I’m surprised this isn’t a bigger story, though perhaps it hasn’t yet migrated from England to the US. The vice-chairman of Goldman Sachs International, Lord Griffiths (and doesn’t it just fit that he’s a lord), said yesterday in London at conference on “morality and markets” (!) that the public most learn to tolerate inequality as the price to be paid for prosperity, a stunning quote given recent events in the global financial markets.
In remarks that will fuel the row around excessive pay, Lord Griffiths, vice-chairman of Goldman Sachs International and a former adviser to Margaret Thatcher, said banks should not be ashamed of rewarding their staff.
Speaking to an audience at St Paul’s Cathedral in London about morality in the marketplace last night, Griffiths said the British public should “tolerate the inequality as a way to achieve greater prosperity for all” [...]
With public anger mounting at the forecast of bumper bonuses for bankers only a year after the industry was rescued by the taxpayer, he said bankers’ bonuses should be seen as part of a longer-term investment in Britain’s economy. “I believe that we should be thinking about the medium-term common good, not the short-term common good … We should not, therefore, be ashamed of offering compensation in an internationally competitive market which ensures the bank businesses here and employs British people,” he said.
Griffiths said that many banks would relocate abroad if the government cracked down on bonus culture. “If we said we’re not going to have as big bonuses or the same bonuses as last year, I think then you’d find that lots of City firms could easily hive off their operations to Switzerland or the far east,” he said.
He’s certainly got the “Lord” thing down, right?
We hear this sentiment in America as well, that bankers must be paid outrageous bonuses to stay competitive globally, or bankers will simply move operations to… well, London, for starters. Clearly there’s always another country that corporations will use as a bargaining chip to maintain the status quo.
I can’t speak for Britain, but here in America we have been tolerating the inequality for quite a while. In America, the richest 1% hold more wealth than the bottom 90% combined and are making the largest share of national income since right before the stock market crash in 1928. Executives receive one-third of all compensation in the US. Over the last five years, executives received a 48% increase while wages for everyone else were flat. The gap between the rich and the poor tripled between 1979 and 2006. And this trend has continued even during the current recession.
And what did the overwhelming mass of Americans get for their toleration of this inequality, which has spiked since the Reagan era? The biggest financial crisis since the Depression, the cusp of double-digit unemployment, a spate of recessions with jobless recoveries, and essentially a different America for the super-rich relative to everyone else.
MSNBC anchor Dylan Ratigan went off about this quote this morning, recommending that his viewers take their money out of the biggest banks and paying in cash instead of credit cards. This was also prompted by Bank of America and Citigroup raising fees on the fiscally responsible who pay off their credit card balances every month, and the Chamber of Commerce’s $37 million dollars in lobbying. It was a righteous rant:
So far, he’s the only media figure in the US I’ve seen discussing this amazing quote. Maybe that’s coming.
…Think Progress has more.