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US Banks Veto 'Socialist Pay' in Secret Talks
America's top bankers quashed attempts by their British counterparts to persuade the industry to bring down salaries in response to public outrage after the world's governments spent billions rescuing the system.
Chief executives from the world's banks discussed the plans at a secret dinner held at Claridge's, the London hotel, last October, at which several leading British bankers are said to have suggested that the sector should take greater responsibility for its part in the crash, and do more to reduce the vast bonuses paid to staff.
But the recommendations were met by stiff opposition from the US banks JP Morgan, Morgan Stanley and Goldman Sachs, according to one source. "Some of the US bankers were furious about attempts to reduce pay throughout the industry, arguing that any such move smacked of socialism and would be fiercely resisted," the source said on Friday. "It's not the way the Americans like to go about their business."
The bankers meet twice a year for industry talks. But following the public's growing anger at high-level bonuses despite government bail-outs, salaries were at the top of the agenda at the meeting. The source said: "There were several bankers present who believe that if the industry worked together to agree that pay levels - and bonuses - should come down it would work in the interests of all, because it would cut back overall costs at such a sensitive time. Oddly enough, even the top bankers don't like paying out so much.
"The situation is made worse by the constant merry-go-round of banks poaching staff from each other, pushing up the costs for all. This was not just about trying to respond to the public anger but a genuine attempt to reform how the industry rewards itself."
Until the crash, most investment banks typically paid out more than half of revenues in pay but pressure from shareholders and the public has forced most of them to bring down these ratios to between 30 per cent and 40 per cent. They are also paying more in shares rather than cash under pressure from the new guidelines being set by the G20 and the Financial Stability Forum.
Barclays' chairman, Marcus Agius, and its chief executive, John Varley, plus executives from Royal Bank of Scotland, Lloyds and HSBC, attended the dinner and are understood to have supported the move to reduce pay. Barclays has been particularly quick to respond to the public mood over bankers' pay, arguing that the industry must face up the "political brick-bats". It did not receive direct state-aid during the 2008 rescue operation but it did benefit from the quantitative easing program which pumped billions of liquidity into the system.
Mr Varley and Bob Diamond, the president of Barclays Capital, refused bonuses last year. Details of the secret talks follow another week of bonus anger after the news that RBS is paying out £1.3bn in bonuses to 16,000 staff - including £1m each to 100 bankers - even though it lost £3.6bn last year.
84 Comments so far
Show All"Some of the US bankers were furious about attempts to reduce pay throughout the industry, arguing that any such move smacked of socialism and would be fiercely resisted,"
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And a $13 trillion bailout is capitalism?
The depths of hypocrisy are unfathomable. And the level of acceptance of the hypocrisy is grotesque.
Yes it is. This is how capitalism works. Glass-Steagal, a "socialist" Depression era regulation (repealed in 1999 under Clinton) separating commercial from speculative banking would have gone a long way in preventing the "financial crisis" but regulation must be eliminated as it inhibits capitalism's "pure" functioning, inhibits the "magic of the market", inhibits its true nature - all memes of the corporate orthodoxy. Capitalism is not represented in the small business, the "Mom-and-Pop", but rather big business: the transnational corporation, the conglomerate and the monopoly. It's the difference between the petit bourgeoisie and the bourgeoisie. It's the big guys (the bourgeoisie) that set the rules and run the show. They represent and define capitalism, not the little entrepreneur - they are just wanna-be's.
It's hard to beat the Michael Moore quote:
"Capitalism is evil and you can't reform evil."
Tom Larsen
"Glass-Steagal, a "socialist" Depression era regulation (repealed in 1999 under Clinton) separating commercial from speculative banking would have gone a long way in preventing the "financial crisis"
It would have made it virtually impossible. And till its reinstalled we do not have a capitalist economy.
I'd be more inclined to listen the Michael Moore's of the world if they weren't profiting immensely from the system they criticize and living the good life in their gated communities. He and Al Gore are birds of a feather.
RE: And till its reinstalled we do not have a capitalist economy.
You seem to have a idyllic view of capitalism. You have not read Marx.
RE: He and Al Gore are birds of a feather.
No they are not. Al Gore would never criticize the hand that feeds, Moore does. At the end of "An Inconvenient Truth" Gore's solution was to buy energy efficient light bulbs. An absurd solution given the scale of the problem described in the film, but typical of liberal reformism. MM wants to take down the system. Liberals and radicals may agree on the problem - but never the solution.
"MM wants to take down the system"
But he gets such a great distribution deal from the current system. Why would he want to change that?
He's a celebrity for saying things that every college freshman knows on the big screen. What an inspiration.
RE: He's a celebrity for saying things that every college freshman knows on the big screen. What an inspiration.
Wrong on several accounts. Not a college freshman (they don't know anything) but something anybody stuck working in a dead-end job knows. MM tells stories of working class people that the MSM won't tell. That's why his films attract so many people to them. The struggles (and their systemic origins) of working people, that is most of the population, are shut out in America. His films are an attempt to correct that. And that is why he is inspirational. What do you have against MM anyway, that the success of his films has made his life a little more comfortable? If his "wealth" makes you angry shouldn't you be a lot more angry at ruling class elites such as Bill Gates, or even Al Gore? Do you criticize MM for exposing, corrupt corporations, our culture of violence, healthcare for profit not health, and our totally vicious economic system? Where are your priorities?
'MM tells stories of working class people that the MSM won't tell. That's why his films attract so many people to them."
No. His films attract a lot of people because - in the suburban media world - there is no way of hearing these stories directly from working class people themselves. We are all living in our own private bubbles now.
Into this void of social contact falls all types of media, both mainstream and non-mainstream.
Michael Moore benefits from the social retardation of American suburban existence by selling the masses "the stories" that they used to hear for free. And the fact that this "direct contact" has been shattered by highways and zoning laws, means that resistance to control really is futile. The only "resistance" that you can engage in - without the social capital that has been lost to suburban progress - is to rent an angry movie and laugh along with MM or some other media clown.
He is a celebrity playing the role of a working class stiff. Even his obesity is strategic.
MM is not my hero, but I think his films have provided a much needed counter to the MSM.
It seems to me that your criticism of MM would apply to most any leftist that makes a living writing critically of our system. With this line of sectarian thinking you will create a movement populated by you and your lonesome.
no, it's about fascism.
"It's not the way the Americans like to go about their business."
You mean the "greedy traitorous capitalist pig" Amerikans, don't you?
My GAWD! When is enough, enough and why the hell didn't the government let these porkers fail?! Oh, I forgot for a second that the wealthy run the country and that has NOTHING to do with Socialism.
http://dsausa.org/pdf/widemsoc.pdf
Nothing like a bunch of pigs thinking everyone else are pigs.
Thus we see the gross difference between here in the U.S., and out in the rest of the "developed" world.
They are ethical and we are not.
I have believed for years now that the biggest problem here in American is that as a culture we have no applicable ethics... everything has become "outcome based". If you have to act unethically to achieve the desired outcome... it's OK. Just don't cross the LETTER of the law.
We value law over justice, greed over compassion, etc.
That's not my ethics or the ethics of tens of millions of Americans. The problem is that we are not in charge. Even in a nothing job, if you ever bring up an objection to a policy based on ethics, you are likely to be marginalized. On many jobs it does not matter if you are a serial killer as long as your paperwork is in order. Those at a higher level do not even have to have their paperwork in order. We give them billions of dollars and they can't / won't tell us where it went.
Nothing will change until there is a massive bump in personal courage. Tell the truth, do what's right and take the consequences. I think that those of us who are not on the brink of eviction and starvation have an obligation to change the moral tone of our neighborhoods and workplaces. And to convince one or two to go along with us. That would be a start.
Joe
"Lemon socialism" with privatised profits and socialised losses that is.There is only one socialist bank in the U.S. and that is in North Dakota.When U.S. banks play in the U.K. they should play by British rules,and visa versa.
peace
Any bank is a social institution. When banks "play" in the world they should play by our rules, we the people, "to promote general welfare", as is the purpose of any social institution. End of discussion.
