Kevin Rudd is at his populist best in tarring Australian banking executives with the same brush as their free-wheeling US counterparts.
There are no indications to this point that any of the Australian banks are at risk of failure despite international problems with liquidity; and yet that hasn’t stopped Rudd calling for a cap on executive payouts. Of course Rudd’s posturing panders to the always left wing Greens and the unions; but then again bank bashing always scores political points.
If Rudd is arguing for an international agreement on the remuneration of bank executives then the Australian banking industry has nothing to fear; and Rudd will be on the right track by taking steps to urge tighter controls in countries where banking regulations are more relaxed. But, as appears to be the case, Rudd is maneuvering for change specifically for the Australian banking system; and that makes no sense considering the way our banks have held up under extraordinary pressure.
Of course Rudd’s populist rhetoric will probably end up being little more than hot air. If it isn’t then we may see a brain drain from the banking industry as executives seek better remuneration in industries where the government doesn’t restrict their legitimate rights to earn a market-based salary.
Even in the midst of a national security crisis it pays to create someone or something as “the enemy”. Its easier to sell the message that greedy bankers are at fault then attempt to explain the intricacies of the credit crisis in a 1o second sound bite.