“We want our money back,” cried President Obama yesterday, “and we’re going to get it!” Announcing a Financial Crisis Responsibility Fee — a tax perfectly named for an era in which banks are held responsible for a recession that was beyond their control — the president promised American taxpayers that they would get “every single dime” which they are “owed” back. Don’t expect a tax cut any time soon though. “Back” here means: right into the state coffers for the government had had to borrow that money in the first place.
The fee will be in place for at least a decade with the possibility of being prolonged for as long as it takes to get the TARP money back. Only “large” firms are subject to the new regulation. Banks that hold less than $50 billion in assets are not affected. Indeed, the White House boasts, so much as 60 percent of the revenue will come from just the ten largest banks.
Describing TARP as “a distasteful but necessary thing to do,” the president admitted that against expectations, most of the money has been recouped already. But “most” is not enough. “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.”
Not only are banks distributing bonuses again — which in itself is something the administration thinks they should be ashamed of — they are “once again engaging in risky bets to reap quick rewards,” said Obama and that does not “reflect what the country has been through.” It looks like “business as usual” to the president and for whatever reason, America can’t go back to that.
Wall Street is protesting. First, the government bailed them out because they were supposedly “too big to fail,” upsetting the natural order of the free market by rewarding failing businesses. Next, the very same financial institutions were held responsible for a crisis that started in the single-most regulated sector of the US economy — the housing market. Now, they are further penalized for a crime they did not commit as the White House announces a largely redundant policy that only reinvigorates existing misconceptions and hatred of the financial sector at large.
The president sees things differently. He denounced the “twisted logic” of Wall Street that supposedly argues that it would be “more appropriate for the American people to bear the costs of the bailout, rather than the industry that benefited from it,” adding, “even though these executives are out there giving themselves huge bonuses.” And these monocle-wearing, cigar-smoking big shots are complaining they’re being treated unfairly?
In fact, they are. Most banks didn’t ask to be bailed out. Rather they were coerced into participating in TARP and they paid back the money as quick as they could. Getting it all back is one thing. Demanding that they change their way of doing business is a serious infringement on their freedom of enterprise and shouldn’t be the policy of any government. That public opinion appears to be against banks and bonuses shouldn’t be reason enough for the Obama Administration to persecute them or capitalism as such. Such is the government of whim and it does not become a republic as the United States.