In this week’s address, President Barack Obama proposed a fee on major financial firms to recoup – on behalf of American taxpayers – the $700 billion paid out in TARP, saying, “we want the taxpayers’ money back, and we’re going to collect every dime.”
The latest populist appeal follows well-known political tactics used by both Republican and Democratic politicians to shift the focus from their lack of action on resolving issues. And one of the real issues that is at the core of the Troubled Asset Relief program – TARP– is that almost three-quarters of trillion dollars of borrowed taxpayer money was spent with little if any positive effect on job creation.
During the past two years, more than seven million residents of the U.S. have lost their jobs. Moreover, our manufacturing sector – a great creator of jobs and wealth – is in tatters from the lack of industrial policies that all other industrial nations have long had.
U.S. taxpayers are outraged, to put it mildly, over the billions in Wall Street welfare payments they involuntarily made, which are now being recycled to financial executives in multi-million dollar bonuses. A clear majority are also against the auto bailouts. The banking bonus bumble is made more outrageous with U.S. unemployment growing to levels unseen since the Great Depression.
The fact that GM in a Security and Exchange Commission filing yesterday revealed that it is paying one Wall Street consultant on its Board, Stephen Girsky, almost $1 million a year is going to raise questions and increase the anger of opponents of taxpayer bailouts.
In a deft political move that has policy implications, President Obama is now proposing a Financial Crisis Responsibility Fee that would require the largest and most highly leveraged Wall Street firms to pay back taxpayers for the federal assistance provided, so that the TARP program does not add to the deficit. Whether the auto companies are mired in this populist controversy remains to be seen. Moreover, the bankers and Republican party are not going to embrace this bill.