The attack by Jeff Immelt, General Electric’s chief executive, on “meanness and greed” among business leaders is an interesting straw in the wind.
His speech at West Point coincided with the decision by Alistair Darling, the UK chancellor of the exchequer, to levy a 50 per cent windfall tax on the bonus pools of banks operating in Britain.
In his speech, Mr Immelt said:
“We are at the end of a difficult generation of business leadership … tough-mindedness, a good trait, was replaced by meanness and greed, both terrible traits. Rewards became perverted. The richest people made the most mistakes with the least accountability.”
He added that it was wrong for the US economy to have “tilted toward the quicker profits of financial services” and away from manufacturing industry and research investment.
Taken together, the implication of these points is clear. There is something distorted about an economy in which extremely high rewards go to relatively few people in financial services.
Mr Immelt’s remarks are the latest - perhaps the strongest – among business and financial leaders calling for self-restraint and a change in attitude.
Such appeals have fallen on deaf ears. As the FT reports, many bankers in the City were not only furious at the windfall tax but also threatened to move overseas in protest.
Whether or not that is plausible – since the tax is a one-off levy, it is unlikely too many people will move home permanently – it indicates a yawning gulf in attitudes.
Many people – probably most – believe that bankers’ bonuses are profoundly unfair, especially since they were not curtailed in the wake of the financial crisis. Meanwhile, bankers regard themselves as victims of populism kindled by politicians and the media.
The significance of Mr Immelt’s speech, I think, is that the leader of one of the biggest companies in the US is willing to say publicly what many non-business people feel.
Leaders in non-financial industries have worried since last year about being tainted by the behaviour of bankers. Now, it seems, they are running out of patience.
