Here’s how public officials speak in Washington. They raise their voices loudly in defense of the little guy on Main Street. They scold, threaten, bang the table and roundly condemn predatory and greedy groups that are waxing fat at the little guy’s expense. Then they turn around and do the bidding of these same predatory and greedy groups.
This game, practiced endless by both Republicans and Democrats, has now clearly been mastered by the Treasury’s Tim Geithner. In recent days his growing skill in such gaming was on view for all to see.
First there was the damning of those naughty money-crazed Wall Streeters. He verbally skewered them for the outrageous size of their bonuses. He pointed out, quite accurately, that they would have failed last year, would not have even survived, without government bailouts. And now, after being so well taken care for by the government (i.e. by us, the taxpayers), they not only rub our recession scrapped noses in their extraordinary compensation gush, they won’t even extend needed credit to consumers and small businesses that public money was ultimately supposed to help.
Well spoken, Tim. That’s telling ’em, guy. Except…
Except at the same time Tim was making verbal shame-shame at Wall Street, he has been doing everything he can to scuttle something that would greatly enrich the public purse by taking back a bit of the obscene and undeserved Wall Street compensation he is verbally assaulting — the so-called Tobin Tax, a tiny (one-half percent) tax on stock trading transactions.
He opposition to this tax rings hollow, very hollow, even by the absurd standards often applied to any new tax proposal these days. He says it will hurt “retail investors,” the little guy. It won’t. If you or I trade $1,000 worth of securities, a Tobin transaction tax comes to $5 — chump change even for little chumps. The tax would really only hurt the profits of folks like those at Goldman Sachs that churn fast and often to take advantage of tiny stock price moves, something that benefits the overall economy not at all.
Tim also had the nerve (some might even say the gall) to state that “I have not seen a version of that tax that works…Otherwise people would have done it a long time ago.” Dah. The Tobin Tax, named after an economist named Tobin, was first proposed in the early 1970s and would be one of the easiest taxes to collect because wherever the traders are, the central clearinghouses where transactions are consummated at few, known to all, and easily monitored.
As for never being done before? Its only opposition from people like Tim Geithner and the interests he represents that have been the obstacle to that happening in the past. And these days there’s never been such egregious examples of Wall Street greed at the expense of the general public at a time of government solvency challenges that make such a tax so necessary, desirable and equitable.
In Britain there’s a plan afoot to tax excessive financial industry bonuses. Maybe that’s a little too sane and sensible to expect on these shores given the political clout of Wall Street. But a Tobin Tax that actually has the potential to raise enough money to fund the entire health care reform now before Congress, without impairing any sector of the economy except the Wall Street pig trough, that might actually be feasible — if Tim Geithner backs off.
One other political note here. FDR got elected for the first time in 1932 at the height of the Depression. When he ran for reelection in 1936 he won again, in spite of the fact that a Depression was still well and truly underway. And the Obama Administration might be wise to focus on the fact that one of FDR’s great weapons in the ’36 election was that he was “running against the banks.”
Please do stop with the anti-Wall Street blowhard act, Mr. Geithner, and really, really run against Wall Street. You might not see the difference between words and reality. The rest of us do, however, to your boss’s great detriment.