Remember this ad for Infiniti Q45?
The commercial doesn’t really give you much information. We just know it’s a commercial for a
florist car company. The ad campaign was pretty widely knocked as “zen marketing” – it’s supposed to make you feel good about the car. You just don’t know any facts. It could be a great car – or it could suck.
This is kind of how I feel about President Obama’s new budget. So far, it’s all a big tease. The administration is releasing bits and pieces but nothing of substance yet. It’s all a build up to the official 2011 budget proposal. Can’t you just *feel* the excitement?
What’s even more remarkable about the build up is that there’s already opposition to… um… something?
As it turns out, the Securities Industry & Financial Markets Association (SIFMA), the main lobbyist for Wall Street, has hired a top litigator, Carter G. Phillips of Sidley Austin, to investigate whether the proposed bank tax in the budget is constitutional. That’s what we know. Here’s what we don’t: what the tax is or how it will be implemented. Doesn’t that feel a little backwards to you?
The infamous bank tax, which I blogged about previously, now has a name: the “Financial Crisis Responsibility Fee.” It has a target: 50 of Wall Street’s biggest firms with assets of $50 billion or more. And it has a goal: reducing around $120 billion in expected taxpayer losses from TARP.
But other than that? Nothing. Which is why mounting an opposition just feels silly.
Even the lobbyists can’t quite articulate what they’re opposing. Andrew DeSouza, spokesman for SIFMA, said about the tax, “There is not even legislative language and thus it is premature to speculate on any potential actions beyond opposing the proposal itself as both punitive and counterproductive to increasing lending to support the economic recovery.”
The whole thing reminds me of fixing dinner for the kids while they scream that they hate zucchini. I know they hate zucchini but if you add a little cheese and sausage, you can sneak it in – isn’t that what politicians do best? Sneak the zucchini into our suppers? Can’t we wait and see what we’re having for dinner first before we order out?
But even though the bankers don’t know what the tax is all about, they’re already threatening to pass it along to consumers. JPMorgan Chase, in particular, is planning to stick it to its customers, with its CEO Jamie Dimon warning, “All businesses tend to pass their costs onto their customers,” he said, adding, “[t]hat’s not abnormal.” And yes, we expected the banks to push it through to consumers but you’d think that Chase would at least pretend to wait and see what it’s all about first. But then, this is the same bank that gobbled up $25 billion in TARP funds and proceeded to make plans to buy two new luxury corporate jets and build “the premier corporate aircraft hangar on the eastern seaboard” to house them. I wouldn’t expect much different.
Don’t misunderstand me: I’m not saying the tax makes sense, that it’s constitutional or that it’s practical. I’m just saying that maybe we should wait for Obama to throw back the tarp (pardon the pun) and reveal the specifics of the tax before we start hiring lawyers. But then, unlike Dimon, I didn’t get paid $19 million in 2008 as my company clung to life at taxpayer expense. So what do I know?
- Big Banks Switch Course on Debit Card Fees
- Is the White House Banking on a Financial Industry Tax?
- Legislation Introduced to Tax Bonuses at 90%
- Support Growing for Bank Tax
- Is a Robin Hood Tax the Answer?