by Bill Kavanagh: A tax on bank debt and a tax on large bonuses to bankers sounds about right as a way to recover the public's investment in the financial system— and a way to participate in the tremendous upside our investment has provided to the bankers running the financial companies. The tone-deaf cries from financial CEOs that they will cut back on loans if the debt tax goes through only makes it more certain that the public will demand it. And a tax on banker bonuses is better focused than clumsy attempts to limit pay. It also puts some of the bonus money in the public's coffers instead.
One hilarious reaction came from JPMorgan Chase CEO Jamie Dimon, who thought it was unfair that the tax would only apply to banks with over $50 billion in assets. He wasn't so concerned with getting a huge share of TARP money and his ability to buy up WaMu as a result, but a tax on his windfall, that seemed inequitable. Dimon had just described the financial crisis to the Financial Crisis Inquiry Commission as, "something that happens every five to seven years. We shouldn't be surprised."
If it turns out that the banks help finance stimulus in this way, maybe we can even get unemployment under control before several more years go by. Wouldn't that be lovely? I'm not holding my breath that this will be anywhere near enough, but it wouldn't hurt.
(Bill cross-posts at Bill's Big Diamond .)
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