And just, as Hester (pretty unbelievably) said, "So they don't feel unfairly discriminated against."

That's what Stephen Hester is proposing to do with your money and mine. We will pay the remaining investment bankers £1.3billion out of the pretend profits (RBS made a loss of £3.6billion, of course) of the investment bank division.

We are giving them this to stop them leaving in their further thousands, presumably. Even though Hester specifically states that they are not very good at their job and really should have generated another £1billion in profits. Kerching!

Clearly we're not all in this together. RBS (84% owned by the taxpayer) made us a £3.6 billion loss (add that to the deficit please!). If we didn't pay out the £1.3billion and invested it back into the business, then we would have made a loss this year of only £2.3 Billion. This is fantasy economics led by the fantasy accounting that got us all into this mess in the first place.

Hester and others are trying to persuade you and I as taxpayers that we must believe in the future, not the past. If we shell out £1.3billion today to the investment bank division that will mean they will repay that £1.3billion (and then some) back by future profits which today's bonus awards will er....incentivise into existence.

We have to start batting away this nonsense thinking because no-one outside the industry and, apparently, the government believes this.

In the real world (if that might intrude for a monent, Mr. Hester) if one division or department of a business was performing well, but the performance of the rest led to the business making massive losses no-one would start talking about bonuses to anyone to 'incentivise future profits'.

Especially if the department performing well was simply not facing the same challenges as the other departments and circumstances made it easy to make those profits.

The RBS investment banking division saw over the last year a rapidly rising stock-market and a massive growth in international government bonds and sovereign debt for investment bankers to invest in and swap around amongst only a few players. No wonder they made a profit - it's not actually that difficult in the current conditions.

One has to wonder, like Mr. Hester, why they didn't make more!

The problem with Hester is that, like many in the banking sector and the wider private sector, he wishes that the future can return to being the past. What a comfortable, easy-money place that was. If we invest now in bankers, they will come good for us all in the end. That's a future we can all believe in, eh? They will re-create the past. We can all go back to the way we liked it.

Doing the same thing again and again and expecting a different result is one definition of madness.

And as L.P. Hartley wrote in The Go-Between: "The past is a foreign country: they do things differently there."

What we all have to realise is that we will not be paying a return visit to that foreign country ever again. A coup d'etat took place there, it's a failed state, it's too dangerous.

What we now need are people who can play the new game, not the old game. The current staff at RBS investment banking only have qualifications in the past, and bonuses themselves are creatures of the past.

In particular, RBS is in complete denial about the fact that commercial property is the problem. In the USA, Commercial Real Estate (CRE - they pronounce it "cree") is what is at the heart of the present problem with their banking system (like ours) not getting investment into businesses and people.

Banks in the U.S.A. are today having to set so much in current and ongoing expected losses in cree against any profits that, by the time they have met basic fed-required capital requirements, there's nothing left to get to business. Or rather nothing available without massive fees, charges and interest rates which, as night follows day, stops demand. They then say (as the banks over here have said) that businesses don't want loans. What a surprise.

This is a feature of now, not the 2008 collapse. Yesterday's senate hearings with Fed Boss Ben Bernanke laid this 'now' problem bare for all to see.

As David Bailey and I have pointed out here before, all of the Collateralised Debt Obligations and Credit Default Swaps and Securitizations and Sub-prime mortgage bundling were merely symptoms of a failed overall system which ultimately went bust back in 2008. They weren't the problem itself. Some people think it was, and that this problem has passed into the past.

In 2010 we have what remains following that collapse; and in the USA and in the UK the core banking problem is cree. And the problem is that RBS is swimming in cree.

Staff who can get hold of and deal with today's problems are the real assets here, not investment bankers in a fantasy separate division of blind hope.

We need staff who can address how we can come up with ways of dealing realistically with the masses of commercial real estate "assets" continuing to drag the rest of the economy down. This is not about past losses; this is about losses now. In RBS it's about losses on cree all around the world, not the UK: especially in eastern europe, near Europe and in the Middle East (e.g. Dubai). Happening now.

We can't gamble our way out of the problem and that's exactly what Hester is expecting us all to do by paying these bonuses. They should be taxed at 100%, if paid, never mind 50%.

We are paying bonuses into a pool of people who only know how to work in the past.

Wake up and smell the cree.