Friday, May 13, 2011
I’m Moving to Amsterdam
These people have the Flick. It was simple. They didn’t like the fact that their bailed-out banksters were getting bonuses so the people threatened to remove their money from the bank. But wait -- there’s more. Check out this article my brother pointed out.
Dutch bankers' bonuses axed by people power
”Britain has a rival when it comes to bashing bankers. After a furious row over pay packages at Amsterdam-based ING in which thousands of customers threatened to make mass withdrawals, the Netherlands is now vying for the title of Europe's most bonus-hating country.”
It’s brilliant. A bank run. Ask any banker -- a run scares them.
”Compared with the packages awarded to bankers in the US and UK, the Dutch bonuses were small potatoes. Jan Hommen, ING's chief executive, was due to receive a £1m bonus – a pittance when you consider that Stephen Hester, head of state-controlled RBS in the UK, is in line for up to £7.7m, Bob Diamond of Barclays is to collect as much as £6.5m, and some senior bankers at Goldman Sachs and JP Morgan are looking at windfalls of about £40m each.”
I love the fact the Dutch outrage trigger is so much lower than ours. They must not idolize money like we do.
”Politicians have voted to implement a 100% retrospective tax on all bonuses paid to executives at institutions that received state aid as a result of the financial crisis. In other words, no banker should get a bonus until the debt is cleared, and they should return payments made since 2008.”
Now we’re talking. No waiting for criminal prosecution. We want our money back and the Dutch know how to get it. No fuss, no muss.
”Van der Kolk's union is pushing for a law that would ensure that executive pay should never amount to more than 20 times the wage paid to the lowest-salaried employee. As for bonuses, the union feels payouts should not exceed 50% of a director's salary. Hommen's bonus was worth 92% of his €1.35m package.”
Look at that will you -- a union that acts like a union.
”The bankers' response that high remuneration is vital to retain talent and prevent Dutch financiers from defecting to overseas banks is given short shrift by Polhout. He says: "Let them go abroad if they don't like it her;, there are plenty of clever people who will take their place and work for less. Good riddance, as far as I am concerned."”
Hear, hear! It’s almost like they know firsthand that “high finance” does absolutely nothing for their economy. As a matter of fact, it’s harmful. You might remember, I pointed you towards this article three years ago.
”There is a considerable literature on these earlier illusions and declines. Reading it, one can argue that imperial Spain, maritime Holland and industrial Britain shared a half-dozen vulnerabilities as they peaked and declined: a sense of things no longer being on the right track, intolerant or missionary religion, military or imperial overreach, economic polarization, the rise of finance (displacing industry) and excessive debt. So too for today's United States.”
(Emphasis added. I’ll assume you noticed “Holland” in all that.)
Back to the Guardian article.
”Few doubt a critical factor behind ING's volte face was the boycott threatened by consumers.”
As always, when I read a good article, I encourage you to read the whole thing so you can pick up your own details.
May 13, 2011