Typically astute column by Simon Caulkin…
As Martin Wolf wrote in that well-known socialist organ the Financial Times, ‘either banking should be treated as a utility, with regulated returns, or it should be viewed as a profit-seeking industry that operates in accordance with the laws of the market, including, if necessary, mass redundancies’. Since the latter is unacceptable, he concluded, we have to move towards the former – and regulation must include pay above all.
In this context, the dire warnings from the free-market champions about the perils of interfering with today’s pay-setting methods take on a surreal air. If companies and shareholders really are ‘better at setting salaries than bureaucrats’, as The Economist affirms, given that ‘better’ has resulted in the almost complete meltdown of the global financial system, what, please, would ‘worse’ look like?
I’m glad he picked up the absurdity of the Economist’s frantic attempt to straddle the chasm between admitting the colossal screw-up that the banks have managed and avoiding the inescapable conclusions to be drawn from it.