First, there was yesterday’s news that nationalised Royal Bank of Scotland is going to pay out £1.3 billion in bonuses. More than 100 RBS bankers are going to get bonuses of over a million pounds. They lost £3.6 billion last year, but that was “lower than expected” so that’s all right then.

But what really got my goat was CEO Stephen Hester’s complaint that all our whinging about bonuses is his “cross to bear.”

Even his acceptance that “reform is needed” failed to calm me down after that.

The next thing was Alistair Heath’s editorial in today’s City A.M. In his analysis, the prime target for action to deal with the “fiscal nightmare” (it goes without saying that he is a deficit hawk) is the welfare state, which is “crying out for a shake-up.” People who (unlike the City) had nothing to do with causing this crisis should have to pay the price of solving it.

These two irritants irritate for the same reason. After causing this crisis and receiving hundreds of billions from the taxpayer, you’d have thought the City would be showing a little more humility.

Perhaps they are sociopaths after all…

Yesterday the same argument appeared in the Guardian in an anonymous article by a “banker”, headlined “not all bankers are fat cats”. Nowhere in the article does this “banker” say exactly what he does in banking.

The most important part of the article said:

… the figure Alistair Darling put aside in his recent pre-budget report to cover costs relating to the bailout. His latest estimate is that the cost to the taxpayer of propping up the financial services sector will be no more than £10bn.

Once again the costs of putting right the wider damage caused by a bank-induced recession are left out of the equation.

I suppose this synchronicity could be a coincidence …

Much of the rest of the article was a besides-the-point demolition of a straw man.

There is public anger at bankers, but I don’t think most people consider people who work in bank call-centres or behind the counter at their local branch – if they still have one – to be bankers.

And if Mr Banker was that concerned with the plight of the many ordinary people doing ordinary jobs in banks he might have shown some more understanding of their complaints, such as the pressure on them to sell inappropriate products on commission to make up for their poor basic pay.

The main bank staff union Unite is backing the campaign for a Robin Hood tax, as are other finance unions and the international union organisation that groups finance workers.

(CISI) is the largest and most widely respected professional body for those who work in the securities and investment industry in the UK and in a growing number of major financial centres round the world.

I think we can conclude therefore that quite a lot of his members get big bonuses.

In the Times today he has possibly the silliest piece I have read on the recession. He argues that:

Banks are the scapegoat for politicians’ mismanagment”

His argument seems to be that only £8 billion of the current annual deficit is due to the banks as this is the cost to the Exchequer of rescuing Northern Rock, Lloyds TSB and RBS. This is therefore the only contribution that banks have made to our current economic difficulties.

The rest of the deficit is due to increases in government spending. He says:

Fundamentally, although income fell for two consecutive  years, spending continued to rise and incredibly is planned to rise still further. (my emphasis).”

It is hard to know where to start with this.

We have a recession that was made in the banking and finance sector. The government has inevitably increased spending because it has had to meet the costs of the recession. It has also suffered a catastrophic fall in income because the tax take has collapsed because of the recession, which as I may have mentioned, was made in the banks.

This would have been true whatever party was in power. Even if the Conservatives were already implementing their planned cuts, the same article could have been written.

There have been just one or two externalities from the finance crisis. They add up to a lot more than £8 billion. To completely ignore this and be quite so unaware of the difference betwen the structural and cyclical deficits is not so much pre-Keynes as pre-historic.

The campaign for a Robin Hood tax has rather stretched the Sherwood Forest metaphors. But I remember from the 1960s TV show that the Sherrif of Nottingham’s allies were never that bright.

I can understand why bankers want someone to speak up for them (and their bonuses), but perhaps they could have done better than call Nottingham central casting.

Er, actually, Richard. I think Sir David only meant conceptually simple, I don’t think he was impugning the fact that you work jolly hard), and that the good outcomes of business are the objective (peace, freedom, happiness, all that stuff that only results from making widgets and leveraging mergers and acquisitions. Er, not!).

What Lambert seems to ignore is that the bad stuff that results from business can’t be dismissed as irrelevant or accidental – it’s as much a product of the free market as all the good stuff. Indeed, he concedes Hare’s main argument, that “markets have failed throughout history and they usually [sic, surely?] need regulating.” But that’s not what the Masters of the Universe told us during the boom years, nor is it the guiding spirit of the deregulatory, liberalising neo-liberal political world we lived in until Lehman Bros collapsed.

Are they still ‘Masters of the Universe’? No. But what they are rhymes with bankers.

