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As 2012 kicks into gear questions remain about Obama's relationship to Wall Street going forward. For many it's rather clear - he takes their money and does their bidding. For others there is a lingering though diminishing hope that Obama is patiently waiting for his opportunity, taking the money that he needs but waiting for his moment to strike - hope springs eternal or hopium is addictive.

For the second group, those who will voyage to any territory in their minds to see Obama as progressive reformer - the Obamanauts - there is some justification to boot up, from HuffPo:

Advocates of a tiny but lucrative tax on financial transactions are increasingly hopeful that President Barack Obama's need to more firmly establish himself as the Main Street candidate in 2012 will lead him to back the measure.

A Financial Transaction Tax is tax on financial transactions like the sale of securities. The financial firms are only taxed when they perform the transactions. The tax itself is often used as a tool, not to collect revenue, but to discourage reckless speculation - like the kind that caused the 2008 crisis. Collecting revenue would be a bonus.

What may be even more interesting is the United States has already had a financial transaction tax, from Wikipedia:

The US imposed a financial transaction tax from 1914 to 1966. The federal tax on stock sales of 0.1 per cent at issuance and 0.04 per cent on transfers. Currently, the US has a very minor 0.0034 per cent tax which is levied on stock transactions. The tax, known as Section 31 fee, is used to support the operation costs of the Securities and Exchange Commission (SEC). In 1998, the federal government collected $1.8 billion in revenue from these fees, almost five times the annual operating costs of the SEC.

The bill for the tax has already been introduced and scored, from HuffPo again:

Sen. Tom Harkin (D-Iowa) and Rep. Peter DeFazio (D-Ore.) introduced legislation last month that would impose a 0.03 percent fee on financial transactions, an amount so small that its sting would only be felt by speculators who rapidly move vast sums in and out of trading positions.

But because of the enormous volume of transactions, the new tax would still raise $350 billion in next 10 years, according to nonpartisan congressional scorekeepers.


(h/t Horace and WallstSalesTax.org)

The hardest hit would be those engaging in High-Frequency Trading (HFT) and if there is an example anywhere that Wall Street creates no value it is HFT - computers trading at lightning speed to make miniscule profits. The argument for HFT is that is creates "liquidity" but that's total bullshit as has been continually demonstrated that the second you need liquidity in the market is the same second it isn't there now you see it, now you don't.

HFT also crashed the markets in what has become known as the Flash Crash

Needless to say, no tears if HFT gets more restrained.

The tax seems to be gaining some traction in D.C, from HuffPo again:

The bill is "generating some interest in the White House, and I'm hopeful that the president will pick up on this," said Harkin, a fifth-term senator.

"I think there's interest in the White House at looking at sources of revenue, and I think this is one that's got their interest," Harkin said. "They haven't said yes, they haven't said no."

Mike Lux, a progressive strategist, said he thinks that despite some internal opposition within the administration -- most notably from Treasury Secretary Timothy Geithner -- the tax may be an idea whose time has come.

"I know that Geithner remains adamantly opposed to it, but I also get the sense that the political folks in the White House understand that Geithner's positioning isn't always the right thing for the president to do politically," Lux said. "There is sort of a growing awareness of that."

A White House spokesperson, asked to explain the administration's current position, referred The Huffington Post to a Treasury spokesperson, who declined to comment.

Perhaps the most ironic twist in all this is mutli-millionaire hedge fund consultant and fmr. Obama economic advisor Lawrence "Women Can't Do Math" Summers endorsed the idea in his younger years:

In a 1989 paper, a younger Larry Summers wrote: "Such a tax would have the beneficial effects of curbing instability introduced by speculation, reducing the diversion of resources into the financial sector of the economy, and lengthening the horizons of corporate managers."

To recap, this is a tax that:

1. Would fall squarely on Wall Street/FIRE Economy

2. Would raise needed revenue ($350 billion in next 10 years)

3. Would help curb dangerous speculation like HFT

4. Would "lengthen the horizons of corporate managers" by creating more stability

5. Would be extremely popular.

So the question remains... is Obama ready to Occupy Wall Street?

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Comment Preferences

  •  Disclaimer I'm on the commitee that produced this (5+ / 0-)

    Feel free to share.

    Education is a progressive discovery of our own ignorance.

    by Horace Boothroyd III on Sat Dec 17, 2011 at 11:22:59 AM PST

    •  Added video in. Great stuff n/t (1+ / 0-)
      Recommended by:
      Horace Boothroyd III
    •  Here's the problem with the way both sides of this (4+ / 0-)

      issue deal with it... On the Right, the intent is to destroy democracy, and as a mean to get there they use lies, propaganda, and the imposition of raw power.

      On the Left, we are responding to what the Right does, mainly by pointing out that the information they are putting forward is a lie; so we want to set the record straight.

      That's a good step, but it's highly inefficient since there are other aspects in the struggle that are much more important, but in which we don't engage.

      When you are dealing with an unreasonable opponent, reason ceases to be of much importance.

      Then you're talking about a bare-knuckles power struggle, and it comes down to which of the two sides has the guts to impose their world view on the other, by any means necessary.