Smarter, U.S. banks are well represented in government and make their own rules.Maybe some "savings and loans" and small independent banks,or cooperative credit unions still exist to promote the general welfare.Bank /holding companies just "frankly own the place"and short sell entire countries ,like Greece.Just like "players'.We the people need a return to Glass Steagall type regulations.
peace
"[L]eading British bankers (...) suggested that the sector should take greater responsibility for its part in the crash, and do more to reduce the vast bonuses paid to staff. But the recommendations were met by stiff opposition from the US banks JP Morgan, Morgan Stanley and Goldman Sachs"
Showing the color of their allegiance. Brown.
"Some of the US bankers were furious about attempts to reduce pay throughout the industry, arguing that any such move smacked of socialism."
What did US bankers call it when we the taxpayer hauled their sorry a**es out of bankruptcy? That 'smack' probably felt more like a love tap. These arrogant b**tards clearly find themselves 'too big to fail'. They remind me of the Barons along the Rhine who placed chains across it, preventing cargo from passing along it until they were paid. These guys positioned themselves along the jugular vein of the American credit markets. We pay them, or they squeeze. That's not 'free market' capitalism: that's monopoly.
Some of these highly paid bankers are going to need to start paying for bodyguards, if they aren't already.
They are already. Before the last round of bonuses were announced there was a rush of handgun permits placed by top execs, especially from Goldamn Sachs. They are well aware of public opinion and they couldn't care less.
It will again be we who do the paying.
"Some of the US bankers were furious about attempts to reduce pay throughout the industry, arguing that any such move smacked of socialism and would be fiercely resisted," the source said on Friday. "It's not the way the Americans like to go about their business."
I believe we all know how they like to do business at this point.
As Cygnus-X1-isaHole said below "And a $13 trillion bailout is capitalism?"
Fierce capitalists till it bites them in the butt. What disgusting, back stabbing, two faced, lower than Whale guano scum.
Cygnus, to answer your question for formalities sake, even though rhetorical, no its not capitalism, its socialism.
How is it "socialism"?
"STATE-Capitalism versus Capitalism" is the pair of opposites that you guys are looking for.
The machinery of the State being used to provide the underlying capital of a Capitalist system is not the same as the machinery of the State being used to put society in control of the means of production.
Mistakenly putting "socialism" into the role of opposite to "capitalism" in this situation obscures the fact that it actually represents a "third way" that is not being tried at all.
Of course, their are reasons for this, but still.
-matti.
Well said, Matti. You might find the following interesting enough to share: http://dsausa.org/pdf/widemsoc.pdf
Veritas February 28th, 2010 12:22 pm
"What disgusting, back stabbing, two faced, lower than Whale guano scum."
Veritas February 26th, 2010 10:39 am
"Your incivility certainly becomes you."
We can't even publicly laugh at them because the real joke is on us.
RichM, try this link and maybe help me edumacate the "masses":
http://dsausa.org/pdf/widemsoc.pdf
RichM:
Excellent post!
I agree with you, but find getting people away from the two party system-especially away from the Democrats which many think is their only hope, a monumental task. Too many are still afraid of "changing" political affiliations and becoming active in alternative political parties with egalitarian platforms as they parrot the party line of a "wasted vote."
I don't think the difference is so much between the bankers as the people of the countries. I think the banks in other countries are taking steps to fend off regulations. Not a problem here. The corporate mafia owns the place and Americans just take it up the tailpipe. And if they get mad enough at the paid off Democrats they will just run to the paid off Republicans. Americans are like a flock of sheep, running back and forth between two packs of wolves who take turns fleecing them. And aren't those Republicans pissed that the Democrats are having their turn at the corporate trough.
When the people fear their government there is tyranny,
when the government fears the people there is liberty.
~ Thomas Jefferson
BeForKids:
Absolutely so! Your one paragraph sums up the American mentality in supporting the same group that subdivides itself into two political parties giving the easily manipulated public the illusion of different "values" and ways to legislate and proceed with "the people's business." What people?
