Top Economist: Obama Bank Tax Is a Con
It’s a challenge to put it politely – one of the nation’s leading economists says the bank tax promoted by President Obama is a sham.
“President Obama is at it again-pandering to rich and powerful political supporters, while portraying himself the guardian of the exchequer and champion of the little guy,” asserted Dr. Peter Morici in a commentary. “The president says his proposed tax on the capital of the largest banks and financial institutions is intended to recoup the TARP money that has not or will not be repaid.”
Dr. Morici believes it amounts to a public relations gimmick to confuse voters in two ways:
“First, the banks the president would tax are repaying their TARP money with interest to the Treasury,” he explained. “Though not all of the TARP money given to the banks has yet to come back, the government will get it all back with a significant profit because the government was paid such generous interest under the terms of the TARP.
“Second, the president misused the TARP money by investing in GM and Chrysler, and GMAC, and that is where the government will lose money,” he added.
Noted authority
If you do an online search of his name, you’ll see Dr. Morici is a widely quoted business professor at the University of Maryland and former chief economist at the U.S. International Trade Commission in the Clinton Administration.
“If President Obama were to tax anything to recoup lost TARP funds, it should be cars,” he said. “However, that would anger the UAW, staunch supporters of the president and Democrats running for Congress.”
What I enjoy about this economist is that he understands the numbers, explains the impact of events and does it candidly.
“The bank tax is in response to public outrage over the $150 billion in bonuses paid in 2010 on 2009 bank earnings,” Dr. Morici contended. “The tax would only raise $9 billion in 2010 – a pittance compared to the bonuses.”
He points out the Wall Street bonuses were supposedly earned when the firms were bailed out by loans with interest rates at “near-zero.”
“The bankers are screaming about a death wound when the tax is merely a paper cut,” he said.
“The tax is a bad idea,” the economist maintained. “It won’t fix the banks, who continue trading complex derivatives, energy futures and repackaging old mortgage-backed securities instead of making new loans to worthy homeowners and businesses.”
Disingenuous developments
Here’s the first of two more disturbing and disingenuous developments:
“The president’s tax would let the bankers, who contribute mightily to campaigns of congressional Democrats and President Obama, keep their bonuses after they nearly wrecked the global economy with irresponsible risk taking on the public’s tab,” said Dr. Morici. “This is horrible public policy and demagoguery.”
Secondly:
“The proposed bank tax is meaninglessly small, serves no purpose toward reforming the banks, and is merely an attempt by the president to appear on the side of the auto industry and against the banks, when he is really on the side of union organizers and the bankers,” he wrote. “As with the union exemption from the Cadillac tax in the proposed health care reform compromise, the president is putting his political debts ahead of public purpose.”
Dr. Morici indicated the president would be well-advised to push for a 50 percent tax on bonuses exceeding a quarter of a million dollars, as is the case with British Prime Minister Gordon Brown.
“Instead, the president lets the bankers keep their money, and sends Democrats calling for contributions,” he concluded. “It’s all very insidious.”
From the Coach’s Corner, for more of his insights: Peter Morici’s Curriculum Vitae.
30 Time Management, Stress Reducing Skills
Updated May 10, 2010
OK, so you didn’t get a bailout, but Goldman Sachs faces a fraud investigation and paid $20 billion in bonuses just one year after taxpayers rescued the firm with a massive cash transfusion. If you’re a Main Street businessperson, the firm’s behavior is likely to contribute to your stress factors.
Moreover, published reports indicate the firm now disingenuously tries to justify its bonus program by claiming it didn’t need the taxpayer bailout. You might recall it was engineered by former Treasury Secretary Henry Paulson, a Goldman Sachs alum. Where is their moral compass you wonder?
And you might not be convinced the U.S. is embarking on an economic recovery. Many economists are calling it a jobless recovery, but with respect for their opinions, the phrase is actually an oxymoron.
The economy will continue to be difficult with many economic stress factors.
They include:
- Tight credit
- Layoffs
- Rapacious behavior by many credit card companies
- Natural disasters
- Home foreclosures
- Bankruptcies
- Health care costs
- Declining profit
- College tuition
And such factors make businesses reluctant to take bold measures to invest in their future with needed equipment, marketing and training their workers. It’s time for performance solutions.
Start by reducing stress and saving time. Why?
Executives and workers, alike, feel powerless over most of stress factors. Indeed, the 2007 American Psychological Association study, “Stress in America,” had some startling conclusions (www.apa.org). The study is relevant years later.
For example, 74 percent cited work stress, 73 percent had money worries and 66 percent complained about their workloads.
Pressure turns into stress for many.
Trauma in your personal life can affect your business and career. Short of psychotherapy or meditation, time-management skills are a solution.
Here are 30 ways to reduce stress:
- Identify your stress factors and take steps to eliminate them. Whether it is nasty surprise letter from the IRS, credit-card company predatory behavior, or a complaint from your best customer, do what you can to solve the problem quickly so you can move forward. Paraphrasing a philosophy of former President Gerald Ford, clear the table and move forward.
- Know your capabilities and limitations. Don’t take on too much.
- Find a trustworthy person with whom you can vent and give you empathetic feedback when asked.
- Understand when you need to say “no.”
- Get refreshed by taking regular breaks, vacations, recreation and exercise. And when you can, a simple walk will work wonders.
- Set time limits and goals for meetings.
- Review your long range goals. Frequently during your work day, ask yourself: “Is this helping me to reach my goals?”
- Record and analyze how you spend your time.
- Make sure the first hour of every day is the most productive. Tackle the hardest task first. The rest of the day will seem like a walk in the park.
- Practice excellence in every responsibility. Do the very best you can and you will prevent regrets.
- Do everything gently. As famed entertainer Hoagy Carmichael once said, “Slower motion gets you there faster.”
- Remember: If you don’t take the time to do it right, when will you have time to do it over?
- Instead of “post-it notes”, put all the necessary folders away in the appropriate file drawers. Once the clutter is off your desk, the “to do” list serves as the master organizer.
- Look for progress – not perfection.
- Plan your time. Make your “to do” list by Friday for the following week. If you’re in sales, have your list ready by Thursday.
- Review the next day’s schedule before going home each night.
- Prioritize your work: A, B, or C. Your A duties get done first – immediately.
- Learn how to structure your e-mail system for maximum efficiency.
- Eat the right foods for sustained energy.
- Get enough sleep. If you feel tired by mid-day, ask your doctor for a sleep study. Insomnia and sleep apnea routinely lead to high blood pressure and even strokes.
- Make your work fun.
- Learn from baseball player Ichiro and do stretching exercises.
- Listen to the right music. For many successful people that means classical music.
- Look around to help someone who is less fortunate. Volunteerism is gratifying.
- Learn breathing techniques.
- If you commute to work, consider mass transit and take a good book to read.
- Review inspiring thoughts, such as “No matter what, there are no big deals.” Taking the emotional sting out of your reactions to events will help. Learn to respond, not react.
- Develop positive affirmations about yourself, keep your notes handy, frequently review them and rehearse them in front of the mirror.
- Remember, the remedy for depression is action.
- Become more active socially. Yes, that’s a time management skill. If you are not alone, you are not lonely. Loneliness contributes to stress.
Get busy and you’ll soon feel ready to take on the world and head toward to profits. Start investing in your future with needed equipment, marketing and training of workers. And talk with your public officials about policies that will improve the nation’s economic health and create jobs.
From the Coach’s Corner, for related career tips, here is another Biz Column: