This is Ligonier's friendly neighborhood blog and an attempt to recapture our lively opinionated debates in a free speech zone.

Please join our conversations. Contributors welcome.

Sunday, November 16, 2014

Bankers go from scoundrels to heroes...someday

"Like most people, I sometimes feel that we live in a world where the absurd and the cruel are not only accepted but barely remarked upon. At a time when, as a result of the recent banking catastrophe, people all over the world are suffering the longest squeeze on living standards since before the second world war, when record numbers rely on food banks to survive and cuts in spending on flood defences have exacerbated the pain caused by the wettest January in 250 years, the financial sector is handing out billions in bonuses as though the economic crisis never happened. This year the total bonus pool since the 2008 crash will break through the £80bn barrier – around three and a half times the amount banks have paid in Corporation tax and the bank levy (pdf). That's about £1,250 for every man woman and child in the UK.(On top of their incredible salaries.)

These figures are alarming. Not because I have anything against bankers – who I am sure on average are no more or less agreeable than actors or biochemists – but because of the injustice that lies behind them. Having been bailed out to the tune of several trillion dollars worldwide, the current situation where huge sums of money remain untaxed is bewildering. It seems to me a fundamental question of fairness that all elements of society should be equally responsible for the protection of hospitals and the less advantaged everywhere.

Fortunately there is a simple way to ensure this happens – a tiny tax on share, bond and derivative transactions carried out by banks and hedge funds known as a financial transaction tax or Robin Hood tax. Eleven European countries – including Germany, France, Italy and Spain – are currently negotiating such a tax, with the latest round of talks taking place this week. The UK government not only opposes such suggestions but is actually going to the European court of justice in order that the City of London be exempt."

(N.B., Thanks to Bill Nighy, one of the greatest actors we have, who wrote the piece excerpted here and stars in the above video.)