Well said!
Who needs bankers now that we have calculators?
Who needs banks when we have so little money, and the banks no longer help our money grow?
Socialism is the magic word, Say it like ya mean it and it will mean the opposite to the other....
socialism is still a mystery... a loaded one. America has several generations of mind control to overcome.... have a little pity.
In the meantime I'll take populism and common sense as more functional terms when it comes to practical understanding. All economies are mixed so when we label so generally the fundamental truth (balance) is obscured because it is a punching bag word...
life is a Bitch.
Here is the difference between the European Banksters and the American ones.
In America you can get away with murder if the victim is a Socialist, in Europe it would still be murder.
Just in case you missed the other one:
http://dsausa.org/pdf/widemsoc.pdf
If it talks like a thief, walks like a thief, stinks like a thief...it's a thief.
Kucinich2012 thank you for that site. Friends of mine just don't get it. That is very helpful. The world is full of a belief in extreme-ist rhetoric and it it so simple when one looks at the logical and sane way of doing things. I reflect on Captain Pickard's comment to Lilly in First Contact about how the world finally realized that we don't have to have superrich and superwars when there is so much to do and so many places to see, and such a wonderful place this paradise could be.
There are attempts by the Governmnets of the World to form a fund wherein taxes are collected off the profits of banks the World over and pooled so as to act as a reserve in case of another financial crisis.
Some Countries are opposed to this including Canada's Stephen Harper.
Here I must agree with Mr Harper. All such a fund would do is take profits from sound banking systems that are well regulated and shift those into the crooks and thieves that are in charge of the US banking system.
Indeed this latest crisis shows how Globalization puts every economy in the world at risk. The banking systems in Europe faltered because of what was happening in the USA.
Come on GW, the banking systems in Europe faltered because of what the banking systems in Europe were doing.
Our banksters may have invented the crooked methods and patterns, but the rest of the world happily fell to using them and profiting.
There are as many crooks and thieves in the banking system's of, yes, Canada and the rest of the world as there are here.
Globalization is an invention of Corporations to cover their thefts and depredations, there is no Global community, no Global economy nor any Global government. Nor will there be.
You show a profound misunderstanding of how the systems in Europe collapsed. Given your adulation of Capitalism this to be expected.
The banks in Europe that collapsed and had to be bailed out invested in the Same Securities the United States of America was trying to hawk all over the world. This rated AAA+ securities were bought up by banks the world over.
Goldman Sachs and other such institutions collatarized debt. They had the phony ratings agencies in the USA rate these as triple AAA+ . Those debt interests were then sold to banks worldwide.
They were GARBAGE . Certainly they played on the greed of the European banks. But the garbage was manufactured in the USA which next to arms is about all they make these days.
It's time to take back those things that we should be in charge of, not kowtowing to. We should start with the banks.
There is NO excuse for this kind of behavior, and it's not like the first time that bankers have screwed this country. The previous times, regulations were put in place to keep those vermin honest. Removal of those regulations resulted in EXACTLY the same kind of behavior that caused those regulations in the first place. SURPRISE! Greed doesn't change over generations, it's ALWAYS the same. It's time to put those very same regulations back into place, and if the bankers don't like it, then nationalize the banks, and fire every single one of the CEOs of those banks.
They have shown that they don't give a damn about our welfare, I say it's time they get that kind of treatment right back. Confiscate every penny they have, and then let's see how quickly they pull themselves up by their own GD bootstraps.
class war.
usa class war from bottom up?
or just talk about 'third parties' some more?
heard that over and over in the early 80's
a 'leninist' solution...as in wait for some fucking leftist leader?
it's a corporate state..and mass murdering state...and
we are responsible.Ask the million dead iraq's for redemption in our pleading for
people to 'vote' more or hold up more signs.
destroy it...we have nothing to lose but our lives....a small price to pay since we are groveling and begging the length of them, and paying banks interest..... anyway....
bottom up.
those who appear great to us, only appear so, because we are on our knees, rise up
said James connelly
http://tommys1961.wordpress.com/ "Holler From The Rooftops"
Do you mean James Connolly?
