There's a wave of anger at Wall Street and the big banks, which are doling out huge bonuses while the rest of the country is still suffering. That is giving the White House the fortitude to finally take on the banks by imposing fees worth tens of billions to cover TARP costs. We should see the plan over the next couple weeks -- and it will be included in the President's budget, which is due by February 1st. It's a wise move:
The general idea is to devise a levy that would help reduce the budget deficit, which is now at a level not seen since World War II, and would also discourage the kinds of excessive risk-taking among financial institutions that led to a near collapse of Wall Street in 2008, the officials said.Whatever the policy considerations are, finally taking on the big banks is a smart political strategy.
But the president also has a political purpose — to respond to the anger building across the country as big banks, having been rescued by the taxpayers, report record profits and begin paying out huge bonuses while millions of Americans remain out of work.
The administration previously rejected two ideas that have received much attention in recent months: a transaction tax on financial trades and a special tax on executives’ bonuses.
Last month, the leaders of Goldman Sachs, Morgan Stanley and Citigroup blew off a meeting with the President because they couldn't make it all the way from New York City to Washington DC. Such hubris. Maybe they should have made the effort after all.
