President Barack Obama Thursday proposed Wall Street banks pay $90 billion over 10 years to reimburse taxpayers for the financial bailout, as he slammed bankers for their "massive profits and obscene bonuses."
Photo By: Pete Souza
President Barack Obama
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Striking a populist tone, Obama called for a fee on the biggest U.S banks to "recover every single dime" the government spent rescuing the financial sector from its worst crisis since the Great Depression.
"My determination to achieve this goal is only heightened when I see reports of massive profits and obscene bonuses at some of the very firms who owe their continued existence to the American people," Obama said, reflecting increasingly harsh rhetoric toward the financial industry.
"We want our money back," he said.
The White House hopes a tougher line with Wall Street will resonate with an American public furious at multimillion dollar bonuses being handed out by banks as the middle-class struggles with double-digit unemployment.
Personally i don't think Obama is able to ask for the money back after bailing out many large corporations and then taxing them even more. The administration can't expect money to work it's way through the economoy as much if they are giving people money and then asking for most of it back. They chose to give out money a certain way rather than making sure these banks couldn't spend the money on bonuses and whatever they wanted.
If they do have to pay this money back over ten years, what will the 90 billion dollars leaving the economy that could be spent on goods affect? Could that money have created a lot more jobs?
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I do believe that the big banks have a need to give back to the people and realize that maintaining some of the same practices taht got us intoa financial crisis is not helpful and is deeply scorned by tax payers who are anxious to see improvements from their bailout money.
ReplyDeleteAt the same time, it almost seems, as the article says, that Obama is meerly "striking a populist tone" to regain slipping support from the people. As you stated, the money should have come with rules like "making sure these banks couldn't spend the money on bonuses and whatever they wanted." That could also, I suppose be seen as government trying to control banks. But it seems as though some guidelines on obvious proper uses could have served our country well.
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I'd appreciate it if you (and everyone, for that matter) could make sure to cite their articles, just so people can have the full background as well as the slant of the source. I'm not sure if you got it from here, but it looks similar to an Investor Business Times article (ridiculously slanted to the Right,): http://www.ibtimes.com/articles/20100114/obama-proposes-bank-fee-slams-wall-street.htm
ReplyDeleteGiven the bias evident in the article, their few true facts stand out. Most importantly, they specify that Obama's words and the proposed program is a response to the TARP program: Bush's bailout. Yes, Obama and many other Democratic representatives went along with this no-strings attached bailout and should be faulted for such. This does not, however, mean that they can't make their token demands on the behalf of the American people. They should have done it right the first time, but they didn't, and now they need to make up for it.
In response to your questions at the end, I would argue that there needs to be higher regulations and caps on executives in the first place. The amount to which the top ten percent is taxed today is minuscule compared to what it was taxed during the years of FDR through Carter, yet somehow they survived and the economy flourished. Those at the top have an un-American disregard for the well-being of others, as seen in the bonuses provided to those at fault for the worst abuses leading up to the financial crisis at the same time as the average real wage has declined. This can be seen at http://www.workinglife.org/wiki/Wages+and+Benefits:+Real+Wages+(1964-2004) which obviously has its own slant, so I checked the Bureau of Labor Statistics and found that, in November 2009 the average real wage was $283/wk and has stagnated since ~1979 (http://www.bls.gov/cps/labor2006/chartbook.pdfsearch "real earnings")