By Amitabh Pal on February 08, 2013

A recent analysis reinforces the case for a financial transaction tax in the United States.

The idea has been around since the 1970s in one form or the other (I have a more than a decade-old poster for the tax up in my office). Now, Jesse Eisinger in a piece for ProPublica and the New York Times strengthens the justification for such a levy.

Eisinger makes a convincing argument that a tax of this sort would not be hard to collect, would calm down the irrational speculation that has harmed all of us, and would help reduce the federal deficit.

“The average American, who has limited exposure to the stock market, has little to fear from the tax and much to gain,” Eisinger writes. “And if some of the high-frequency trading flees offshore? Good riddance.”

Eisinger’s reasoning has been backed up by others. Nobel laureate Joseph Stiglitz has also stated that the tax wouldn’t be too difficult to enforce due to the advent of modern technology. Plus, “the financial sector polluted the global economy with toxic assets and now they ought to clean” up, Stiglitz said a few years ago.

Europe is getting its act together. Eleven countries on the continent, including France and Germany, are getting the ball rolling on such a tax. But the Obama Administration has been a major roadblock to anything of that sort happening here.

As Ron Suskind reported in “Confidence Men,” his must-read account of economic policymaking under Obama, the President was sabotaged by his own underlings like Lawrence Summers and Tim Geithner.

“ A financial transactions tax on banks and financial institutions, to try to tame the trading emphasis that has swept those industries and along the way, raise money: Obama said, in one meeting, ‘We are going to do this!’ ” Suskind wrote. “Summers disagreed; it never materialized.”

And Geithner provided a more public face for the same pig-headedness.

“That's not something that we're prepared to support,” Geithner responded when then-British Prime Minister Gordon Brown proposed a global transaction fees in 2009. With assistance from the IMF and Canada’s conservative government, the Obama Administration shot the idea down.

Geithner was so hell-bent against the tax that he alienated our allies.

In 2011, Geithner “even chastised Europeans for moving towards implementation of such taxes in their own territories, prompting angry words from the Austrian finance minister,” writes Sarah Anderson of the Institute for Policy Studies.

Jacob Lew, his incoming replacement as Treasury Secretary, offers scant hope, since he doesn’t seem to have a basic understanding of financial markets.

“I don't believe that deregulation was the proximate cause” of the economic crisis, he said during his 2010 Senate confirmation hearing for his position as Office of Management and Budget director.

Progressives in Congress are trying to move forward undeterred. Iowa Senator Tom Harkin and Oregon Congressman Peter DeFazio are reintroducing a bill asking for a tax of 3 cents per $100 of transaction. DeFazio has cited a Joint Tax Committee study that his bill would raise more than $350 billion in revenue over a decade.

But, in spite of the many benefits of his proposal, DeFazio knows that the Obama Administration is on the wrong side.

“That’s all they’re about,” DeFazio told the Washington Post in 2011. “They are going to defend speculators until their dying breath.”

The Obama Administration needs to see the light here—before its Wall Street friends destroy the global economy again.

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By Wendell Berry

Manifesto: The Mad Farmer Liberation Front

Love the quick profit, the annual raise,
vacation with pay. Want more 
of everything ready made. Be afraid 
to know your neighbors and to die.
And you will have a window in your head.
Not even your future will be a mystery 
any more. Your mind will be punched in a card 
and shut away in a little drawer.
When they want you to buy something 
they will call you. When they want you
to die for profit they will let you know. 
So, friends, every day do something
that won’t compute. Love the Lord. 
Love the world. Work for nothing. 
Take all that you have and be poor.
Love someone who does not deserve it. 
Denounce the government and embrace 
the flag. Hope to live in that free 
republic for which it stands. 
Give your approval to all you cannot
understand. Praise ignorance, for what man 
has not encountered he has not destroyed.
Ask the questions that have no answers. 
Invest in the millennium. Plant sequoias.
Say that your main crop is the forest
that you did not plant,
that you will not live to harvest.


Say that the leaves are harvested 
when they have rotted into the mold.
Call that profit. Prophesy such returns.
Put your faith in the two inches of humus 
that will build under the trees
every thousand years.
Listen to carrion—put your ear
close, and hear the faint chattering
of the songs that are to come. 
Expect the end of the world. Laugh. 
Laughter is immeasurable. Be joyful
though you have considered all the facts. 
So long as women do not go cheap 
for power, please women more than men.
Ask yourself: Will this satisfy 
a woman satisfied to bear a child?
Will this disturb the sleep 
of a woman near to giving birth? 
Go with your love to the fields.
Lie easy in the shade. Rest your head 
in her lap. Swear allegiance 
to what is nighest your thoughts.
As soon as the generals and the politicos 
can predict the motions of your mind, 
lose it. Leave it as a sign 
to mark the false trail, the way 
you didn’t go. Be like the fox 
who makes more tracks than necessary, 
some in the wrong direction.
Practice resurrection.

Wendell Berry is a poet, farmer, and environmentalist in Kentucky. This poem, first published in 1973, is reprinted by permission of the author and appears in his “New Collected Poems” (Counterpoint).

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