Liz Truss's bankers' bonus plan signals return to culture of greed that caused the 2008 financial crash – Kenny MacAskill MP
Lifting the cap on bankers’ bonuses is a microcosm of the insanity matched with hedonism that defines the Truss regime.
Interest rates are rising, the pound’s tanking, and energy costs are soaring for the many, yet it’s to be party time once again for the few.
It'll have the same effect that Pinochet had in Chile when he adopted the dogma of the so-called “Chicago school” of economists. Businesses folded, unemployment rocketed and the economy crashed, but a few people got very wealthy indeed.
We’ve been there before. When Thatcher unleashed the City, it didn’t see wealth trickle down and the country enhanced. Instead, areas were left to rot, and drugs and alcohol flowed in, where there had once been work and vibrant communities.
Some got spectacularly rich and seemed to believe the hype about their almost God-like status. They could do no wrong. They deserved everything they got because of their innate talent – Champagne lifestyles and, figuratively if not literally, flashing fivers in the face of the poor.
It’s well documented, as well as still being evident all around, in devastated lives and communities, contrasted with the opulence that exists in London or elsewhere.
Anyone who’s watched The Inside Job, a film narrated by Matt Damon, will know just how the greed and avarice of the few brought misery to the many in the 2008 financial crash.
It wasn’t mistakes or bad luck. It was deliberate actions, trading what was known to be trash, yet persuading the trustees of public sector pension funds to invest in them. There were bonuses aplenty for some City spivs but vastly reduced benefits for hard-working and low-paid staff.
The movie tells how investigators in the US noted that some financial documents were marked “POS” in pencil but didn’t know what it related to. It turned out to be Wall Street traders’ notes that the product was a “piece of sh**”, though it didn’t stop them cashing in by selling it to people who had faith in them. Anyone wanting to see what went on should watch the documentary. It explains the fraud and deception.
It wasn’t just in New York but in London and even in Edinburgh. Ian Fraser’s excellent book, Shredded, explains the greed and avarice that laid RBS low. There was appalling dishonesty as well. Low-paid staff, loyal to an institution they’d worked in for years, were encouraged to buy shares by bosses who knew the empire was crumbling.
Good businesses were put under, charities emptied of their capital and staff robbed of their nest egg for retiral. It was deliberate and it was known. It’s not just heads that should have rolled but prosecutions that should have followed.
But all that’s to be restored as the solution to the post-Brexit economic crisis. It’ll end in disaster this time as it did before. This is fin de siecle stuff, the UK is breaking down and breaking up.
What a mess, no wonder Scotland needs to escape this delusional Ruritania.
Kenny MacAskill is Alba Party MP for East Lothian
Want to join the conversation? Please or to comment on this article.