Tag Archives: nick clegg

Nick Clegg’s leader’s speech to the party’s Harrogate spring conference contained a section where he gave the top-end bankers a good metaphorical kicking.

Personally I no sympathy for them. We will never live in an ideal world but, if we did, people would get paid according to what they contribute to society rather than the crude mechanism of what the market dictates. By that criterion, I have always believed that bankers are paid too much. The only thing you can realistically do to mitigate that is to tax them disproportionately so that at least that money can be spent on improving public services and benefit society as a whole.

However we do not live in an ideal world, and taxing people at the top end does not necessarily deliver the extra revenue, and there is no point in taxing people more simply to punish them with nothing in return. So let’s tax the rich by all means, but lets also take into account their cunning guile in avoiding paying up.

Today we see that paying people too much is not only unfair, it is also counter-productive. So Nick Clegg received a hearty round of applause for laying into them. No doubt he was hoping his outspoken attacks will hit the headlines and bring popularity to the Liberal Democrats. I hope it does … but in some ways he is missing the point.

The reason why bankers behaved irresponsibly was no doubt encouraged by “greed” – something which we are now all firmly against, but it was also encouraged by market forces. Many people caught up in the banking shambles were perfectly decent people, but they were simply doing what everyone else was doing and did not consider the consequences of their actions.

Of course they should have done, and possibly a few did, but it was not what they were paid to do.

There had been concern about the level of debt for many years, but as the years went by and growth continued it became easier to believe that the laws of economics had changed and that it was not only possible to go for short-term profits and not worry about the long-term consequences, but that the long-term consequences could somehow look after themselves.

Even on this forum I remember debating with fair-minded Liberal Democrats who believed that the level of debt was sustainable. My own opinions contrary to that were not based on my personal genius for understanding economics, but the arguments put forward by John Gary, Vince Cable and others that, at a simple level, growth fuelled by debt did not make sense and was bound to end in tears. I was expecting economic collapse year after year, and I really wonder today why it took so long.