Not that we should be surprised, but a feature in today’s Guardian called “Bankers rage at G20 ‘Witch Hunt’” carries the following quote from investment banker Larry Schechter.
“While I do not believe in rewards for failure, I do not think it is right for good, successful bankers and corporate finance executives to be shot for the sins of others,” Schechter said. “The free market economy is based on risk versus reward and if you remove the incentive, then you run the risk of removing the creativity.”
Um, isn’t this entirely wrong? You know, the thinking that led us to the whole sorry mess of nearly every bank in the UK being technically insolvent? The free market is not about encouraging risk, it’s about ensuring a level playing field with no barriers to entry. The fact is that the ‘free market’ we have almost always protects vested interests – and people at the top to reward themselves with huge amounts of other people’s money – therefore regulation is the only way of trying to even things out. ‘Let the market decide’ is one of those lazy cliches which no-one ever seems to want to question…
Sadly I don’t believe any amount of regulation or public outcry will change what we have now. Stable doors, horses bolted and all that. There’s a whole generation of bankers who were taught that banking is about risk-taking rather than boring old stewardship of resources, and they can’t ‘unlearn’ that. Give it a couple of years after the recession is over and the nation will almost certainly be back to believing the same people when they tell us the good times will never end.
In other news, Obama talking about nuclear disarmament? Where the hell did that come from, and good luck to him actually pushing any of these ideas through.