"Wake up, Gentlemen..."

"Wake up, Gentlemen..."

There's been an interesting response to Britain's decision to tax bankers' bonuses this year.

Naturally, the more right-leaning of the UK press has been making some derogatory comments: The Daily Telegraph claims it will ruin the economy, calling it

"a 'not welcome here' message the Government has sent to international finance" 

The Daily Mail offers what appears to be a helpful guide to tax evasion, while even the left-leaning Guardian talks of fears in the financial industry that the 

"super-tax on bankers' bonuses will drive star City players overseas"

But the really interesting aspect is just how muted the criticism has been. I opened the Telegraph and Mail expecting to read reams of spittle-flecked hyperbole and denunciation from the free-markets crowd, but it seems that even they have largely accepted that the tax is overwhelming popular, and thus are unwilling to attack it too forcefully.

Even Max Hastings, stalwart of the right, debunks the idea that all the "star city players" will be snapped up by overseas institutions:

"How great is international demand for the services of men and women who have presided over the worst financial catastrophe of modern times?"

Instead, it seems the critics have decided to direct their ire directly at Gordon Brown,  Britain's prime minister, accusing him of  - horror of horrors - doing something popular to get re-elected.

Amid all of this, though, the most interesting comments came from Paul Volcker, the legendary former chairman of the U.S. Federal Reserve and now chairman of President Barack Obama’s Economic Recovery Advisory Board. Quoted in The Times of London, Volcker told bankers it's time to "wake up"  to the fact that they have contributed much less to economic perfomance than they would have us believe.

"I wish someone would give me one shred of neutral evidence that financial innovation has led to economic growth — one shred of evidence."

According to Volcker, the most useful financial innovation of recent years has been the ATM machine.