The Power of the People
On Sunday the Conservative Party in the United Kingdom introduced the concept of a “people’s bank bonus.” Party representatives justified the move by stating, “Taxpayers bailed out the banks, so they deserve a ‘people’s bank bonus’ when the time comes to sell the government shares.” The basic concept is that once Royal Bank of Scotland (government owns 84% stake) and Lloyds (government owns 41% stake) stabilize and recapture market value, the government would offer its shares to the people at a discount rate (see here). Some apparently suggest that the government should even endow the shares to the people (see here).
This announcement is just the latest example of the intense public outrage and related public and political responses to the economic crisis and bank bailouts in the United Kingdom. Admittedly, factors leading to the economic crisis have outraged people across the globe, but I have been intrigued by the passionate U.K. outcry. Perhaps it is because many outsiders view people in the United Kingdom as being more reserved and less emotional in the public forum. That image does not quite fit with the popular U.K. game “Whack a Banker” in which “[y]ou pay 40p to hit as many bankers as you can in 30 seconds as their heads pop up. It’s based on an older game called ‘Whack a Mole’.” (See here.) There also is an online version of the game. (See here; beware, slightly graphic.)
The rally cry of the people encouraged the bank bonus tax announced by the U.K. finance minister in December (see here), additional bonus restrictions that limit the cash component and permit amounts to be clawed back (see here) and a British singer to threaten withholding his own taxes until the government regulated excessive bank bonuses (see here and here). The CEOs of Lloyds, Royal Bank of Scotland and certain other banks have waived their 2009 bonuses. (For an interesting article suggesting that the focus on bonuses is misplaced, see here.) And, according to a recent survey, the U.K. public anger continues to linger. In fact, several companies are hoping to take advantage of public discontent to break into the retail banking market. As I noted in a prior post, it remains to be seen whether any of the noise surrounding the economic crisis will result in long-term change, but it certainly has generated a lot of activity across the pond.