Call My Bluff – How The Bankers Have Finally Painted Themselves Into A Corner And What We Can Do About It
In Britain, a plan is afoot to bring guaranteed work to the long term unemployed. This employment will only be guaranteed for six months but who knows? Maybe it has a slim chance of getting the ball rolling again jobs wise. And the kicker to the whole scheme is that it’s going to be paid for by swingeing taxation of Bankers’ bonuses.
This idea has brought a wry smile to many a face. Understandably though, it is not cracking much of a grin on the faces of the Bankers themselves. They are threatening to leave the country and set up shop elsewhere. This announcement has elicited a rather surprising offer of support and solidarity from the British public. Check out the following link.
Ok, it’s only logistical support. It’s a “here’s your hat, what’s your hurry?” show of solidarity, but it is at least sincerely meant. Unlike when your actual friends reluctantly offer to drive you to the airport after much heavy hinting on your part.
The Bankers have royally shafted the British Taxpayer, and for good measure they have kept their cocks out and danced increasingly taunting rings around The Government. Our elected representatives have been under no illusions as to how the Banks might behave post-bailout. It’s no coincidence that the initiative to get the banks to lend money to small businesses was called “Project Merlin”. It would have taken an actual wizard to make that happen, even though that money was handed to the Banks on a plate by the taxpayer.
I have to admit to having a tiny bit of sympathy towards the Bankers. If I could find a way of being paid millions of pounds in bonuses for doing a job that I seem to be ostensibly apocalyptically bad at, I’m not sure I would turn the opportunity down. I’d certainly consider doing it for a little while at least if the money allowed me to do something else slightly less amoral for the rest of my career.
That is where my sympathy ends though, because despite having grudging admiration for how much money Bankers are able to con out of society, I also admire a good poker player. Poker is definitely the game the Banking community has been playing for the last few years. Their threat to leave Britain if their bonuses are tampered with is a big old juicy bluff.
Everything they have been doing since 2008 has been a bluff in fact. To their credit, appearing to bring the World Banking System to the brink of collapse was a masterstroke as betting bravado goes. But there’s only so many times you can bluff a hand before someone calls you on it. This is the situation the Banks find themselves in now.
The Government and the financial world both know exactly what the threat of the Bankers leaving Britain actually means. It doesn’t really mean anything. It certainly doesn’t mean a physical exodus of high earning Bankers taking their bonus cheques with them.
A recent editorial in the Financial Times put it like this:
“Such threats should be faced down, not just because they are unreasonable but because they are of questionable credibility…. Were a bank such as Barclays to shift its headquarters, the impact on the UK would surely be minimal as it would still do much of its business and pay taxes in the country.”
Andrew Leadsome, a current MP and former Barclays Executive gave the following opinion:
“One or two of them might change their corporate headquarters for tax purposes but if they do go we probably won’t even notice. There won’t be a great outflow of workers and Canary Wharf won’t turn into a ghost town.”
Time for the Government to put the Bankers “All-in”. They are bluffing with what every other player in the game knows to be a crap hand. The very situation the Bankers have engineered is what puts them in such a weak position now. Credit ratings agencies such as Standard and Poor are giving banks that are based in Britain favourable credit ratings because they know that, in London, they will not be allowed to fail.
If they move elsewhere, the Banks have no such guarantee. Their credit ratings will be downgraded and they will find it more expensive to borrow money. They are like stroppy teenagers threatening to leave home if they don’t get what they want. And maybe they will leave home, but they’ll find life out in the Big Wide World a great deal harder than they thought.
If the Bankers do “leave”, some of them- though not many- will inevitably be relocated abroad. If they do, then maybe some of the people who have found employment via the taxation of bonuses might happily take them to the airport. Or the Bankers might have people they know who would be absolutely delighted to see them off at Heathrow, if you get my meaning. Not something we need to worry about either way though. They can definitely afford a taxi.
© Copyright Michael Grimes 2014