Sunday, February 8, 2009
Give us back our treasure!
Sunday, 8 February 2009
Nassim Nicholas Taleb is making ripples again. The brilliant author of The Black Swans has set up a petition on his Facebook page calling on the US government to force bankers to give back their bonuses. Taleb tells me that more than 800 people have signed up to the cause – a number that is growing daily. His co-conspirator is another great mind, the New York University economist Nouriel Rou-bini, which is nicely unpredictable as Taleb doesn't rate economists. But Roubini is rather different as one of the few forecasters to have warned years ago that the world's economy was heading for the buffers.
The two have set up "J'accuse" on Facebook to urge President Obama's government to make it mandatory for those bankers who have taken money from the bailout to give back their bonuses – all of them. Top of Taleb's list for punishment is Robert Rubin, the former US Treasury Secretary who received more than $100m while working for Citigroup. This, says Taleb, should be paid back because of Rubin's failure to understand the risks his bank was taking. For someone who urges us to accept we understand so little about the world around us, Taleb, a former derivatives trader, is very sure that he is right.
Taleb doesn't think that Barack Obama has gone far enough with his plans, announced last week, to put a ceiling on pay. There's only one way to make bankers accountable and that is to hurt them where it counts – in their pockets. And Obama could do it because there are claw-backs in the new stimulus package legislation that make this possible. If the US government doesn't push for it, then he says the shareholders in the bank – or the public via the Facebook petition – must do the work for the administration. So far, only the Swiss have forced their banking executives to pay back bonuses.