Those who know the man may have disbelieved the account of a lunch with Peter Sutherland, chairman of Goldman Sachs International in London, which claimed that he was “visibly shaken” and “did not touch his food.”
The occasion was an unremarkable appointment with UK journalist, Harry Eyres. But the date tells all – it took place in the days immediately following the collapse of Lehman Brothers in 2008.
I will treasure this report over coming weeks as the US and UK investment banks announce their results and, more particularly, their remuneration policies for 2009. Through the cold numerals of these accounts breathes a scandal of inhumanity that we seem powerless to address.
It’s not easy for those of us absorbed with global poverty issues to shed light on the nefarious methods of high finance. Even financial journalists have failed, judging by the contemptuous ease with which the banks are about to disable the UK government’s brave attempt to levy a windfall tax on bonuses.
The best I can do to expose the nature of the injustice is to examine the restoration of Peter Sutherland’s customary poise and appetite.
This happy outcome has been arranged by destabilising the employment and welfare prospects of countless millions in industrialised countries and by exacerbating hunger in the developing world. And not just this year, but for the undefined period that governments will need to sort out their debts.
The investment banks don’t do contrition, even when every brand management textbook is screaming that advice. Gestures towards charity have been trivial.
I have already pointed out in these notes that the Goldman Sachs bonus pool alone could fund the 2010 budget of the World Food Programme twice over. Having updated our Aid Guide last week, I could offer plenty more suggestions of worthy causes.
Instead the banks regurgitate the old lines that their talented staff will desert unless bonus greed is satisfied.
This fig-leaf is withering to the point of embarrassment. The root of the whole problem is that there is too little competition in investment banking, not too much. It’s the one business in which China cannot deliver cheap exports.
In any other industry of such easy profitability, the smart employees would jump ship and set up new ventures. Bankers don’t bother because they are in a massive comfort zone. So much for the efficient allocation of capital for which investment banks justify their existence.
Two things are plain from what we’ve seen in the US and Europe over the last two years. The first is that the banks are more powerful than national governments; the second is that those governments are prepared to sacrifice everything to preserve the prevailing global economic model.
They appear content that this model distributes its biggest rewards to those self-same banks and its greatest deprivation to the poor.
Unless we can break up this tight little nucleus of power, I don’t see how we can begin to address the global issues that hit hardest at the poorest countries – food, energy and water security, and climate stability.
What’s to be done? The so-called anti-globalisation campaigners have been slumbering lately, thanks to their relative successes on trade and debt.
It shouldn’t be too difficult for them to make friends with investment bank shareholders. These have been treated very badly, called on to cough up cash for rights issues, whilst seeing their dividends raided by the bonus pools.
Who are these dumb shareholders? I’m afraid that they include you and me, through our savings in mutual funds and pension schemes. Watch out for some interesting AGMs in the spring.
this article was first published by OneWorld UK