"A Socially Useless Activity"

I don't think the FSA has done its job properly. I lay that responsibility directly at the feet of its Chairman, Lord Adair Turner, and his inept and idle CEO, Hector Sants. That said, it is a bugger's muddle to sort out the banking industry and get it properly regulated.

Why? Because it is so powerful and the people in it are powerful. So when Lord Turner finally speaks his mind and shows he actually has a modicum of understanding of how the general population feel about the kinds of bonuses people earn by simply pushing our money around, without a jot of accountability if they lose it but incredible bonuses if they gain some profit, he gets castigated by the industry as if he has suddenly put a pile of fresh horse manure on their dinner table.

Turner has suggested that some investment bankers perform 'a socially useless activity'. The industry was deeply offended but frankly it was a comparatively minor insult. For a few years, each morning I used to listen to some of the inane and positively insulting talk that bankers come out with when I attended a City gym. The locker room conversation was all about measuring manhood in terms of how much money they could blow in champagne bars, restaurants, on new cars and holidays while their lack of knowledge and understanding of the markets they operated within was clearly limited and each was looking for a lead from the other to actually do their jobs. You have only to read or listen to the disparity in opinions on the markets by so called analysts to know that much of the City aura is, in reality, guesswork and controlled by strokes of the buttons on computers.

That much was proven in particularly the UK's response to the financial crisis. We have burned money and printed more as if it were old wallpaper to save the financial system at a cost of real things like jobs and manufacturing. And now here's the rub.

The Telegraph yesterday printed an 'apology' for the bankers after Lord Turner's insults which included charging banks a 'special tax on pre-remuneration profit' (he must read my blog as I proposed the same, less elegantly) and they illustrated a heartstring-twanging litany of why we should feel sorry for bankers. You see, the financial sector employs about 1m people or around 5% of the workforce and 13.9% of the tax take came from the financial sector in the form of around £25,000 per employee, £12bn in Corporation Tax, £15bn in income tax and £3.2bn in National Insurance Contributions. The tears are welling up.

But before they start to tell us how important they really are, let's also remember that the financial sector only contributes 7.1% of the UK's GDP. And here's the reality - in the financial crisis triggered by the credit crunch, we are set to double our Sovereign Debt in order to pay for the losses incurred in the sector, which could take borrowing as high as 99% of GDP by 2014 if you believe some figures. To date we have printed £175bn of new money to heal the wounds caused by the industry while it is thought as much as £1.3trillion in capital, loans and guarantees has been used to prop up their industry, yet their net annual contribution to the tax budget is just £30bn.

We have helped them deskill their jobs even more as we have now fully guaranteed their future losses and given them virtually zero-cost money to replenish their cash and to go and play their games again as the markets bounce back. And once again earn the billions they feel they so richly deserve.

People argue that such taxes proposed by Lord Turner would drive 'talent' away from the City and I have argued 'good riddance'. If that is the cost of picking up the tab for them, then let them go. Reality will catch up with the financial industry - there is no such thing as zero sum accounting for taxpayers. When we lose money, we have to pay for it - there is no magnet that brings it back.

I think it is time we got some perspective here. These financial so-called gurus are not as brainy as they think. They have had the best jobs in the world which have catered to their greatest whims of making money. They are ordinary people, with no real intelligence who just have an unfathomable lust and greed for money. We have set up a global system for them to skim off a share in the profits of simply moving money around and placing bets and we have propped up the system with more money then we have for them to keep doing it. In doing so we have not checked the system for flaws or weaknesses or even bothered to understand it - we have just pledged money because they asked for it.

Enough with their sob stories of what they do for us - it's time they paid the cost for what we have done for them. If Turner is finally growing some teeth and claws, then let's hope he has the courage to use them this time around as last time he was just an ordinary guy who failed dismally to do his job, just like all those who pursued in 'socially useless activities' - the investment bankers.

It's heartwarming to know that while we would not give such people the time of day, Gordon Brown pays them £millions for their advice as to how to solve the financial crisis they got us into. Hasn't got us very far yet, has it?