Pat Garofalo of Wonk Room:
Of course, the banking lobby is up in arms:
Edward Yingling, president and chief executive, American Bankers Association: “To impose yet another burden on the industry would obviously decrease their ability to lend.”
Scott Talbott, head of government affairs, Financial Services Roundtable: “Placing additional taxes on top of the new regulatory burdens will stifle the industry just as the economy is beginning to recover.“
Yingling also referred to the proposal as “perplexing,” while another banker called it an “absurd idea.” The main argument coming from the banks is that they either already have or are in the process of paying back TARP, and that any losses are going to come from either the automakers or AIG.
Garofalo also points out that the administration should be using the banks reluctance as a political play since it was government intervention that propped up our economy. Banks effectively would have been S.O.L. without us and Obama needs to make sure they don't get away with playing victim. We would all like other avenues as well to reign in the banks such as what Garofalo proposes taxing bonuses and a popular idea of taxing transactions. However, I think the political realities of those two are far less likely.
I for one am with Taibbi, this is a long time coming:
One has to wonder whether Goldman Sachs and Lloyd Blankfein are finally having their come-to-Jesus moment today. It seems an awful lot like the Obama administration is seriously considering going after bailout monies given out last year, almost certainly involving counterparty payments made to banks like Goldman via the AIG bailout.
I have more on this coming out later, but from where I sit this wouldn’t be happening if Blankfein and people like him hadn’t put Obama on the spot politically by babbling to reporters about how they’re doing “God’s work” and that sort of thing. Instead of acting contrite, these guys asked us all to take a big bite of blow-me sandwich. How’s that working out now, fellas?
One wonders sometimes what goes through the mind of people like this.
Will we have an EGO landing? I won't hold my breathe, but this shouldn't really be a tough decision for the administration. You know...considering...this..."there are approximately 50 percent fewer job openings for the 15.3 million U.S. citizens who are officially unemployed."
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Update: More from Digby