This banker baiting worries me

By Daniel Finkelstein, February 9, 2012

Let me try something out on you. It may turn out you don't feel as I do. But I have a hunch that more of you will share my uneasiness than won't. It's about Fred Goodwin. In fact, it's about the whole banker thing.

We Jews may be more likely to perceive that the BBC is biased against Israel but, on common-or-garden political issues, we feel pretty much like our non-Jewish neighbours. So, most people reading this who aren't bankers, or the mothers of bankers, will be pretty cross with those at the top of the financial services industry. You will agree that too many risks were taken, that those taking them were not gambling with their own money and that they often didn't understand the products they had created.

You will probably concur that the consequences of this failure were disastrous but not primarily for those who were responsible. Some, like those at the top of Lehman Brothers, lost vast fortunes, but this was cushioned by the fact that they also retained vast fortunes. For most, this leads to one conclusion - there's something a bit off about the size and structure of banker's remuneration. And that's particularly true of RBS.

Or perhaps, like me, you think that, as a matter of economics, wages for top banking executives have become too high. In his terrific book, Pay Check, David Bolchover argues persuasively that businesses are paying more than the retention of able people really requires. Banker friends tell me that high wages are set by the market and that over-paying wouldn't survive competition.

I point out that the banks managed to misprice mortgages for years, so it is quite possible that now they are mispricing executives.

Why did I shudder when they took away Goodwin's knighthood?

We Jews are like anyone else. So, explain why I felt so uncomfortable when it kicked off last week over bankers and their salaries? Why did I shudder when they took away Goodwin's knighthood? And why did at least some of you share these feelings?

It's this vague but tangible feeling that there is something vindictive about the country's mood that worries me. And it worries me as a Jew. Britain is a great place to live as a minority because it respects the rule of law and is a self-confident place that accommodates difference. After the past fortnight, I feel less confident about both these things.

What happened to Goodwin was a case of arbitrary justice. There were other bankers, indeed other people, who were just as culpable, but the political fuss had all been about him. Arraigned before the court of public opinion, he was found guilty. The punishment was public humiliation.

A similar thing happened to Stephen Hester. We can argue over the RBS board's decision but what took place was not calm deliberation, it was a frenzy. It left Hester feeling that he was at risk of becoming a pariah - as if seeking to persuade the board to pay you what was in your contract was a crime.

I've seen plenty of journalists write that conferring a knighthood upon Goodwin was as arbitrary as removing it, and that, anyway, he deserved it. But this misses the point. I'm worried about how it leaves the rest of us. Arbitrary acts of punishment are not at all the same as random acts of kindness.

As a British Jew, I have always felt protected because in Britain we do not tend to behave like this. We follow rules, we don't have a court of public opinion, we value liberty under the law. Is it being over-sensitive to shiver when you see headlines about international financiers and cartoons picturing bankers in top hats, grinding the faces of the poor? Does it remind you of something? Or just me?

First they came for Fred, and I…

Daniel Finkelstein is executive editor of The Times

    Last updated: 11:33am, February 9 2012