Will The Banksters Be Brought To Heel?

Yesterday we mentioned how America's Wall Street aristocracy is doing its Marie Antoinette impersonation in the face of rising unemployment, increased foreclosures and a stagnant economy-- all conditions they were instrumental in bringing about. Tomorrow this decade's version of the Pecora Commission will begin taking testimony from the banksters. In Pecora's day-- a day before the likes of Rahm Emanuel, Timothy Geithner and Lawrence Summers at the apex of the Democratic Party-- they know how to interact with banksters without ingratiating and groveling. I have low expectations. So does everyone else.

Last night the NY Times reported that Obama is looking into levying a special bankster tax to help reduce the federal deficit. Republicans, Blue Dogs and Chuck Schumer might not like it-- and its hard to believe the Three Horsemen of the Wall Street Apocalypse, Emanuel, Geithner and Summers will get behind it-- but it would probably wind up being the most universally popular thing he could do.

The bank fee would recover some of the money that taxpayers put up to bail out the financial system after its near collapse in the fall of 2008, a rescue effort that has contributed to the largest annual budget deficits since World War II.

...With popular anger building as big banks show profits and pay sizable bonuses while unemployment remains high, the Obama administration has come under pressure at home and abroad to support a financial transactions tax on institutions and to heavily tax their executive compensation.
But the United States, led by the Treasury Secretary Timothy F. Geithner, has been opposed, arguing that a transactions tax would simply be passed on to customers and a bonus tax could be easily circumvented.

The 27-nation European Union called for a global transactions tax in December and Prime Minister Gordon Brown of Britain had proposed the idea in November at a meeting of the Group of 20 developed and emerging nations, saying revenue could be stockpiled to finance any future bailouts. Separately, Britain and France have proposed a large tax on financial executives’ bonuses.

Emanuel's perspective is that Obama will need all the Wall Street criminals to continue donating to his re-election efforts if he's going to beat back the Republicans in 2012, so you can count on him trying to broker a deal the way he did with Big Pharma. Emanuel is one of them and it's unlikely he's smart enough to take into account just how loathed the banksters are among the "little people" he never interacts with. I hope I'm wrong but I have no faith in any commission created by an overly compromised Congress, a commission that is bipartisan, which only means Republicans and corporate Democrats will make sure the banksters are protected. We'll soon see if Phil Angelides has the strength to make something out of this mess. If he does, he'll be a national hero, but after hearing him and that clown Bill Thomas on NPR the other day, my expectations dropped to almost zero. I'd put a lot more faith into New York Attorney General Andrew Cuomo to effectively fight back against the banks, even if his motives are self-serving. I wish Eliot Spitzer was in action though.



UPDATE: Do You Ever Get Advice From Your Broker?

If you do, be careful. According to a client e-mail from a senior exec at Goldman Sachs, released by the NY Times this morning, that advice is more likely to benefit the company and satisfy their priorities than to benefit the clients. Goldman Sachs is refusing to explain the e-mail, which warns the client not to consider the advice as objective or even based on independent research.

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