Americans are angry with a lot of things, and the thought of a second Great Depression is moving up their list of woes as unemployment and the budget deficit continues to rise.
The political repercussions of deteriorating American life are hitting both republicans and democrats alike. According to recent polling data, just about everyone is unhappy with the direction the country is heading. With the mid-term elections looming in the not-too- distant-future, politicians are scurrying to raise their poll numbers like cockroaches on a pile of garbage.
In his latest efforts to improve his own reflection, President Obama is pointing his legislative gun at the big banks that took the bulk of bailout money. In short, he wants them to give the taxpayers their money back. His latest plan is to tax their record profits.
“The administration previously rejected two ideas that have received much attention in recent months: a transaction tax on financial trades and a special tax on executives’ bonuses. The most likely alternatives would be a tax based on the size and riskiness of an institution’s loans and other financial holdings, or a tax on profits.”
The root of the problem is the bailout itself. Instead of making loans to shore up the economy, the banks hoarded it and took advantage of the Fed’s zero percent interest rates to boost their own bottom lines.
Not surprisingly, banking lobbyists are complaining. “A tax will decrease their ability to lend,” according to Edward L. Yingling, CEO of the American Bankers Association.
Perhaps the real reason the banks are against joining the ranks of the taxpayers, is because it may simply decrease their ability to hand out multi-million dollar executive bonuses. All the more reason for the US Treasury to create a new federal bank to make their own loans in direct competition with the too-big-to-fail culprits of Wall Street.
Economists agree, time is running out for a solution to our financial problems.
“Former IMF chief economist, Simon Johnson said, the “financial industry has effectively captured our government and is blocking essential reform, ” adding “if we cannot break its suffocating grip on Washington, we will not be able to stop the Great Depression 2.”
If President Obama is not able to get a handle on the banks, they may take us all down.
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