An alternative to popular faith
Here is the key sentence from an article by Jackie Calmes, Published: January 11, 2010 in the The New York Times:
“With popular anger building as big banks show profits and pay sizable bonuses while unemployment remains high, the Obama administration has come under pressure at home and abroad to support a financial transactions tax on institutions and to heavily tax their executive compensation.”
What an amazing sentence.
First, consider the popular anger that “big banks show profits . . .” Would the citizenry prefer bank losses caused by bad bank management? What’s the approved size for profits?
Second, consider the “sizable bonuses.” Banks are businesses. What should they do with profits aside from pay employees and shareholders? Are other businesses held to that standard?
Third, consider “unemployment remains high.” What is the relationship here? Should banks hire millions of people, to get the employment rate down? Or, should banks engage in less than optimal business strategies, like lending to bad risks, to get the profits down?
Fourth, consider the “financial transactions tax on institutions.” Get real. Any tax on a business is passed along to its customers. Ultimately, you and I will pay that tax.
Fifth, consider “heavily tax their executive compensation.” A special tax created just for bank executives? What about a special tax just for Walmart executives? What about a special tax just for executives who live in New York, preferably Long Island?
Nothing could better demonstrate the financial ignorance of the Obama administration. Or if it’s not ignorance, then it’s worse: pure pandering to populist, class-warfare motives. Oh, it temporarily might make you feel good to “get those rich jerks,” until you realize (if ever) that you are the one getting the shaft.
Rodger Malcolm Mitchell