The other day the president of the European Commission gave a speech before the European Parliament calling for a transaction tax on stock, bond and derivative trades. The very considerable sums generated by such a tax will be needed to help refinance banks after Greece defaults, which just about everyone now understands will happen soon.
The Obama Administration, however, strongly opposes such a transaction tax (also known as a Tobin Tax after the man who originally proposed it) in this country, in spite of our own need for revenues to address huge budget shortfalls. And in spite of Mr. Obama’s recent calls for “the rich to share our economic sacrifices,” which apparently, in his view, does not include the Wall Street rich, who make a ton of money trading stocks, bonds and derivatives.
To understand the politics behind this let-Wall-Street-play-free policy of the White House is to understand something very basic about the Democratic Party. About this party’s present disdain for its progressive populist roots. About its devolution from a party whose main goals were serving the interests of Main Street working people and providing aid to those rendered needy by circumstances beyond their control, to a servant of Wall Street.
It is, of course, totally appropriate that in this country there be a major political party whose primary aim IS to service Wall Street wants and needs. The Republican Party. That the present Democratic Party has adopted this priority as well is not simply shameful, it undermines a greatly needed balance in our national policy setting.
What brought about this sad devolution? The answer is simple and straight forward. In the 1990s the Clinton Administration bonded with The Street, whole-heartedly promoting the so-called American Consensus that gave it free reign to spread its wildly profitable and predictably destructive proclivities worldwide, and in return got huge gobs of campaign cash on which the national Democratic Party still feeds.
Mr, Obama and others in the flagrantly misnamed “centrist wing” of this party continue to adhere greedily to this deal. And this, not the flimsy economic rationales Secretary Geithner employs as excuses to put the kibosh on a Tobin Tax, is why the Obama White House isn’t pushing the idea. (The ever Wall Street-friendly Republican Party, naturally, happily goes along.)
A Tobin Tax on these shores, then, is more than a revenue raiser, more than a way to lessen the influence of the computer-generated flash trading that has so warped markets in recent years. It would be a dramatic assertion that Wall Street doesn’t own the Democratic Party any longer, with all the changed policy priorities that would come in the wake of this assertion.
Wall Street money is already oozing its way back to the Republican Party via contributions to Mitt Romney. And that’s where all of it should go. When it stops oozing to Washington Democrats as well, their party might again deserve the full support of progressives, the respect of independents, and even the grudging admiration of many Tea Partyers who have long been railing against Wall Street crony capitalists.
Listen up progressives! Demanding a Tobin Tax has a huge transformative potential. The power to shake up the Democratic Party the way the anti-any-tax crowd has shaken up the Republican Party.
This tax is the progressive’s wedge issue. Use it.
More from this writer at wallstreetpoet.com