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Ben Chu: Everybody needs good banking neighbours

Posted by Eagle Eye
  • Tuesday, 8 December 2009 at 02:50 pm
I hope that the reports that Alistair Darling is planning a windfall tax on bankers' bonuses are true. Just to make it clear, I'm in favour of free markets, but not in favour of the sort of bastardised capitalism in which politically privileged industries take huge subsidies from the state and turn them into sky-high private remuneration.

But this nugget in Rachel Sylvester's
column in The Times about the Chancellor's approach doesn't fill me with confidence over how mentally equipped Darling is for the battle:

"He once told me that boardrooms should apply the “next-door neighbour test” and consider whether they could justify high pay over the garden fence"

What sort of world does he imagine these people live in?

2638540, Getty Images /Hulton Archive
"How big was your bonus this Christmas, Ms Goldman Sachs?"

But there's a more serious point made
by Robert Reich, the former US Labor Secretary, with reference to the Obama Administration's softly-softly approach to the bankers on the other side of the Atlantic.

"Shame? If we've learned anything over the last year, it's that Wall Street has none...Shame won't work. Only political muscle and courage will."

It's a lesson Darling needs to learn with regard to the City - and fast.

photo: Getty Images


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