Sub-prime mortgages, excessive leverage, risky investments. These sins of the bankers are well known. Some executives have publicly confessed and promised to amend their ways. Last month, Father Obama issued their penance: “What I say to these executives is this: Instead of sending a phalanx of lobbyists to fight this proposal or employing an army of lawyers and accountants to help evade the fee, I suggest you might want to consider simply meeting your responsibilities.”
Typical Obama: sit down, shut up, and do as you’re told.
Their presidentially-imposed “responsibilities” are new taxes — $90 billion according to the White House. These “financial crisis responsibility fees,” as Mr. Obama refers to them, are supposed to cover anticipated losses from the Troubled Asset Relief Program (TARP), so that henceforth banks can bail out already-bailed-out banks. The move is Obama’s latest application of Rahm’s Rule of Crisis Exploitation.
Obama’s proposal has met little resistance, as few politicians want to invest capital in bankers’ sub-prime reputations. Overseas, it is viewed as a precursor for an Obama-approved global tax on financial firms.
British Prime Minister Gordon Brown believes a global tax is a bloody great idea, and thinks the opportunity for social punishment of banks is ripe. It is important, he argues, that the “contribution banks make to society is properly captured.” Brown sees Obama’s Bank Tax as evidence that “support is building up for international action,” and the issue is at the point where “people are now prepared to consider the best mechanism by which a levy could be raised.”
Internationalists have been trying for decades to implement a direct tax to fund the United Nations and its system of global governance. The bank tax is one of several options receiving attention. Also being considered is a Tobin Tax — a levy on international financial transactions — named after the late U.S. economist James Tobin. This idea has been endorsed by German and Greek Prime Ministers Angela Merkel and George Papandreou; Adair Turner, chairman of Britain’s Financial Services Authority; French Prime Minister Nicolas Sarkozy, and a host of others.
French Foreign Minister Bernard Kouchner argues that a Tobin Tax will be “painless” and is “no longer merely an option.” When “the international community deems it timely,” Kouchner says, “I have no doubt that the UN will one day adopt this system.”
He may be right. The G-8 and the International Monetary Fund (IMF) are studying the idea with reports from each due out soon. The World Health Organization (WHO) has already issued its own, calling for global taxes to fund health research.
One WHO proposal is a tax on consumer products such as alcohol, tobacco and firearms. Their reasons are two fold: first, to raise revenue; and second, “to discourage (excess) consumption.” They also want Internet users charged fees for the e-mails they send. Bank taxes and airline taxes are considered favorably. These global taxes, the WHO states, should be viewed as “humanitarian contributions” for an “altruistic purpose.”
The WHO concedes that implementing a global tax “may require legal changes, nationally and internationally,” as well as “ongoing regulation to ensure compliance.” They prefer compulsory taxation to voluntary contributions, correctly reasoning that it is only on “rare occasions…when a tax is removed.”
Back in the UK, a coalition of leftist NGOs lead by Oxfam, are campaigning for a “Robin Hood Tax” amounting to $400 billion annually. It’s an amount that “will hardly be noticed by those paying it,” according to one advocate. Their bank-bashing message echoes that of Brown and Obama. “Banks, which had a large role in causing the economic crisis,” NGO executives wrote to British authorities, “should do more than just pay back the bailouts…It is time for a new, practical contract with banks to improve the society they serve” — i.e. global responsibility fees.
The idea for a global tax is nothing new, but the attention it is receiving from people who are capable of making it a reality is. Whether it is a tax on banks, currency transactions, airlines, or e-mails, global tax proponents see unprecedented opportunity to win White House approval. In fact, they believe the president has already moved in their direction. If Mr. Obama is eager for a second Nobel, he’ll do it, explaining to the America people that they caused most of the world’s problems and suggesting they “might want to consider simply meeting their responsibilities.”