Thursday, February 16, 2012

An excellent portrayal of the banksters

The term 'bankster' has entered the lexicon of urban slang. According to the Urban Dictionary, it's "A portmanteau or blend word derived from combining 'banker' and 'gangster'. Usually referred to in the plural form 'banksters' to refer to a predatory element within the financial services industry". (There are more definitions at the link.)

It seems that the 'banksters' in England are of the same unsavory breed as those in the United States. The inimitable Max Hastings recently wrote about them.

I've not changed my mind: our banks are brutish institutions run by brutes

I recently read a pundit’s appeal for an outbreak of truth and reconciliation in the on-going war between the City and the public. The writer argued that, after all the abuse we have heaped on bankers, it is time to call a halt, recognise their importance to the economy and let them get on with their jobs.

My answer to that, and probably yours, would be: time enough for reconciliation when these people stop robbing us blind and mend their ways. As long as they carry on exactly as before, there is not the smallest reason to stop kicking them.

. . .

One of the most notorious bank bosses, a man whose remuneration is delivered in an armoured truck, invited me to lunch. Stupidly, I thought he wished to confess the error of his ways. I could not have been more wrong.

‘I am becoming extremely concerned, Max — you don’t mind if I call you Max?’ he began with headmasterly gravity, ‘that Britain is turning against capitalism and the payment of appropriate rewards.’

I said: ‘You mean you think people like me are unjust in criticising your remuneration?’ Yes, he answered, saying my denunciations upset his children when they read them.

I told him that a few days earlier I had met an industrialist — one of the really good ones — and told him I was booked to lunch with this particular banker. ‘Ask him,’ responded the industrialist, ‘how he can conceivably justify his obscene display of personal greed.’

My banker host refused to give up. ‘I ask you this, Max,’ he demanded, ‘do you or do you not believe Britain needs a healthy and vigorous financial services industry? Would Britain be a better place if we take this bank to New York?’

I replied that I was sure that Mervyn King does not think anyone should be frightened by such a threat, which my host has often made before.

I added: ‘Are you suggesting we have only one choice: to clap prettily as you collect untold millions every year, or watch you take the bank somewhere else in a huff?’

The banker batted stubbornly back: ‘Are you against paying people the going rate for what they do?’

I gave serial answers: first, almost no one criticises entrepreneurs who make fortunes by taking personal risk. Instead, our spleen focuses on privileged employees who play with company money, not their own, and who pay themselves grotesque sums for doing so.

Second, had he not noticed what is happening in the real world? Everybody else is getting hammered. The European financial system is hanging by a thread. We are entering what looks like a long period of austerity. Unless bankers want the peasants storming their Winter Palaces, is it not prudent to be seen to curb their appetites?

Finally, in addition to screwing their customers, bank bosses have ravaged shareholder value. My friends who understand these things say that the banks’ balance sheets are not worth the paper they are written on, because no one knows the real value of their declared assets. They are scarcely presiding over success.

My host said portentously that since he signs off his bank’s accounts, he is sure they accurately depict their condition. He travels the country meeting clients and customers, and he claims to find them pretty happy, too.

He himself is an entrepreneur: he has built a terrific investment business at the bank and created lots of jobs. He and his team deserve to be properly rewarded.

Unless bankers want the peasants storming their Winter Palaces, is it not prudent to be seen to curb their appetites?

I left our lunch bewildered that my host should have chosen to waste 75 minutes of his valuable time to tell me that he regrets nothing, and give me a dressing-down for casting aspersions on the proper workings of the capitalist system.

‘When I voluntarily waived my bonus for two years, nobody gave me any credit,’ he said crossly. He and his kind — for there are many more like him out there — inhabit a land so remote from the rest of us that no United Nations interpreter could bridge the communications gap.

I see no hope of a reconciliation between bankers and the balance of mankind unless — or until — they suffer a shock, a divine thunderbolt, a revelation of a severity which will make St Paul’s experience in transit to Damascus look like amateur stuff.

These vastly pampered moguls really believe they are worth the money, and cannot comprehend why most of the rest of us so passionately hold them in contempt.

There's more at the link. Bold print is my emphasis.

There really is a moral and spiritual myopia that both causes, and is reinforced by, unbridled greed - a constant, incessant focus on grasping for every available penny. I'm reminded of a 'successful' businessman in South Africa, for whom I did some consultancy work from time to time back in the 1980's. His personal wealth amounted to the equivalent of well over $100 million at the time, and he worked 12-14 hours a day to make still more money. He owned a sprawling mansion in a very posh suburb with four luxury cars in its garage, a yacht in each of South Africa's major ports, a private aircraft, and so on. However, he was in the process of divorcing his fourth wife. His daughter had become a prostitute to feed her drug habit, and his son had committed suicide in his mid-teens. This man couldn't even stop to mourn his boy, or reach out to his daughter . . . because he was too busy making money. It was his obsession. Was he happy? You be the judge. I thought he was the unhappiest, spiritually poorest person I'd ever had the misfortune to encounter. (Luke 16:19-31 came very forcefully to mind whenever I had contact with him. He's dead now. I hope he repented of his sins, and found his way to a better hereafter . . . )

The banksters of Goldman Sachs, Lehman Brothers, Morgan Stanley, Merrill Lynch and other US financial institutions have much to answer for. Max Hastings' words apply as much to them as they do to the banksters of England.



Anonymous said...

a simple explanation of how we got here


Billll said...

Banking and finance are the most heavily regulated businesses in the world. If you want to know why bankers do what they do, it's most likely because the government told them to do it.