Tuesday, February 10, 2009

Blame the shepherd, not the wolf

I can't believe the BBC are scapegoating the bankers. Looks like the UK Government is trying to pull the wool over everyone's eyes by making it seem like the fault of the greedy bankers and their excessive profiteering and bonus-awards, taking advantage of the public outrage at the bankers being awarded such large bonuses using tax-payer bail-out money.

Okay, so the bankers are not going to be popular folk heroes, but the Government shouldn't be allowed to make it look like it's not actually the Government's fault. It is the Government's fault.

Face it, bankers are employed by corporations to make as much profit as possible in the next reporting period (a year, a quarter, whatever). They are not incentivised to look after the long term interests of the bank that employs them, or the nation as a whole. So of course they behaved in the way that they did. Unless they did something illegal then there is nothing for them to apologise for!

It's like blaming the wolf for eating the sheep that have been left out there in the field. It's in their nature; you can't blame them for that. The finger of blame should be pointed, in this analogy, to the shepherd, whose responsibility it was to look after the sheep.

And so it is the financial regulators (i.e. the Treasury, as the FSA doesn't actually have the teeth) that we must blame for the financial problems the UK is currently undergoing. And the financial regulators are appointed by the Government.

We cannot even blame the bank bosses for going to the Treasury asking for a bail-out. They presented a simple choice to the Treasury, telling them that their companies would collapse if they didn't get an injection of money, and would the Treasury like to take the opportunity to do so in the interests of the UK economy? Seems fair enough. And again the Treasury, and ultimately the Government, failed the UK population by just handing over a huge wad of cash without placing on it certain conditions, or even going as far as nationalising them.

So, we shouldn't accept the bankers as scapegoats, thereby absolving any culpability of the Government or the BBC's beloved over-borrowed consumer who was stupid enough to buy or remortgage an overpriced house, or take out any other forms of credit that they simply cannot afford to pay back.

Don't be fooled.