      The Left is not good at the raw power struggle fueled by a visceral hate and disdain of the opponent.

      With that component of the power struggle missing from the Left, we will remain at a huge disadvantage.

      •  I agree. But isn't this legislation proactive? (3+ / 0-)

        This not only shifts the debate it crystallizes it.

        Wall St should be the ones to pay more not the middle class.

        •  Don't get me wrong, of course this is very (2+ / 0-)

          important legislation, but there are a lot of things that are important, and fair, and make sense, and 99% of them (pun intended) are being proposed by the Left.

          But that's not the issue at this juncture... The issue is that the Left has not decided to engage in a bare-knuckles, visceral struggle against an opponent that does not respond to reason.

          Yes, propose this legislation, and others, but that's about 20% of the equation (for success), in my opinion.  The other 80% involves a raw, visceral, hate-filled power struggle.

          The Left does not have the stomach for that, and until it does, we'll be at the losing end for he foreseeable future.

        •  Timing of a transaction tax (0+ / 0-)

          The only valid argument against a transaction tax is that it would redirect trading from the US to other international money centers who do not have a transaction tax. Trading is a big part of the economy of NYC and is important in some other US markets as well. This is not a tax where the US should lead the pack, but rather implement a transaction fee along with the other major money center countries. The EU has proposed a transaction fee, and a plan where the US, UK, and EU would all simultaneously implement the same fee thereby not changing any trading patterns. The US should enthusiastically endorse the EU's plan.  

          This is not a tax on Wall Street, except when the investment firms are trading for their own account as a principal. A transaction tax is a flow through fee paid by the owners of the securities, not the broker who executes the trade.

          "let's talk about that"

          by VClib on Sun Dec 18, 2011 at 09:49:01 AM PST

          [ Parent ]

  •  I'm sick of this bullshit pre-occupation with (1+ / 0-)
    Recommended by:
    Sue B

    what Obama will or won't do.

    I'm convinced that OWS is a movement run by people who are so disillusioned with Obama, that they can't or won't recognize that fact that Republicans are the real menace in this country.  

    Why the Hell aren't you asking how to get Republicans to stop screwing people?

    •  Because it won't work, and we all know it (2+ / 0-)
      Recommended by:
      DSWright, marty marty

      I agree with you about people being preoccupied(heh) with Obama as being some sort of key aspect to passing these sorts of things.  I'd like to see him endorse this, but the idea that him not coming out in favor of it is what is stopping it is absurd.  That said, if he doesn't come out in favor of it it can't happen.  

      And why do you think there is any chance in hell that republicans would ever, ever, ever pass this?  Are you living in a different world than I am?  It seems like pushing the ConservaDems on these issues would be a lot more useful, at least there's a chance that they would support it.

      There revolution will not be televised. But it will be blogged, a lot. Probably more so than is necessary.

      by AoT on Sat Dec 17, 2011 at 11:41:29 AM PST

      [ Parent ]

      •  Well ... (0+ / 0-)
        And why do you think there is any chance in hell that republicans would ever, ever, ever pass this?  Are you living in a different world than I am?  It seems like pushing the ConservaDems on these issues would be a lot more useful, at least there's a chance that they would support it.

        If there's some chance that Obama will back it, and no chance that Republicans will, then Republicans are the real obstruction.  Any movement worthy of its name would be trying to figure out how to move the obstruction, rather than obsessing over who Obama is or isn't.  

        I mean, if (royal) you can't fathom that Obama is more complicated than the fucking poster, then you shouldn't call yourself an activist.

        •  Republicans aren't the only obsrtuction (5+ / 0-)
          Recommended by:
          DSWright, pot, NeuronFlash, bnasley, rcnewton

          and we all know it.  What you write here is going to end up being an argument that we need to work on electing more Dems, because if we know the GOP won't do it then what other option is there?  But that isn't an acceptable argument anymore given the Dem opposition to these things.  Yes, it will be easier to pass progressive legislation with a (larger) majority of dems, but that ignores the fact that virtually no one is talking about systemic change, not republicans or Dems.

          There revolution will not be televised. But it will be blogged, a lot. Probably more so than is necessary.

          by AoT on Sat Dec 17, 2011 at 11:53:52 AM PST

          [ Parent ]

          •  I didn't say they were the only obstruction. (3+ / 0-)
            Recommended by:
            AoT, Sue B, doroma

            I said they were the real obstruction.  But true to form, the OWS obsession with Obama must declare that Republicans aren't the only bad people in order to justify calling Obama a bad person.

            Look, I think the diary is interesting.  I just hate the title.  If you want for people to punish Wall St., stop framing the argument in terms of whether or not Obama will behave.  It's really fucked up.

            •  I fully agree about the title (0+ / 0-)

              and the focus on Obama in regards to these things.

              There revolution will not be televised. But it will be blogged, a lot. Probably more so than is necessary.

              by AoT on Sat Dec 17, 2011 at 12:12:14 PM PST

              [ Parent ]

            •  here's the deal (2+ / 0-)
              Recommended by:
              metamars, DSWright

              I'll get off your back about Obama squandering the last quarter of the ball game playing defense and shooting hoops in the opposing team's goal when we're 50 points behind

              and you get off my back about putting my coat on and walking down the bleacher steps towards the parking lot.