According to the FT, only one in three manufacturers contacted (leave aside whether 57 is a representative sample!) “believes the business secretary’s ideas to boost production industries will do any good.”

The table showing the results of the grandly titled “FT manufacturing barometer panel” reveals that 20 said his policies “would help”, and 37 said it was “hard to say” or would be “no help”. But without knowing how many were in each of those two categories, it’s difficult to sustain the thrust of the article, illustrated by 5 quotes (a clearly unrepresentative 4 of them in the “no help” category), that manufacturers oppose his strategy. For all we know, more manufacturers think the ideas will help than not, and there’s no evidence at all that anyone thinks they would actually hinder manufacturing.

Mind you, maybe he was lucky. The finding of the survey that 37 of the 57 thought there would be a recovery in 2010 was illustrated by just 1 quote – saying there wouldn’t!

Why let the facts get in the way when you’ve already decided the story?

“An organisation is trying to organise “flash sushi” parties, at which you get to eat raw fish off naked women’s bodies. You pay your fee and only 24 hours beforehand do you learn where the party is taking place. This is the done thing among very rich Japanese, and I suppose three years or so ago it would not have turned a hair in the City.

But it is surely inconceivable that anyone today, however overpaid and stupid, could sign up for such a degrading charade. Isn’t it? Oh. I see the first four events are sold out.”

They just don’t get it, do they?

Now insurance company Aviva have called for the abolition of higher rate tax relief with the money saved to provide tax relief of 30% for all pensions savings.

This would mean that only those earning quite a bit above the start of the higher rate band would lose. All standard rate payers and higher rate payers earning just above the higher rate would gain.

It’s an interesting proposal.

The Times report has a tremendous “They Just Don’t Get It” to finish however:

Tom McPhail of Hargreaves Lansdown, the financial adviser, said: “The proposal to realign the tax relief will not be at all popular with higher rate taxpayers, who must be increasingly feeling as if they are being forced to bear the entire weight of the Government’s economic woes on their backs.”

I rather think those who have lost their jobs might have something to say about that.

There is of course much comment on Adair Turner’s splendid remarks on finance, including serious arguments on both sides. But then there is this:

Howard Wheeldon, of the stockbroking firm BGC Partners, said Turner had moved beyond his brief in making those comments and it would be “time to turn the lights out in the UK” if the tax were imposed. “Quite honestly I am appalled, disgusted, ashamed and hugely embarrassed that I should have lived to see someone … who already commands a senior and crucially important position as effective head of the UK regulatory regime, making such damaging and damning remarks.”

They don’t like it up ‘em, do they?

The whole article is an extended whinge by someone so rich they don’t have to bother about the problems facing ordinary families – such as debt, illness and low pay (like the workers in Luke’s Pizza Express restaurants before he sold them for millions in 1999). Apparently the big problem facing the world economy is that Luke Johnson and his pals haven’t got enough millions! How do people this greedy sleep at night?

And about those GM and Chrysler workers, Luke – where DO you get off telling people so much poorer than you that THEY are over-rewarded? The employment costs that have laid US car companies low are the health insurance costs which companies run by British entrepreneurs like Luke don’t have to pay for because they’re taken care of by our ’socialist’ National Health Service, funded by general taxation which (still, despite the 50p tax rate) still falls more heavily on ordinary workers than on fatcats like Luke.

Christian teachings famously argue that it is easier for a camel to get through the eye of a needle than for a rich man to enter the Kingdom of Heaven. But it is apparently not so difficult for them to get self-serving twaddle published in a daily newspaper!

Water shortages have made it impossible for people to water their gardens (some crop irrigation is still allowed), wash their cars, shower without a bucket which catches the ‘grey water’ and is all that keeps domestic plants alive. My sister’s back garden, once grassed over, has actually desertified in the last decade. She has replaced the last few tufts of grass with astroturf.

Reservoirs in Victoria (known as ‘dams’) are now getting steadily lower. The Melbourne Age prints not just a weather forecast, but the level of water in the dams. Today, Melbourne’s water storage facilities have a capacity of 1,773,000 megalitres – but they are only 28.7% full. Up north, the mightly Murray River is now several feet lower than it used to be, with tall banks that used to be under water. It fed a whole region, and now regularly features algae sloops miles long. It appears to be dying.

