William Hopper, co-author with his brother Kenneth Hopper of the excellent The Puritan Gift: Reclaiming the American Dream Amidst Global Financial Chaos, a book which among other things calls for a return to the form of capitalism prevalent in US in the 1950s and 1960s, in which shareholders’ interests were balanced with those of staff, customers, suppliers and society at large) had a very good letter in the Financial Times last Thursday.
Hopper, who was a director of the City of London investment bank Morgan Grenfell in the 1970s annd 1980s before it was acquired by Deutsche Bank, says it is time that the “rent gougers” in state-subsidised and state-rescued banks had their taxpayer subsidies removed, echoing earlier calls from Andrew Smithers, founder of Smithers & Co.
Hopper believes the best way of achieving this would be the introduction of a new Glass-Steagall Act, separating “casino” activities such as risky speculation on exotic derivatives, from “utility” activites like providing banking services to you and me.
Published: March 31st, 2011
From Mr Will Hopper.
Sir,
What a joy to read John Kay’s elegant explanation of economic rent and compare it with Alan Greenspan’s implied (and absurd) defence of it – and what a compliment to the Financial Times that it should publish both articles on the same day.
As a director of the merchant bank Morgan Grenfell in the 1970s, I was paid five times my secretary’s salary and felt intensely loyal to my bank. When I initiated a DM100m bond issue for the National Bank of Hungary in 1976, my only bonus was a plastic paperweight which sits before me as I write.
My successors at today’s “universal banks” might be paid 500 times their secretary’s salary and feel no loyalty whatsoever to their employer. We need a new worldwide Glass-Steagall Act that will strip these economic renters of their extraordinary subsidy from the taxpayer.
The age of privatised profits and nationalised losses is over.
Will Hopper
This blog post was published on 4 April 2011