The bonus season comes around

It must be wonderful to own a business that the government has decided is too important to fail, wonderful and very comforting. Such businesses are usually so massive that they are never owned by a single person or even a small group of people. If you cannot own such a business the next best thing must be to be employed in a senior position in such a business, where your perceived value to the business is heavily rewarded.

Of course I am writing about the banks. The UK major banks received a subsidy of £50 billion in 2008 and £100 billion in 2008, according to the Bank of England. They needed these subsidies because they had made losses on such a scale that without the subsidy the banks would have failed and when they failed, thought the government, they would drag down the economy into massive turmoil (there has been turmoil since 2008 in any event) and depression.

Without such massive government subsidy these loss making banks would be no more. What is astonishing is that the banks will be paying bonuses to so called talented employees before the banks have repaid their debts to the government – or perhaps I should write more accurately – until they have repaid their debts to the taxpayer. Continue reading