Monday, September 28, 2009

Talk versus action

UK Prime Minister Gordon brown used the weekend's Labour party conference - almost certainly his last - to talk tough, promising a war on greed and the toughest action in the world to control banker's bonuses and end the incentives for short-term speculation which have driven the global economy to ruin. That action? Requiring bonuses to be deferred for a while (how long is still undecided). So, bankers will still get their money, they'll just have to wait. And this is what Brown calls "tough"?

Meanwhile, Slovenia shows us how its really done, imposing a 90% marginal tax rate on large bonuses and managerial salaries in all financial institutions receiving government guarantees or aid. Which means that managers and speculators will pay a personal price for the damage they've caused - unlike in the UK.