The dangers of demonology
Hatred of bankers is one of the world’s oldest and most dangerous prejudices
Jan 7th 2012 | from the print edition
HURLING brickbats at bankers is a popular pastime. The “Occupy Wall Street” movement and its various offshoots complain that a malign 1%, many of them bankers, are ripping off the virtuous 99%. Hollywood has vilified financiers in “Wall Street”, “Wall Street 2”, “Too Big to Fail” and “Margin Call”. Mountains of books make the same point without using Michael Douglas.
Anger is understandable. The financial crisis of 2007-08 has produced the deepest recession since the 1930s. Most of the financiers at the heart of it have got off scot-free. The biggest banks are bigger than ever. Bonuses are flowing once again. The old saw about bankers—that they believe in capitalism when it comes to pocketing the profits and socialism when it comes to paying for the losses—is too true for comfort.
But is the backlash in danger of going too far? Could fair criticism warp into ugly prejudice? And could ugly prejudice produce prosperity-destroying policies? A glance at history suggests that we should be nervous.
Scorn for moneymen has a long pedigree. Jesus expelled the moneychangers from the Temple. Timothy tells us that “the love of money is the root of all evil.” Muhammad banned usury. The Jews referred to interest as neshek—a bite. The Catholic church banned it in 1311. Dante consigned moneylenders to the seventh circle of hell—the one also populated by the inhabitants of Sodom and “other practisers of unnatural vice”.
For centuries the hatred of moneylending—of money begetting more money—went hand in hand with a hatred of rootlessness. Cosmopolitan moneylenders were harder to tax than immobile landowners, governments grumbled. In a diatribe against the Rothschilds, Heinrich Heine, a German poet, fumed that money “is more fluid than water and less steady than air.” moreThe Dutch have frightened their banksters into acting a least a little bit responsibly.
Dutch bankers' bonuses axed by people power
An online campaign has overturned ING's executive pay policy, and the mood in Amsterdam is getting increasingly militant about bonuses at bailed-out banks
Richard Wachman in Amsterdam
The Observer, Saturday 26 March 2011
Britain has a rival when it comes to bashing bankers. After a furious row over pay packages at Amsterdam-based ING in which thousands of customers threatened to make mass withdrawals, the Netherlands is now vying for the title of Europe's most bonus-hating country.
A growing Dutch political storm could end with a blanket ban on bonuses to financiers who work for institutions bailed out by the taxpayer.
ING customers mobilised on Twitter and other social networks to protest at bonuses paid to bosses at the bank, one of the biggest in the country. The threat of direct action raised the spectre of a partial run on ING, terrifying the Dutch establishment. Fred Polhout, union organiser at the bank, says: "People were outraged. We heard about the bloated sums being paid again in the City and in New York; but suddenly the issue exploded on our own front door."
Compared with the packages awarded to bankers in the US and UK, the Dutch bonuses were small potatoes. Jan Hommen, ING's chief executive, was due to receive a £1m bonus – a pittance when you consider that Stephen Hester, head of state-controlled RBS in the UK, is in line for up to £7.7m, Bob Diamond of Barclays is to collect as much as £6.5m, and some senior bankers at Goldman Sachs and JP Morgan are looking at windfalls of about £40m each.
"Perhaps we are so upset because we are a small country that prefers to set an example, rather than follow others," suggests Polhout.
So severe was the public reaction to Hommen's bonus that within days he had agreed to waive the award and told other ING directors to do the same.
Now the Netherlands is going through a painful period of introspection and soul-searching. Politicians have voted to implement a 100% retrospective tax on all bonuses paid to executives at institutions that received state aid as a result of the financial crisis. In other words, no banker should get a bonus until the debt is cleared, and they should return payments made since 2008. moreAnd wonder of wonders, the idea that the folks who figured out all those productivity gains should be entitled to have some of it paid out in shorter workweeks—especially if their paychecks are not growing.
Cut the working week to a maximum of 20 hours, urge top economists
Job sharing and increased leisure are the answer to rising unemployment, claims thinktank
Heather Stewart Saturday 7 January 2012
Britain is struggling to shrug off the credit crisis; overworked parents are stricken with guilt about barely seeing their offspring; carbon dioxide is belching into the atmosphere from our power-hungry offices and homes. In London on Wednesday, experts will gather to offer a novel solution to all of these problems at once: a shorter working week.
A thinktank, the New Economics Foundation (NEF), which has organised the event with the Centre for Analysis of Social Exclusion at the London School of Economics, argues that if everyone worked fewer hours – say, 20 or so a week – there would be more jobs to go round, employees could spend more time with their families and energy-hungry excess consumption would be curbed. Anna Coote, of NEF, said: "There's a great disequilibrium between people who have got too much paid work, and those who have got too little or none."
She argued that we need to think again about what constitutes economic success, and whether aiming to boost Britain's GDP growth rate should be the government's first priority: "Are we just living to work, and working to earn, and earning to consume? There's no evidence that if you have shorter working hours as the norm, you have a less successful economy: quite the reverse." She cited Germany and the Netherlands.
Robert Skidelsky, the Keynesian economist, who has written a forthcoming book with his son, Edward, entitled How Much Is Enough?,argued that rapid technological change means that even when the downturn is over there will be fewer jobs to go around in the years ahead. "The civilised answer should be work-sharing. The government should legislate a maximum working week."
Many economists once believed that as technology improved, boosting workers' productivity, people would choose to bank these benefits by working fewer hours and enjoying more leisure. Instead, working hours have got longer in many countries. The UK has the longest working week of any major European economy.
Skidelsky says politicians and economists need to think less about the pursuit of growth. "The real question for welfare today is not the GDP growth rate, but how income is divided." moreAnd of course, the ultimate in cultural insanity—keeping the most vigorous and energetic people in society out of the job market. If there is any single reason to give as evidence that neoliberalism is foaming, barking, insane—this is it.
The Staggering Cost Of Youth Unemployment Across Europe
Jan. 15, 2012
As countries across Europe race to take on austerity measures and cut their debt burden, its getting harder and harder for people to find jobs. And the under-25 age group is being hit the hardest.
The latest data shows that youth unemployment in the EU is staggeringly high at 22.7% and this is clearly taking a toll on the economy. The total unemployment rate in the EU is a more modest, albeit high, 9.8%.
Now, a report by the European Foundation for the Improvement of Living and Working Conditions (Eurofound), a tripartite body of the Union, has released a new report that shows how much youth without education, employment or training (NEET) costs their respective countries.
The NEET costs to the 21 EU countries included in this report is approximately €2 billion per week, a yearly total of about €100 billion, or 1% of aggregate GDP.
Note: The study has data for 21 countries. Public finance costs include welfare schemes like unemployment benefits child benefits, housing benefits, education-related allowances and others) as well as additional health, welfare and criminal justice expenditure. Public finance costs measures excess transfer - the difference between the total amount of benefits received by the NEET and the benefits received by those in employment. Resource costs include foregone earnings. more