Sunday, July 3, 2011

As far as finance is concerned I am the world’s biggest klutz. I will never understand the intricacies of it all. The sums involved are so enormous they simply boggle the imagination; not necessarily national sums but some private ones as well. How can a country like America get into debt to the tune of 16trillion? How can an individual garner a fortune running into billions and billions? How come the oil companies BP and Shell are simply awash with profits? The price of oil has gone down but the price of petrol at the pumps doesn’t move?

Poor George Papandreou – he tried for so long and worked so hard to become prime minister of Greece and, eventually having made it, has landed himself in a positive hornets’ nest of problems. Greece’s financial difficulties I can understand. They are the direct result of nepotism, cronyism, corruption, the fakelos or envelope was an accepted part of Greek life, and jobs for life for the boys with generous pensions to follow. It is also the result of defalcation, the illegal lining of pockets, and the Greek’s determination to avoid paying taxes wherever and whenever possible. Evidently French banks, followed by the Germans have offered to give Greece a reprieve by granting thirty year loans (The UK is not following) but the big question to ask is, will it get the country out of trouble or will most of it go to line the pockets of those greedy totally immoral characters whose motto seems to be, to hell with everybody except me?

And I simply cannot get my head around the phenomenon of bonus culture. A man by the name of Iain Croucher who headed Network Rail for only three years has been given a pay-off packet of £1,075000. It’s no wonder that rail fares in Britain are constantly going up and up. What did he do to warrant this enormous pay-off? Gerry Docherty, general secretary of the Transport Salaried Staffs’ Association said, ‘Passengers will be furious that he has walked away with over a million of taxpayers’ money after years of failure. During eight years at the company he received more than £7000000 in pay and bonuses and to show how well he earned his remuneration, Network Rail received £3.7 billion in subsidies from the tax payer as part of a £30billion total for the years from 2009-14. No wonder Great Britain is almost as broke as poor old Greece but it’s all right for some.

Even more mystifying than Mister Croucher’s pay-off is that of the offshore drilling firm responsible for running the Deepwater Horizon rig that has given its top executives bonuses for its "best year" for safety. Transocean was blamed along with BP and Halliburton after last year's massive spill in the Gulf of Mexico. Eleven workers, nine of whom worked for Transocean, died when the Deepwater Horizon exploded. In the days and months that followed millions of gallons of oil poured unabated into the Gulf of Mexico, prompting President Barack Obama to call the incident America's environmental 9/11. Before the well was capped the spill fouled the coastlines of four states, scared tourists away and closed countless fishing grounds. The true environmental and economic impact may not be known for years. A presidential commission concluded that the explosion had been caused by cost-cutting and directly blamed Transocean, BP and Halliburton for the disaster. But what did Transocean have to say? “We recorded the best year in safety performance in our company's history” and so, despite this disaster of mega proportions, huge bonuses were paid to company executives. Now you must admit the mind definitely boggles especially when you consider the human and environmental cost is still being counted. But you will realise how much money there is in oil when you think that, despite this tragedy, BP is still well in profit.

And, finally, the former boss of Lloyds Banking Group is being paid £100000 a month for doing absolutely nothing while the bank is shedding 1500 jobs. Eric Daniels last year took home £1,122,000 in basic pay and benefits, equivalent to £93,000 a month. In addition he was paid a £1,450,000 bonus and his pension is worth £210,000 a year. Lucky for some huh? But not those about to lose their jobs.

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