Sunday, 13 December 2009

Brown's Got Form

There is something truly horrible about the Brown Labour regime's dividing lines. When an authoritarian , big state party starts to place blame on a particular group in a society for the failure of its policies, politico-historical antennae twitch. When the sector of society chosen as the target evil-doers are decried as toffs and bankers the antennae begin to tune into messages. When the targets are caricatured by derisive, grinning Party members wearing top hats and formal dress, then political cartoons from the 20th century lampooning another group of bankers, of toffs, of the rich in top hats and formal dress, set beyond the dividing lines in other authoritarian states, come to mind.

The German Chancellor considers that it might be unconstitutional to seek to lay extra taxes on bonuses. Germany has no plan to tax bonuses in the manner Brown is using. Brown announced a one-time 50 percent tax on bonuses of more than £25,000 pounds last week, in pursuit of a peculiarly disturbing attitude that some sorts of earnings by some sorts of people in England should be singled out for punitive action. This brownian pandering to class and cultural aggression is, too, wholly out of keeping with upholding the Basel, Financial Stability Board self-discipline accords, which:

'discourage bonus guarantees longer than one year, encourage companies to defer bonuses for senior executives and other key employees and enable pay to be clawed back if losses occur at a later date.' (Bloomberg). Wolfgang Schaeuble, the German Finance Minister, said two days ago that:

'German financial institutions including Deutsche Bank, Commerzbank AG and Allianz SE, agreed to uphold the Group of 20’s so-called self-discipline accord, rather than resort to a new tax...' .

Regulators, central banks and investors all “need to take some responsibility,” the chairman of Morgan Stanley told Bloomberg Television in Berlin. Taxing the pay of bankers “doesn’t convey a sense of shared responsibility.” (Bloomberg)

Brown doesn't do 'take responsibility', nor sharing responsibility. Not even when he, personally, wrecked the regulation of financial behaviour in the United Kingdom. Brown does channeling blame to others, even when that involves encouraging a politics of dividing lines that puts some people beyond the pale. Last time it was British jobs for British workers; who is Brown whistling to now?


Caronte said...

Managerial bonuses in all their forms (options etc.) are neither determined by the market for managerial talent, nor by managerial performance. They are fixed on a reciprocal, non competitive basis, by managers for the benefit of other managers. And they are granted often by a failing company to the very people who are responsible for bankrupting it.

Therefore there is absolutely nothing the matter for the government to seek to claw back those ill-gotten gains through special, ad hoc taxation. If plumbers' earnings were determined by plumbers on the same basis - which they are not, though sometimes it might look as if they are - the same case would apply to them.

Believe me, I am no friend of Gordon Brown or supporter of global progressive governance, but I am firmly convinced that the sooner those gains are squeezed out of those fat cats the better.

roym said...

the german stance seems to be yet more beggar thy neighbour. even the french are doing it!