Australian people live in a developed country. They can cope with climate change at the moment, although the bush fires of last month which killed 179 people are still an obvious reminder that eventually, climate change will affect us all. Australia is clearly better off than many developing countries where climate change has the potential to ‘make poverty permanent’. But Australia ought to be leading the way, with its Labor Government: one of Prime Minister Kevin Rudd’s key election pledges when he won power was to sign the Kyoto Treaty, and he did it virtually immediately.

But while the Australian trade unions are, like the TUC, demanding green job creation as a way to beat the recession and create a sustainable economy, Australian employers – especially those in the energy and mining sectors – are resisting the Australian Government’s plans for cap and trade, or trying to water them down. UK employers take a more progressive stance, and maybe they can persuade their Australian colleagues to be more progressive, for the planet’s sake.

Martin Broughton, CBI President and chairman of British Airways, told the Financial Times today that the London Summit on 2 April should focus on a global stimulus and opposing protectionism. But it needs to do more. Tackling tax havens and bank bonuses, as well as global poverty and climate change, would be a crucial signal that the G20 is serious about going beyond mere sticking plaster, business as usual measures.

Jamie is cited at the foot of his column as the author of a book subtitled “a guide to clear thinking”. So he should understand why people who can’t even do the jobs they’re paid for shouldn’t get bonuses.

Footnote: Alright, he’s not exactly banning them, but the alliteration was too perfect to resist.

P.S. check out the Irish Congress of Trade Unions’ latest online video. And I write as a cat-lover. Good luck with Saturday’s demo!

UPDATE: 100,000 people turned out in Dublin for the demonstration this afternoon. Follow their example and March for Jobs, Justice and Climate in London on Saturday 28 March

But I’ve decided it isn’t. I’ve read some of what big bank bosses said to the House of Commons Select Committee and like most people I know I was appalled at their lack of contrition. We’ve all been pussy-footing around about this and we ought to stop.

We should indeed be very, very envious, and very, very angry – not so much about the bonuses as about the impunity with which top bankers have survived the crash they caused. It is quite different to the punishment that is being meted out to ordinary people in the US, the UK, and especially in the developing countries. March with us on 28 March if you agree.

The Weekly Standard’s editor Christopher Caldwell, writing in the Financial Times, is predictably kinder to the banker bosses. He says that what they demonstrated was that they were not personally guilty (yes, like in Agatha Christie’s Murder on the Orient Express, we’re all guilty of stabbing the global boom in the back). But he accepts that part of the problem with this analysis is that the banker bosses were paid bonuses that suggested they should have been able to foresee the crisis and take steps to avoid it happening. He concludes:

“If one thing emerges from the chequered history of American financial populism, it is that most financial collapses have had populist causes, not just populist reactions. The people now tormenting the bankers are as capable of ordinary stupidity as the bankers proved to be. As long as that is kept in mind, show trials like the ones last week can do some good. The public does not need reassurance that the bankers are worse than the rest of the populace. It does need to establish that they are no better.”

I think it is probably right that we should not be envious of the banker’s huge bonuses. I don’t want to live a life consumed with envy about people being richer than me. But on the other hand, I don’t think there’s anything wrong with arguing that such bonuses can damage the economy (especially if they reward short-term foolishness over long-term rationality), or arguing that such bonuses should be heavily taxed (it’s often forgotten that Lord Mandelson’s 1997 General Election statement that he was “supremely relaxed about people getting filty rich” was qualified by the phrase “as long as they pay their taxes”). Martin Wolf explains why big bonuses are bad news with characteristic wit, and Emma Jacobs has explored their malign gender dimension.

And I’m certainly not envious of some bankers – like the union members who are losing their jobs as the banks that employ them crunch, crash and collapse.

But I do think we should envy something that is not completely unrelated to the bankers’ big bonus culture – the impunity with which they have survived the crash they caused (the connection is that they decide how much of our money they get paid, and they decide whether they get sacked or not). It is quite different to the punishment that is being meted out to ordinary people in the US, the UK, and especially in the developing countries.

How many of the top bankers who did things that contributed materially to the global recession we now face are losing their jobs, their homes, their social standing and their livelihoods. Some have lost jobs although they seem curiously capable of picking up new ones (often, it seems, regulating the system they crashed!) Some have lost stock options, although many more are still gathering in bonuses for lamentable failures (sorry, for losing not quite as much money as the market average!) Their gongs aren’t being taken away, or their second and third homes (let alone the first ones). They aren’t being expelled from their swanky provate clubs, and their metaphorical epaullettes aren’t being torn from their designer suits. Their spouses aren’t ditching them for younger, smarter and now richer insolvency experts. They really aren’t feeling the pain, and they just don’t get it!

