Knifonomics (part 30): the good bankers

It would be difficult to seriously contest the notion that Western societies are becoming more reactive and short termist, constantly lashing out at fake

Very droll, but….

villains and, in the century’s top cliche thus far, always “kicking the can down the road”.  This take on our contemporary culture is perfectly exemplified by the NHS. For example, and obsession with waiting times targets leads to money being poured into (often inferior) private sector care, to meet next week’s deadline, rather than invested in NHS infrastructure. It happens ALL the time these days. Likewise, the hunt for “someone to blame” inevitably follows on from any mishap. So it goes.

The harm in this is partly that it diminishes us as humans, becoming more venal and judgmental, and partly because we miss the right opportunities to correct problems. We aim for the wrong targets.

So, what about the evil investment bankers who brought us to our knees, financially? Well, Thomas Pascoe neatly turns on its head the notion that the investment bankers are the problem, and points the finger at our lovable high street retail banks – and at us:

The main objection made by secular liberals to bankers’ bonuses is the same as the one made by Catholics, that a system where incentivisation is based on short-term performance measures encourages moral corruption and greed.

Well, as with any capitalist endeavour, it can do, but it doesn’t have to. The temptation to gain the world and lose one’s soul is a fact of life. It is no more acute in banking than in plumbing, where you may be offered cash in hand for a reduced bill. How we respond to temptation is, in large part, a measure of ourselves.

We learn in St Paul’s First Letter to Timothy that “the love of money is the root of all evil”, but this strikes me as a very different thing. Money itself cannot be wicked any more than hairdryers, or bar stools or any other human invention. A banker may use his bonus for good or ill, but there is no obvious reason to suppose that the fact he has one disposes him to wrongdoing. If personal autonomy matters at all, that must be left up to him.

It is easy to be long-sighted when it comes to sin. Quick to identify wrongdoing in others, we seldom see it under our noses. We have become a spiteful society whose main joys seem now to stem from a desire to make others share our financial pain. Restricting bonuses at investment banks serves no moral or social purpose. A solution which would have tied the bankers’ interests to their firm would have been easy to find – equity bonuses which would be frozen for three years, for instance. But this has been discarded in favour of an arbitrary cap which will please some mean hearts in the short-term without a corresponding strategic benefit.

In our jealous stupor we miss out on the real villain of the piece: us. The financial crisis which began in the banks has become a debt crisis which began and was sustained at the ballot box. In an economy roughly the same size as it was in 2006, NHS spending is up 18 per cent. In the past three months of austerity, public spending is up 5.9 per cent. State spending, only 36 per cent of GDP in 2001, is 49 per cent today. We are on course to live beyond our means by £120 billion this year.

Our love of things has meant an addiction to consumption spending which is dragging us down further still. As is usually the case, our envy is a reflection of our own failings, not those of our targets.

Painful but true. The Knife has frequently pointed out just how wasteful the NHS is, to no good purpose, and when you look at statistics like this, then you see just how embedded the problem has become.