Goldman-Sachs Vice-Chairman to World: Fuck You

[Instant Sunrise]

The Guardian

Public must learn to 'tolerate the inequality' of bonuses, says Goldman Sachs vice-chairman

Bankers' soaring pay is an investment in the economy, Lord Griffiths tells public meeting on City morality

Conservative peer Lord Griffiths said banks should not be ashamed of rewarding staff.

One of the City's leading figures has suggested that inequality created by bankers' huge salaries is a price worth paying for greater prosperity.

In remarks that will fuel the row around excessive pay, Lord Griffiths, vice-chairman of Goldman Sachs International and a former adviser to Margaret Thatcher, said banks should not be ashamed of rewarding their staff.

Speaking to an audience at St Paul's Cathedral in London about morality in the marketplace last night, Griffiths said the British public should "tolerate the inequality as a way to achieve greater prosperity for all".

He added that he knew what inequality felt like after spending his childhood in a mining town in Wales. Both his grandfathers were miners who had to retire from work through injury.

With public anger mounting at the forecast of bumper bonuses for bankers only a year after the industry was rescued by the taxpayer, he said bankers' bonuses should be seen as part of a longer-term investment in Britain's economy. "I believe that we should be thinking about the medium-term common good, not the short-term common good ... We should not, therefore, be ashamed of offering compensation in an internationally competitive market which ensures the bank businesses here and employs British people," he said.

Griffiths said that many banks would relocate abroad if the government cracked down on bonus culture. "If we said we're not going to have as big bonuses or the same bonuses as last year, I think then you'd find that lots of City firms could easily hive off their operations to Switzerland or the far east," he said.

Goldman Sachs is currently on track to pay the biggest ever bonuses to its 31,700 employees after raking in profits at a rate of $35m (£21m) a day.

The Centre for Economics and Business Research (CEBR) said today that City bonuses could soar to £6bn this year.

The chairman of the Financial Services Authority (FSA), Lord Turner, who was also present at the meeting, called once again for a global tax on financial transactions. He said that such a so-called "Tobin tax" could redistribute bank profits to help fight world poverty and climate change.

"The role of regulation is to bring a concordance between private actions and beneficial results," he said.

This asshole really just speaks for himself. "Fuck you I'll do what I want, otherwise I am taking my ball and GOING HOME."

[Darth Wong]

I'm sick and tired of being told that we have to let rich people (in this case, bankers) get away with bloody murder because they'll take their precious selves elsewhere if we don't. Who said these assholes are a net positive to society if we aren't allowed to tax them or even regulate them? If that's what it takes to keep them here, what's the point?

They basically say: "I want society to serve me while I give nothing back, and if you don't give me that, then I will take my contributions elsewhere". What contributions? Are they saying that the country would have no financial services if they left, even assuming that they can leave? Why couldn't we just regulate overseas banking, which is a well-known method of tax cheating anyway?

[Nieztchean Uber-Amoeba]

This is kind of a funny thread, since it Griffins' statements have already been posted, in Off-Topic, and Darth Wong posted in that thread as well, and the mood of that thread was rather extraordinarily different.

[General Zod]

I'm sick and tired of being told that we have to let rich people (in this case, bankers) get away with bloody murder because they'll take their precious selves elsewhere if we don't. Who said these assholes are a net positive to society if we aren't allowed to tax them or even regulate them? If that's what it takes to keep them here, what's the point?

They basically say: "I want society to serve me while I give nothing back, and if you don't give me that, then I will take my contributions elsewhere". What contributions? Are they saying that the country would have no financial services if they left, even assuming that they can leave? Why couldn't we just regulate overseas banking, which is a well-known method of tax cheating anyway?

The hilarious thing is Switzerland has been a lot more open about helping nail tax dodgers in the last few years anyway, so pretty much their only option would be to move to some far eastern shithole. I'd be surprised if their threats actually had any teeth behind them given all the creature comforts they'd have to give up.

[Instant Sunrise]

Well, if the Cayman Islands and oil refineries in Africa are any indication, it would be a walled-off fiefdom with a lot of the money going towards a private security force. You know, so that none of that money would actually trickle down into the local economy.

Basically, ex-pat communities are horrible places.

[Darth Wong]

This is kind of a funny thread, since it Griffins' statements have already been posted, in Off-Topic, and Darth Wong posted in that thread as well, and the mood of that thread was rather extraordinarily different.

The "mood" of the thread? What the fuck are you talking about? Nothing said in that thread contradicts this one.

[Darth Wong]

I just found a quote about CEO salaries which was amusing enough to make it the Quote of the Week:

The salary of the chief executive of the large corporation is not a market award for achievement. It is frequently in the nature of a warm personal gesture by the individual to himself.

[[R_H]]

The hilarious thing is Switzerland has been a lot more open about helping nail tax dodgers in the last few years anyway, so pretty much their only option would be to move to some far eastern shithole. I'd be surprised if their threats actually had any teeth behind them given all the creature comforts they'd have to give up.

Plus, flat rate taxation (probably the primary reason why rich foreigners move here) doesn't look like it's going to be around much longer.

[Grif]

...bankers' bonuses should be seen as part of a longer-term investment in Britain's economy. "I believe that we should be thinking about the medium-term common good, not the short-term common good ...

Okay, I fail to comprehend this part. What kind of common good could he possibly justify? (Apart from his own personal wealth)

And what way to prosperity does he mean?

[Guardsman Bass]

...bankers' bonuses should be seen as part of a longer-term investment in Britain's economy. "I believe that we should be thinking about the medium-term common good, not the short-term common good ...

Okay, I fail to comprehend this part. What kind of common good could he possibly justify? (Apart from his own personal wealth)

And what way to prosperity does he mean?

