Saturday, November 05, 2011

Reply from a banker

What should we do about the bankers and their bonuses? The EU Commission has proposed a limit on bonuses within the EU, but this has prompted the response that it would only drive the heavy hitters abroad to New York, Dubai and Singapore.

Here is the response from one right winger posting in the Independent:

It's the taxes that the banks already pay that have funded half the social services this country provides. If you drive these people offshore we will get no tax at all! We lost our manufacturing base to the Germans because of socialist policies, we bankrupted our nation with socialist policies. We are not to blame for the Euro, Germany is to blame. They are the country piggy backing off an undervalued currency for them which just so happens to be an over valued currency for everyone else in the Eurozone. If they kicked out the Germans the currency would float down to its real value which would be about 50% of its current value with the results that their exports would increase substantially & they would be able to compete with the likes of India, Brazil, Turkey, China, Korea & Thailand etc. It is then the Germans whose currency would increase in value & their exports would slow down as they started to suck in cheaper imports & export less. At the moment to Germans are having their cake & eating it & aren't prepared to to share any of the burden. I reiterate it is the Germans that have caused the Eurozone problems so why should we drive out our banking sector to balance the burden that the Germans aren't prepared to fund when they are the reason behind the problem.

The UK banking sector wasn't the cause of the global crisis in 2007; that was down to the American miss-selling their debts to us. The UK banking sector has weathered that storm. No-one in the street lost any money it was the so called filthy rich that took the biggest hits. The UK economy is where it is because Labour borrowed when the country was booming instead of putting away a cushion for a rainy day.

They invented jobs that didn't actually create any wealth & they posted most of these non-productive jobs in their own Labour heartlands knowing full well that when the bust did happen it would be their own supporters that have been sponging off the state with unproductive over paid jobs that would have to take the first hit.

They borrowed money to create Green jobs that also cost a lot & produce nothing. They had to be subsidised by us all to make it worth their time & they got a guaranteed tariff to produce something that no one either wanted or needed which was electricity while we were all in bed asleep.

These are Labour & EU problems which are adding a burden to the lives of every man woman & child in the UK & are nothing to do with the last great UK industry, the banking sector which the greedy Europeans want to get their hands on.


Anonymous said...

well! I am lowly nurse and naive as to the ways of the economic world but this is exactly what I said to my husband in the kitchen a couple of weeks ago.

Dan Cullen, Westchester, NY said...

Dr. Hamblin,

In re your comment "The EU Commission has proposed a limit on bonuses within the EU, but this has prompted the response that it would only drive the heavy hitters abroad to New York, Dubai and Singapore."

The EU can tell employees of private corporations what they can earn, whether it be wage, salary and/or bonus?

It reminds me of when Hillary Clinton stated during her run for the 2008 democratic presidential nomination, that she was going to take monies from the oil companies! This was to make them pay their "fair share" so she could redistribute the wealth. Who the heck is she? To the best of my knowledge she's not a major stockholder, nor stakeholder, in the 3 major U.S. oil companies.

As noted within a Forbes article earlier this year ( "America's three biggest oil companies, ExxonMobil (XOM - news - people), Chevron (CVX - news - people) and ConocoPhillips (COP - news - people), all endure income tax burdens of more than 40%--higher than the statutory U.S. rate of 35%." ExxonMobil incidentally has a 45% rate.

Putting aside the inflationary printing of money and/or continuous borrowing, these politicians don't seem to have the most basic economic understanding that public programs are funded by monies drawn out of the private sector AND that the continuation and growth of public programs, as well the associated ever increasing bloated bureaucratic power realms, surcharge the private sector's growth rate. Not to mention the distribution of taxpayers’ monies to corporate scams of large financial political supporters.

Studies have shown that the optimal tax rate is in the range of 17-20% of GDP. This should amply cover a strong defense, proper infrastructure development & maintenance, certain programs to aid and assist children and the elderly, et cetera.

Money goes where it's best treated.

Terry Hamblin said...

Quite! Of the EU leaders, Sarkozy comes from a family of Hungarian refugees and Merkel is an East German. Poland, Estonia, Czech Republic, Slovakia, Lithuania, Latvia, Hungary and Greece are all ex-communist countries. No wonder Britain feels isolated in Europe.

Dan Cullen, Westchester, NY said...

If you look across the pond, toward the west, you can still faintly see a once "shining city on a hill" where it's brilliance has been diminished since January 2009 - - but its beacon will start to shine again starting November 2012. So don’t feel so isolated. I’m also of the impression that there are glimmerings increasing in strength coming from Poland.

You can also look toward your far east. Following is from an AFP report titled “China fund official slams 'indolence' in Europe”:

SHANGHAI — A top official of China's $400 billion sovereign wealth fund has accused Europe of "indolence" and said any Chinese investment in the debt-laden region would be based on financial returns.

Jin Liqun, chairman of the board of supervisors of China Investment Corp, slammed the welfare systems of European countries and said the continent must address its own problems to attract outside investment.

"If you look at the troubles which happened in European countries, this is purely because of the accumulated troubles of the worn out welfare society," Jin told Al-Jazeera television in an interview broadcast at the weekend.

"The labour laws induce sloth, indolence, rather than hardworking."

Jin, a former vice finance minister, said Beijing would consider investing in Europe but any decision would be based on likely investment returns.

"Our people would ask us the question: 'Wait a moment. Are you sure you can get a fair share of returns?'," Jin told the television network.