Thursday, January 14, 2010

Paying Back America with Interest...Sort of

The President today announced he is proposing "Financial Crisis Responsibility Fee" which would be imposed on the fat cat bankers and firms who received tax payer relief. He also added this stinger, "If these companies are in good enough shape to afford massive bonuses, they are surely in good enough shape to afford paying back every penny to taxpayers." It sounds awfully nice.

Steven Benen:

The plan is to raise $90 billion over the next decade -- which, for this industry, isn't exactly an overwhelming burden -- with this new "fee." It would be applied to about 50 banks, insurance companies, and Wall Street trading houses with assets of more than $50 billion. The tax would remain in place until the funds are recovered, though it would be scrapped before the end of the decade if the $90 billion is returned ahead of schedule.

Would the costs prove counter-productive if/when the banks passed along the costs to customers? The Obama administration doesn't believe so: "Firms that raised prices would give smaller rivals a competitive advantage, creating an incentive for companies instead to swallow the cost, potentially by reducing employee pay."

"It is in many ways offensive for those at our major financial institutions to suggest that they can today afford excessive, often outlandish bonuses for their top executives but cannot afford to make whole the taxpayers," a senior administration official said. The new fee, the official said, is "the least they could do."

Given that the plan requires congressional approval, it will be fairly interesting to see Republicans come up with a way to sound populist while siding with Wall Street and fighting against the "we want our money back" message. NBC speculated this morning, "[I]t does put Republicans in a box. It forces them to make a choice of siding with the banks or not. And who is going to want to argue that banks shouldn't pay for their own bailout?"

And given that the "Financial Crisis Responsibility Fee" is actually quite modest, it makes inevitable GOP opposition that much less defensible.

Man, he is just like Bush. So disgusting how Bush like that Obama is, right? I know this is talk and not exactly what some would like to see, but it is a start in the right direction. This is one big mess we are on the hook for, but with added financial regulation maybe we can gut check these firms into you know behaving like humans, instead of Masters of the Universe.

We can only hope. (damn there is that WORD AGAIN. HOPE. Darnit said it again, someone burn off my fingers. stop me. can't not type. h.o.p.e....)

I am Frank Chow and I approved this message

p.s. FiveThiryEight, how you like dem apples?

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