Bank tax demagoguery

Washington Times Editorial:

President Obama has decided to take on the banking industry with the most intrusive regulatory and tax package since the New Deal of the 1930s. If the president's failed freshman year didn't convince the O Force of his own fallibility, confronting Wall Street should bring him back down to Earth.

Mr. Obama wants to tax banks to make them pay for the bailouts. The scheme apparently was hatched to distract Massachusetts voters from thinking about his party's health care fiasco and to give Democrats a populist wedge to use against Republicans. The ploy failed, largely because Americans are wary of increased government intervention into the economy as the recession deepens following last year's blitzkrieg of federal action. It's transparent that the Obama administration is targeting Wall Street because it needs a new scapegoat. Now that the president is entering his sophomore year in the White House, he can no longer get away with blaming his predecessor, George W. Bush, for all the nation's ills.

Banks are not the bad actors Democrats want people to believe. Banks have paid back almost all the money they were lent along with interest. The same cannot be said for government-run Fannie Mae and Freddie Mac, which have irretrievably lost $400 billion and counting - and the Obama administration is offering those losers a blank check for billions more. The same laxity applies to Government Motors and Chrysler, which aren't close to paying off the nearly $100 billion handout they received courtesy of taxpayers. Outside the political motives to demonize bankers, there's no reasonable public policy justification for why banks should be singled out for a new extra tax.

The truth is most of the blame for the financial meltdown belongs to government....

Even Obama booster Warren Buffett is unable to defend the administration's proposal. "I don't see any reason why they should be paying a special tax," the billionaire said of the banks. "Look at the damage Fannie and Freddie caused, and they were run by the Congress. Should they have a special tax on congressmen because they let this thing happen to Freddie and Fannie? I don't think so."

...

We could call it the Barney Frank, Chris Dodd tax. Their screw up on Fannie and Freddy along with other Democrat policies on home lending caused the problem for the banks and the rest of us. They should be held accountable.

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