Joe
Hmmm, When I was in the Far East, an Indonesian friend told me about the, I believe, Sukarno revolution. He said the first things attacked were the chinese loan sharks and bankers that owned most of Indonesia through loans, mortgages, etc. The records buildings were torn down and the contents burned to ashes. The bankers and sharks were killed by the people. For a while, apparently, you could almost walk across rivers on the corpses.
When discussing how to take care of England's problems, Sir John Falstaff said, "First we kill all the attorneys." He didn't take it far enough. He should have included bankers. It might not solve the problem, but it would at least make the blood sucking parasites stay out of sight for a while.
Many years ago I defined the Republican GOP as meaning "Greedy Old Parasites." Unfortunately, so are the alleged Democrats.
Remember to drip!
Don't
Reelect
Incumbent
Politicians
Stay away from the out of office wannabes, too. Borrow Diogenes' lamp and search for an honest man.
tommys 1961
There are many americans who don't care about the Iraqi's situation-caused by us... they only see the world they live in. They have not figured out the connection between us all and if many of them did, they wouldn't care. They only care that they get there little middle class house, their car, (suv) and some beer in the frig with their kids in foot ball.
yes, I know I am really over generalizing here, but I have talked to many who think this way... When I try to go into any detail or give them info to read or a source of their own to put the story together, they look at me with wide blank eyes. They donot want to understand and many people think that I am "wierd" or strange or just some smart person who likes to read. I'm not that smart. If I was I would have understood this stuff a lot better say, 20 yrs ago...or more. It takes a lot of work to understand how everything is linked and then to know who is telling the truth and who isn't-who is screwing up the system with their greed.
so what? I grew up in Sandusky ohio in the 1970's. I only had a small circle of friends that even read outside the allowed readers digest. Then I went to akron and kent and cleveland..and spent years in punk bands meeting amazing people...many are still alive and fighting the good fight...at least with their minds.....
it's no NEW story that half the country is brainwashed. The whole gov't subsidized suburbanization was MEANT to increase real estate profits and defund the cities. Even under FDR....the whites....like my family tree ....via the FHA and GI bills were funded to runaway into suburbia....where many of 'our' mothers lost their minds in the 50's and 60's I would add...and many of us turned into little vicious white supremacists. And many more say this atomization is 'normal'.....wherein...you only know two fucking neighbors..and drive everywhere. Funny how 'these' people' like to vacation in barcelona, and paris...and rome etc.
This is nothing new. This struggle. Why give up cuz half the people hate your ideas? Christ...silly little phone polls say half the country might like some 'socialism' whatever that means to americans.
THINK as if you are under a military dictatorship. HOW did the people of latin america make such gains in just 20 years.
Did they think of what 'normal people' say in idle conversation? Or did they think of their heart , and what a minority....who is right...and who may become a majority.......think and feel.....but are DISCONNECTED.,..
you must connect......organize.
A lovely poetic rant with so much factual and emotional truth, tommy1961.
Joe
That was a great posting. tommys 1961, but personally I think that the United States is no longer viable and should be broken up into several smaller countries. I don't believe that the federal system here is salvageable. If we were capable of abandoning our 18th century constitution which is full of flaws, we might adopt a parliamentary system that would work, but its clear that that isn't going to happen. There are majorities in sections of the country that favor very different sorts of polities. Some such as those in the northeast, upper midwest and west coast would, given the clear choice, opt for a social democratic system of the sort that is normal in Europe or Canada. Others would prefer to continue with the oligarchic pseudo-democratic system that we have now. I don't think we will get anywhere in terms of major reforms until we start thinking radically about breaking up the country. Smaller units would be easier to govern and easier for citizens to monitor and keep from falling into tyrannous ways. What a relief it would be to be a citizen of a small, smart country with no imperial designs or capabilities and only a will to live by its wits. That's why I'll probably end up expatriating to my adopted country in South America.
Love your post. Good stuff.
Ditto all you said, The Initiate, and if you are weird then so am I. :)