My worry is that President Obama’s overly ambitious political agenda will take a toll on business, hurting investment and growth by spending massive new sums of taxpayer money and imposing a daunting thicket of new and higher taxes, new regulations, scattershot federal crackdowns and brand new government bureaucracies.
One year into office—and with the S&P 500 index up more than 60% from its lows ten months ago—President Obama continues gleefully as Bank-Basher-in-Chief. He’s out today making bankers the bad guys, even though we need them for a full comeback.
Proposing $90 billion in new bailout fees over 10 years, the President says “my determination is only heightened when I see reports of massive profits and obscene bonuses at the very firms who [sic] owe their continued existence to the American people—who have not been made whole. . .”
Wait a minute! A hefty portion of those profits flows right into tax coffers, and with trillion-dollar deficits the government needs all the bank profits it can encourage. Many of the biggest banks—J.P. Morgan Chase , Goldman Sachs and Morgan Stanley among them—already have paid back TARP. They repaid the entire sums, plus interest and dividends, that the government handed them (and forced on a few of them) under the Tarp bailout plan.
So why does Obama want to make them pay twice—and spare several hundred smaller banks that also got TARP money? Over all, TARP, originally set at $700 billion, now looks likely to cost less than $100 billion. And the Fed just turned a $45 billion profit on its separate rescue efforts. A profit!
This latest slap-tax on giant banks, and the hue and cry over compensation, isn’t really aimed at making “the people” whole—not at all. It is, rather, a cynical ploy by Washington to divert attention away from an unemployment rate still stubbornly at 10%, higher than when Bam took office. Best distraction: Blame the banks!
It is part of a deleterious new mindset in Washington that criminalizes capitalism and decries wealth creation. After 30 years of less-government-is-better, the Obama Posse wants to ensure that Big Government is the only answer. And Big Government requires fat taxes.
So many new taxes have been proposed that Americans for Tax Reform, a conservative, anti-tax group, can’t clock a grand total. Ryan Ellis, the lobby’s tax policy director, pegs the total at somewhere near $200 billion a year in new and higher taxes.
“If the goal is to create 1970s stagflation,” Ellis says, “permanently hiking taxes by hundreds of billions per year is a good way to do it.”