Who is the real
Romney? We have
still to find out
Stalinism is alive
and well on the
Glasgow underground
John Cameron
The driver approaching you on the wrong side of the motorway is probably a member of the first generation of mass-motorists and is armed with a four-wheeled deadly weapon.
My wife had a nightmare with my late father-in-law who had been a superb driver but as he passed 85 was clearly suffering from Alzheimers and was a danger to everyone. Her mother was in denial, bullied her GP into allowing him to continue, and this lunacy went on until finally my wife managed to get his optician to call a halt.
Sooner or later most families will face this problem and the DVLA should require all drivers over 75 to be assessed by an independent doctor – not their family GP. We have a lethal licensing procedure with the utter nonsense of the driver self-certifying himself as being fit to drive and already there are one million drivers aged over 80.
The death rate per mile for drivers over 75 is four times that of the 30 to 60 group and eight out of 10 people in their 60s hold licences with plans to drive for the next 20 years. Most insurance companies in the western world offer their lowest rates to those between 50 and 65 years of age, since this group has by far the fewest serious accidents.
After age 65 rates begin to rise again because risk analysis and statistics show that reaction times, vision, spatial awareness etc become worse with advancing years. The visual problems increasing with age include vehicle speed, unexpected vehicles, dim displays, windshield problems and sign reading.
The parliamentary advisory committee for transport safety has proposed a refresher course be offered to pensioner drivers on a voluntary basis. Having spent most of my professional life dealing with the elderly I can assure you that the only pensioner drivers volunteering will be the ones who do not need the course. It really needs to be mandatory.
All things come to an end and it costs £3,000 a year to run a car, which buys a lot of taxi fares.
Unlike many publications SR doesn’t have an online comment facility – we prefer a more considered approach. The Cafe is our readers’ forum. If you would like to contribute to it, please email islay@scottishreview.net
Today’s banner
Creel, Isle of Mull
Photograph by
Islay McLeod
An insider
blows the lid on
American greed
Alan McIntyre
There were two significant events in the US banking industry over the last 48 hours. Two events which painted diametrically-opposed views of the health of the industry. The first was the release of the latest stress test results by the Federal Reserve.
Barring a couple of exceptions, US banks are now in as good a shape as they have been since the start of the financial crisis in 2007. They have rebuilt their balance sheets, they have paid off the government bailout funds (often at a profit to the US Treasury) and are even beginning to offer reasonable returns to shareholders, although still way down on the peaks of the halcyon pre-crisis salad days. Compared to European banks who continue to suck eagerly at the teat of the European Central Bank to the tune of a trillion dollars in low-cost funding, the US banking industry is giving off somewhat of a rosy glow. Despite all the talk of deleveraging and the need for long-run penance as the US consumers wean themselves off their debt-fuelled lifestyle of the last decade, there are even signs of life in the US credit markets. Corporate credit has been growing for many quarters, but last month saw the first expansion of US consumer credit since the dark days of 2008, indicating that the sluggish US economic recovery may actually be beginning to have some bottom-up momentum as the unemployment rate begins to fall. All this paints a picture of a banking industry chastened by the events of the last five years and now ready to play its role in the economic recovery, but under far tighter oversight and supervision.
The other significant event was what could be considered a ‘Jerry Maguire’ moment in tribute to the scene in the Tom Cruise movie when Jerry gets enlightenment that being a sports agent is actually a pretty scuzzy profession. In this case you can substitute investment banker for sports agent. In the Op Ed pages of the New York Times was an extended resignation letter from Greg Smith, a senior banker at Goldman Sachs. In about 1,000 words he lays out how the client-driven organisation that he joined over 10 years ago has morphed into a greed-driven money machine that views its clients as ‘muppets’ and which spends every minute of its management meetings discussing how it can extract more money from said muppets by selling them financial instruments they don’t need at prices which maximise the take for Goldman.
He describes how the interests of clients continue to be sidelined in ‘an environment that is toxic and destructive’. Of course this isn’t the first time that Goldman has been the target of hostile press attention over the last few years. Lloyd Blankfein, the CEO, was dragged before Congress last year to explain its dealings in the mortgage market and Matt Taibbi, an outstanding financial journalist from Rolling Stone of all places, coined the term ‘the vampire squid’, to describe the way in which Goldman reached out its tentacles to extract maximum economic gain from the toils and tribulations of the US economy over the last few years. However this is different. This is one of the tribe turning on itself. An insider who was part of the money-making machine calling it out for now being a group of mercenaries without a moral compass who have learned nothing from the last five years except how to better fleece their clients.
What I think Greg Smith pointed out this week was that there is a huge
gulf between short-term and long-term greedy and that the US
investment banking industry better wake-up to that fact.
Back in the late 1980s I nearly joined Goldman in London straight-out of university. As a private partnership it was renowned for its strong culture that emphasised collegiality, cooperation, humility and yes – doing the right things for its clients. I decided that my future didn’t lie in investment banking, but it was clearly the class act of the industry and it was tempting. If Greg Smith is to be believed, it has wandered far from that path of righteousness and will now find itself once again at the centre of a controversy.
Undoubtedly there will be insinuations that Greg wasn’t bound for the top, that he is bitter about decisions that went against him, that he is lashing out, and that he didn’t have the full perspective on how Goldman is being run. Even as I write this I am sure the formidable PR machinery of Goldman is being revved up to mount a defence. However, my own sense is that this muck will stick because of its source. Jerry McGuire didn’t end up changing the industry, but he did feel a lot better about getting it off his chest. Hopefully Mr Smith also has that benefit as he really shouldn’t be expecting an invite to the next Goldman alumni reception.
So what are you to make of these two stories in the same news cycle? A penitent banking industry on the way to recovery, or a malevolent parasite poised to once again undermine the US economy for an extra buck? The reality is that both are probably true. The US financial services industry is healthier, more regulated and more circumspect than it was pre-crisis.
The full impact of the Dodd-Frank legislation is still to be felt and the new Consumer Financial Protection Bureau is only now beginning to flex its mandate to pry into every corner of the industry to make sure consumers aren’t being ripped off. However, what the Greg Smith resignation letter shows is that no amount of regulation or oversight can change culture. That needs to come from the top. From leaders who believe in stakeholders as well as shareholders.
The old culture at Goldman was one that believed in being ‘long-term greedy’ and that success and wealth would come from putting clients first and trusting that over time that would play out in success for the firm. What I think Greg Smith pointed out this week was that there is a huge gulf between short-term and long-term greedy and that the US investment banking industry better wake-up to that fact.
As Lloyd Blankfein choked on his muffin this morning, I hope he thought about not reaching for the PR machine and instead lifted the phone to Greg Smith to have a conversation about culture and clients.
