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Offline the leveller

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« on: July 07, 2013, 10:57:40 PM »
Let?s Jail The Bankers: We?ll Deal With The Bureaucrats And Politicians Later ? ?I look forward to this, I truly do.? ? Forbes

Posted on June 20, 2013 by Admin   

Let?s Jail The Bankers: We?ll Deal With The Bureaucrats And Politicians Later


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A Parliamentary committee in Britain has just announced that it thinks that it should be possible to jail bankers for running their banks in a ?reckless? manner. All of which is very well: it?s just that the justification for this does rather include the idea that we ought to be able to jail both politicians and bureaucrats when they operate in a similarly reckless manner.

The actual proposal is here:

George Osborne is facing pressure to radically overhaul Britain?s banks by introducing a new law to jail bankers for ?reckless misconduct? and force bankers to wait up to 10 years to receive their bonuses.

Making the bankers wait that long will essentially mean that bonuses have near to zero effect. Humans just discount the future too heavily for a decade to be a reasonable amount of time to wait. It might be that we shouldn?t be like this but we are: hyperbolic discounting it?s called. Indeed, research does show that even making people wait two years for a bonus reduces the perceived value of it by 50% or so. Thus I would expect either bonuses to get very much larger if they have to wait that long: or, perhaps, the near death of the bonus culture itself. Which many would applaud of course. But it would mean base pay and thus the fragility of banks themselves going up.

But it?s that idea of jailing bankers who behave recklessly that is so interesting. It?s already a criminal offense to bribe, steal trade insolvently and so on, I?m hard put to think of behaviour that would be caught under the heading of ?reckless? that isn?t already under one of those others. Unless we mean simply getting things wrong of course. And that?s where it starts to get really interesting.

If a banker can be jailed for behaving recklessly and thus losing our money then why can?t a bureaucrat? Or a politician? To give just one example from my native Britain: the recent Olympics. When we were all encouraged to support the bid to hold that track meet for drug addicts we were told that it would cost some ?2.5 billion. ?3 billion absolute tops. By the time it was all over the costs have been well in excess of ?20 billion. That?s someone, somewhere along the line, behaving very recklessly with all of our money. So why can?t we jail whoever it was?

As in so many things Germany has got there first:

To add to that, though, the Association has come up with a new campaign. Just complaining about waste, it says, is simply not good enough. It wants to make waste of public money a criminal offence.

In their campaign brochure, the case is closely argued, the premise being that personal criminal liability is used to counter the ?It?s not my money!? mentality of decision-makers.

The Association draws a parallel between tax evasion, for which the citizen can be punished, and waste, for which there is no penalty. It sees the two as different sides of the same coin, calling for full civil, criminal and legal responsibility to be applied to public servants for their actions. The mismatch between the prosecution of tax evasion and the lack of action against tax waste, it says, ?is now striking?.

Thus, the Association wants to see a new offence of ?Financial Infidelity? in the criminal code, to facilitate the prosecution of civil servants and public officials when tax money is wasted. In addition, a special duty is imposed on those responsible for granting or spending public funds, which permits penalising poor performance. And this should apply through all levels of government, including municipalities and corporations or institutions where public law is applicable.

Isn?t that just an entirely gorgeous idea? It?s most certainly one that I would fully support. I can imagine having the most wonderful fun reporting people to the prosecutors as well. It would be a sport truly worth playing.

And the most joyous point about it is that it?s very difficult indeed to see how the politicians can complain about it given what they want to do to the bankers. If it?s a criminal offense to firehose other peoples? money down the drain then it?s a criminal offense to firehose other peoples? money down the drain. We might catch the odd banker at this, this is true, but that?s surely a price worth paying for being able to prosecute near every politician and bureaucrat for evermore. I look forward to this, I truly do.

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UK: commision recommends new laws including jail for reckless bankers
Jail Reckless Bankers? It Will Never Happen!
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