I want people to envy the big bankers’ impunity, I want them to be righteously angry about it, because I want to see the impunity that comes with wealth and power to be taken away. Because that impunity is far more damaging to society than big bonuses are to the economy.

Greed ain’t good. But envy, channelled for the right purpose, can be excellent.

One good way to channel that envy is to join the the Put People First March for Jobs, Justice, Climate on Saturday 28 March ahead of the G20 summit of world leaders.

Maybe I’m naive but I just don’t understand how an American who must be reasonably intelligent and knows a bit about finance hasn’t heard of the Great Depression and the rather serious events that flowed from it.  Certain economists and investors might think that the world works in neat compartments and that the market always provides an efficient solution when left to its own devices but the key lesson of the Depression (which the New Right forgot) was that economics is intimately bound up with politics, psychology, international relations and a whole host of other human phenomena. The massive human cost of letting the big banks collapse would have intense and unpredictable consequences for all these spheres which would, in turn, have intense and unpredictable influences on the economic outcome itself. Life isn’t an equation, Mr. Rogers.

I bet my colleagues from the TUC Economic and Social Affairs Department will blog more eruditely on this subject, but the economic illiteracy of the proposals had me harrumphing into my Financial Times yesterday morning. Encouraging people to save rather than spend in a recession, and doing it by cutting public spending isn’t even a schoolboy economic error.

Tom Freeman (hat tip) found a great quote from a Keynes radio broadcast, reproduced in La Stampa:

“For take the extreme case: suppose we were to stop spending incomes, and were to save the lot. Why, everyone would be out of work. And before long we should have no incomes to spend and the end would be that we should all starve to death.”

The only ray of ‘hope’ is that Chris Dillow says the proposal would have so little effect that it wouldn’t deepen the recession, but only transfer money from the public sector workers who lose their jobs to a few middle class retired people with savings. I can’t quite believe that’s the demographic on whom the next General Election result depends, but I haven’t looked at the figures recently.

This is not to say that I don’t understand the economic imperative (also echoed by the Prime Minister a few days ago) to help those pensioners (to take the most deserving group of savers) whose savings are no longer attracting the interest rates that they were. In a recession, where interest rates are plummeting, the smart thing for people with savings to do is either spend them (which helps boost demand – but probably not the best option for people on restricted incomes from other sources, eg pensioners) or invest them (by which I don’t mean buy existing stocks and shares, which is in a way just another example of spending, unless dividends are likely to be high, but actually invest them). That’s one of the ways recessions can be self-limiting (not always something you can rely on - see Keynes quote above).

(In parenthesis, I loved the bit of the proposal which would provide basic rate tax payers with £16,000 in savings with just under a pound a week extra tax relief – hands up how many basic tax rate payers have £16,000 in savings. Don’t spend your windfall all at once, will you?)

“The best thing to do now would be temporarily to weaken, if not repeal, various labour, environmental, social, health and other “standards”, because they block rational human activity more than anything else.”

Note that when people make such sweeping statements, they never specify which standards should go – the rules against drink driving, or use of asbestos, or sending children up chimneys? No, of course not, only the “bad” standards, like …. er…..something I overheard someone make up in a pub….

Thankfully, the Czech President is not in charge of the Czech Presidency of the EU. He’s in charge of important stuff, like whether to fly the EU flag or not (that’ll show those b-Euro-crats). Honestly, you couldn’t make it up!

Things in markets are worth what the markets say they are worth.

Worstall must inhabit a parallel universe where the inability of the financial markets to correctly price just about anything hasn’t led to a global economic crisis.  His comment pretty much sums up the deeply ideological and flawed nature of the rest of the article.  I’ll return to it soon.

Interestingly the Conservative Local Government Spokesman Eric Pickles has endorsed TPA arguments (even though most councils are Conservative controlled.) The Daily Express reports him saying that Labour had failed to crack down on town hall propaganda, which puts him in the odd position of attacking a Labour government for not controlling from the centre what Conservative councils do locally. I seem to remember a time when the Conservatives argued that Labour was too centralist and top-down. This new position is unlikely to go down well in Britain’s Town Halls.

But perhaps the Local Government Association are in the running for one of our coveted “They Just Don’t Get It” awards. Their reaction – again from the Express – was:

“Mothers need to know when they can take their children to the swimming pool.

“Elderly people need to know the benefits they are eligible for. Which part of this would the TaxPayers’ Alliance like to see cut?”

The answer to that simple question is ‘all of it’.