peters said...

Trevor,

At a point in the past, I believe businesses were concerned about ethics and doing what's right for employees and clients regardless of "law" per se. Over the past decade, companies have abandoned business ethics for boundaries that separate what's legal from illegal. There is a difference between what's ethically right and legally allowed. I view ethics as a moral obligation as opposed to legal responsibility. Many large companies have abandoned what's ethically sound in favor of just trying to avoid prison.

Marilyn states the dynamic well and we have huge issues on this side of the pond (USA). Outside of out of control spending, the Senate has opted to pursue a health care bill that doesn't have a public option. While lobbying and fundraising is legal in politics, the lack of ethics and regard for American people is shocking when bills are introduced and debated on Capitol Hill.

We have a two pronged approach for our issues. One is a lack of ethics and decency with our own government. The other prong is capitalism that has learned well from a defunct government body that remains largely "unchecked". The American people, i.e. the frontliners and middle income earners, are getting screwed by each prong of the problem.

What to do? Someone once told me:

In God we trust...all others pay cash.

Trevor Gay said...

John - I hope you never get that desperate my friend :-)

Trevor Gay said...

Scott – it’s always a pleasure to get your perspective on such matters.

Ethics and integrity are out the window in so many things we see these days on both sides of the pond I’m afraid – whether it be politics, business, entertainment or sport. I wonder where it all started to go wrong and why? Or is it just that it gets reported more these days. Over here the right wing Margaret Thatcher Government of the 1980’s encouraged personal greed and she led the dismantling of communities through monetarist policies that led to competition rather than co-operation.

‘In God we trust – all others pay cash’ is a great line thanks.

I know you appreciate the beauty of the words and the profound wisdom contained in the Bible and this is an extract I love:

"Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment. Command them to do good, to be rich in good deeds, and to be generous and willing to share. In this way they will lay up treasure for themselves as a firm foundation for the coming age, so that they may take hold of the life that is truly life."

(1 Timothy 6:17–19)

Mike said...

Trevor, you are confusing what occurred with RBS with capitalism. What financial institutions, mortgage lenders, stock brokers, and our respective gov'ts have done with and to our economies has absolutely no resemblance whatsoever to capitalism. Also, the term "trickle down" was simply a derogatory appellation coined by some idiot congressman in the mid-1980s to try to disparage President Reagan's economic policies. Capitalism, practiced properly and responsibly, has been and will continue to be the the best hope for all mankind. Rememb er what Ms. Thatcher said about socialism--that sooner or later you run out of other peoples' money.

Trevor Gay said...

Hi Mike – "Capitalism, practiced properly and responsibly, has been and will continue to be the best hope for all mankind."

The problem is Mike it is very, very rarely 'practised properly and responsibly' - because of greed.

Its all about opinion and that is yours my friend which if course I respect but disagree with.

Throughout the last several hundred years economists, academics, historians and politicians have argued the relative merits of socialism and capitalism. We all have our individual view. There is NO consensus.

Mrs Thatcher is the least credible person in the world to quote when it comes to successful management of an economy.

If you really want to know Mike how it felt to live under her leadership ask the millions of people from the devastated mining communities across Britain. Her extreme right wing, capitalist polices ruined entire communities across Britain and I would not place one iota of faith in any quote from that woman.

It seems to me capitalism means most of the wealth is owned by very few people at the top and we ordinary folks rely on their integrity, fairness and sense of community for the trickle down of wealth to actually happen … and the evidence throughout history is that those people with wealth at the top are selfish and greedy – want to desperately hold on to the money, make more of it to boost their own wealth - looking after number one - which is why RBS is a very relevant example – selfish, greedy bankers making hay while the sun shines and to hell with anyone else as long as I get my bonus

I am much more in favour of socialism where at least the concept is to share wealth and people who are the most vulnerable are looked after rather than being expected to cope come what may.

Rather than quote Mrs Thatcher I prefer this quote.

“Advocates of capitalism are very apt to appeal to the sacred principles of liberty, which are embodied in one maxim: The fortunate must not be restrained in the exercise of tyranny over the unfortunate.” - Bertrand Russell

John O'Leary said...

Trevor, I think you should tell us how you REALLY feel about Maggie T. :-)

Mike, "trickle down" theory - which has a long history - was eventually criticized even by Ronald Reagan's Budget Director, David Stockman. But that deserves a post - or blog - of its own.

Trevor Gay said...

Cheers John - I just have to listen to former coal miners to know how it felt to see their livelihood taken from them with no hope for future employment.

You must watch the movie "Brassed Off" if you really want to understand the feelings of mining communities under the rule of Mrs Thatcher who was called the 'Iron Lady' as if it were some form of accolade.

Some consider her a heroine - I prefer to see her as someone who divided our nation - and we have never recovered.