He means that if potential banking executives are offered top notch salaries and bonuses, they'll be able to at least theoretically draw the best such people to Great Britain, where in theory they'll result in a more productive financial sector (which would presumably be good for Great Britain, since it was one of the few private sector areas that actually generated net new jobs over the past 7-8 years).

You can't entirely ignore it, either. Capital just has enormous exit power in the current system (since land can't move, and people are generally restricted in their movements in terms of migration versus tourism), and so these bastards can always wave the threat of capital flight if we don't create what they consider a favorable environment.

[bobalot]

He means that if potential banking executives are offered top notch salaries and bonuses, they'll be able to at least theoretically draw the best such people to Great Britain, where in theory they'll result in a more productive financial sector (which would presumably be good for Great Britain, since it was one of the few private sector areas that actually generated net new jobs over the past 7-8 years).

I have always been sceptical of these types of claims. Where is the proof that it will theoretically draw the best and brightest? These types of claims are based on assumptions which simply have no evidence.

Wouldn’t these enormous salaries theoretically draw everybody? Surely a significant proportion of these people will be using 'old boys' connections and simple outright bullshitting to get these jobs?

These people were paid at times literally tens of millions of pounds, and still managed to totally fuck the entire British economy and people still assume that using the same bonus schemes as before will attract the 'best and brightest'?

Surely, the only conclusion we can draw from our experience with these schemes is that they encourage short term thinking and massive risk taking and do not necessarily attract the 'best and brightest'?

Is economics the only 'science' where emperical results are simply ignored?

[ThomasP]

What I'd like to know is how much these guys actually contribute to real innovation and real economic growth, versus simply building some kind of imaginary wealth-on-paper by fiddling with financial transactions.

It would seem pretty obvious that innovation and growth require access to capital in order to thrive, but what's not quite so clear is 1) why this demands a largely centralized financial cartel, and 2) why that in turn demands "talent", when talent doesn't really seem to correlate with actual economic development except in the most tangential sense.

In other words, if we replaced the existing financial structure with something not quite so monolithic and arcane, who's to say that everyone wouldn't benefit from that? Excluding the current crop of plutocrats, at least.

[Gramzamber]

These assholes are just so convinced that they're so talented that any other country would want them, and feel they can continually threaten to leave if they don't get their money.
I wish we could all just call their bluff and send them on their way, who the hell needs these inept fools anyway? They dragged the economy into the gutter in the first place.

[Rye]

This is kind of a funny thread, since it Griffins' statements have already been posted, in Off-Topic, and Darth Wong posted in that thread as well, and the mood of that thread was rather extraordinarily different.

That thread addressed broad-scale fiscal inequality across society, not individuals rewarding themselves and writing losses off against tax, like these shitbags are doing. In short, the idea is meant to go that if you work harder, you deserve more money, and if you're jealous of someone who's got better stuff, you worker harder to correct it. This, meanwhile, has bankers saying that even though society prevented them from mass suicide, they don't owe anything back because they're so important. The rest of us should just "deal with it *smugdog*" as a function of the economic carrot and stick, because it is their market-given right to buttfuck us all over a barrel and make us pay for the privilege.

If it were up to me, I would make an international summit where governments agree to force the bankers to a) pay back everyone with the profits and bonuses they're generating, and b) change long term achievement-related money in the banking system a timelocked thing that forces them to play long-term. That way no country gets the hypothetical competitive edge over the others (without some sort of international punishment) and the bankers are mass-fucked back in the interests of everyone. It really is beyond a joke how crass they're being.

[PainRack]

Doesn't economic theory argue that inequality can be good for society via pricing mechanisms and value?

[The Yosemite Bear]

but Ms. Rand said that the whole rest of humanity are a bunch of parasites....

they could all move to some fiefdom in Colorado, or an undersea city.....

[dragon]

I don't mind people making money off hard work and being in those positions is hard and very stressful. But some of these bonuses these people get are a little to extreme. Especially the ones that get millions after the company goes into chapter 11 Bankruptcy.

But then major sport players making tens of millions become a role model and getting arrested at the same time is a bit ridiculous as well.

[Darth Fanboy]

But then major sport players making tens of millions become a role model and getting arrested at the same time is a bit ridiculous as well.

At least with professional athletes it is easier to tell who actually has the most talent and who brings in the most money and fans. With these executives you get claims of how important they are with few tangible things to judge them on.

[General Trelane (Retired)]

With these executives you get claims of how important they are with few tangible things to judge them on.

And with those things we can judge them on, a roll-back of their bonuses should be the least of their worries. They should be happy they still have their jobs.

[phongn]

I just found a quote about CEO salaries which was amusing enough to make it the Quote of the Week:

The salary of the chief executive of the large corporation is not a market award for achievement. It is frequently in the nature of a warm personal gesture by the individual to himself.

These days it's not just that - it's a warm personal gesture by the board to itself.

[CJvR]

The Swedish bank-aid program specificly banned any and all bonuses for the management of any bank turning up with a beggers bowl. The SE-Bank directors tried to dodge it by giving themselves pay raises of 10-25% but was caught and roasted in the media, rather amusing.

[Samuel]

Doesn't economic theory argue that inequality can be good for society via pricing mechanisms and value?

Yeah, it helps encourage people to work harder and clearly sets which jobs are more important (aka fewer people are capable of doing them so the incentive needs to be put foward).

The problem is that after a certain point it stops being about that and more about a game with the other rich to see who can have the largest pile of cash.

[Patrick Degan]

The problem is that after a certain point it stops being about that and more about a game with the other rich to see who can have the largest pile of cash.

To paraphrase Ellis Peters: after a certain point, money just becomes trash.