Tuesday, 27 October 2009

That'll Show Them

George 'School Snitch' Osbourne is a complicated character. He looks like a cross between a snooty school bully who operates largely behind everyone's backs and something a little more sinister.

Then he opens his mouth and, while he is trying to make a point, garbage seems to fly out. Yesterday was a classic example.

In an attempt to boldly take on the City bonus culture he firmly said that he would curb bonuses to just £2,000 of cash and the rest in shares. That way the banks could use the precious savings, estimated so far as around £6bn of accrued bonuses, as money they could lend.

It was a daft policy on many counts.

Not least, he defined he would use the policy for this year only. In a recent reality test conducted by most citizens, it appeared that Gordon Brown and Alistair Darling were still, albeit by the skin of their teeth and arguably not for much longer, at the helm of the country. So the chances of it ever being more than just a stream of words from his well educated but inexperienced mouth was absolutely zero. Secondly, the fact was that despite the incredible sums of money poured into banks via new money printing, loans, capital and guarantees, lending is down by some £15bn. So the evidence shows that banks would just hoard the cash to make their balance look good if that was what they were compelled to do with it in the last resort.

But Osbourne missed a vital point in is idea, which was about as a worthy as that of an 11 year old winner of a class project. Banks are devious fellows and they would have paid the bonus in the form of some other precious and valuable commodity - en primeur fine wine or platinum or gold as good examples. True they all would have had to have large cupboards and the nous to realise the value but give these whizz kids some credit.

Far be it for me to say this was just political grandstanding but that's what it was. The trouble is that it was not very intelligent grandstanding from a guy with a lot of education but no common sense. It perhaps sums up the whole Tory challenge - a lot of wet wind and flannel but no real substance.

The danger is that we have people like Osbourne in high office and we start actually wanting Darling back.
What a nightmare scenario that would be.

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