There was an odd editorial in the New York Times yesterday which advocates Obama's idea to impose a windfall tax on those bad banks that made record profits, even those that have paid back the TARP funds. Here's an excerpt:
The White House is talking about levying a tax or fee on large banks to recover the $120 billion it spent to bail out the financial system. That is a good place to start, but it shouldn’t stop there. President Obama and Congress should also impose a windfall tax on the huge bonuses that bailed-out bankers plan to pay themselves over the next few weeks.
This is an issue of fairness and sound public policy. The Treasury needs the money. A fee may also get banks and bankers to rethink the way they do business — something the much-promised, far-too-delayed and increasingly watered-down financial regulatory reform effort is unlikely to do. A permanent tax or fee imposed on the nation’s largest banks could reduce future risks by discouraging big banks from getting even bigger.
How is penalizing the banks an issue of "fairness and sound public policy"? Let's say you are self-employed. If your uncle lent you $1000 to bail you out of a messy situation at work, and then you paid him back with interest (and in some situations, your uncle 'forced' you to borrow the money), then you went on to have a banner year the following year, wouldn't you hope that your uncle said "Bravo! Glad you turned your business around!"?
In our free market system, where does the government get off changing tax laws after the fact? How does making the rules of commerce completely unpredictable (and these days apparently dependant on friends in high places) make for "Sound Public Policy".
The kicker is the line, "The Treasury needs the money". Who doesn't? Is the NYT editor suggesting that "from each according to his ability, to each according to his needs?" Seems like I heard that one before. Oh right, Lenin and Marx.
And just to make sure that banks realize how naughty they are to dare to be successful and outcompete other banks, the editor continues, let's penalize them and cap their ability to grow. That will teach them. Bad Banks!
The editorial continues to recommend coordinated global banking regulation and taxes on big banks. Let's just pooh-pooh that little thing called sovereignty.
And editor concludes by saying that a windfall profits tax on the big banks would be an excellent way for the Obama administration to start plugging the budget gap. Sounds like stealing to me. Like Capone, we gotta steal from where the money is.
What has this country come to when the supposed premier national newspaper spouts such marxist nonsense? I guess I shouldn't say nonsense, as these viewpoints appear to be widely held at the Whitehouse.