              And guess what.

              Your strategy of alienating progressives diminishes the effective size of the Democratic party in the next election.

              You want me and ten million other disenchanted voters to vote. You have about 11 months  to get your act together and give us a reason to vote.

    •  Also, a lot of the talk about Obama (3+ / 0-)
      Recommended by:
      Roger Fox, ballerina X, bnasley

      is not coming from the movement, it is coming from supporters online, and especially here.  I have hardly heard any talk about Obama when I'm actually down at the occupations, except as another cog in a corrupt system.  That's one reason the focus on the President frustrates me, it takes focus away form the systemic problems that OWS wants to confront.

      There revolution will not be televised. But it will be blogged, a lot. Probably more so than is necessary.

      by AoT on Sat Dec 17, 2011 at 11:46:51 AM PST

      [ Parent ]

      •  Fair point but this is a legislative issue and Har (0+ / 0-)

        kin is openly saying in his public remarks he doesn't know where the President is on his bill.

        So it's quite relevant by my estimation.

      •  Well, I don't identify with OWS (0+ / 0-)

        or any other ideological movement, so I don't really care about this "distinction" between online "poseurs" and the "real" activists in the street.  To me that distinction is just as superfluous as the pre-occupation with Obama.

        •  Obama is the President... so he is a part of any (2+ / 0-)
          Recommended by:
          pot, bnasley

          reform efforts. He can promote the bill and ultimately sign it or correspondingly veto it.

          He's relevant and noteworthy in the legislative process and his support or lack there of can effect outcomes.

          •  Well duh. (1+ / 0-)
            Recommended by:
            doroma

            Of course he's the President.  Of course he's a part of it.  But you damned well know that the real obstruction will come from the Republicans.

            Instead of wailing every time Obama "caves" and then shrugging when Republicans give us the finger because you take their obstruction for granted, why don't you put your money where your mouth is.  If you insist that Obama should move mountains, then OWS should try to do the same and figure out how to win back the House and Senate.

            The only focus should be on those Republican bastards and their repeated and cynical attempts to disenfranchise voters and piss on this country every chance they get.  We are not well served by this false equivalence between Obama and the Republicans.

        •  It isn't a distinction between "poseurs" and "real (1+ / 0-)
          Recommended by:
          DSWright

          activists.  It's a matter of the media saying things about the movement and the occupations and people assuming those are true and basing what they write on them.

          There revolution will not be televised. But it will be blogged, a lot. Probably more so than is necessary.

          by AoT on Sat Dec 17, 2011 at 03:59:16 PM PST

          [ Parent ]

    •  But Obama is the leader of the country. Too bad (0+ / 0-)

      he doesn't act like it - or maybe he is The Third Way and this is the way the Third Way Acts.  DLC Corporate Blue Dog on Steroids!

    •  democrat or doormat crap (1+ / 0-)
      Recommended by:
      DSWright

      If you want the Hell to get Republicans to stop screwing people, stop enabling them and start listening to your progressive base.

      A sure way to suppress turnout for the democrats is to alienate and demoralize your progressive voter base.

  •  Best argument I've seen for the transaction tax (3+ / 0-)

    SO far.

    Including the history of the tax is what sells me. Well Done. TnR

    FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

    by Roger Fox on Sat Dec 17, 2011 at 11:56:04 AM PST

  •  The facts are somewhat incriminating.. (2+ / 0-)
    Recommended by:
    pot, bnasley

  •  He's occupied by Wall Street. (7+ / 0-)

    Ordinary political process is dead. The Supreme Court killed it. In Chambers. With a gavel.

    by Publius2008 on Sat Dec 17, 2011 at 12:41:28 PM PST

  •  Not (1+ / 0-)
    Recommended by:
    bnasley

    a

    chance

    in

    hell.

    I didn't abandon the fight, I abandoned the Party that abandoned the fight...

    by Jazzenterprises on Sat Dec 17, 2011 at 01:27:05 PM PST

  •  If Obama wants to do something (2+ / 0-)
    Recommended by:
    bnasley, marty marty

    he can have his DOJ go after the banksters for the crimes they've already committed.  

    Coming out for this kind of a tax is political grandstanding.  It has ZERO chance of getting through Congress, but Obama can say he's for a tax - BFD.  More talk and no action.    

    Bill Black wrote a great article on Naked Capitalism about Obama's view of the crimes of Wall Street, and what could be done, but hasn't been done by this President.

    http://www.nakedcapitalism.com/...

    The darkness drops again but now I know That twenty centuries of stony sleep Were vexed to nightmare by a rocking cradle, And what rough beast, its hour come round at last, Slouches towards Bethlehem to be born? William Butler Yeats

    by deepsouthdoug on Sat Dec 17, 2011 at 01:52:27 PM PST

  •  Lots of HFT are 99%'ers. (0+ / 0-)

    I used to know lots of "day traders" that would sit at their computers all day, or be constantly on their cell phones, making transactions.  These guys weren't rich, by any means.  (Lots of them were fools, really, making trades based on "gut" and "whim" and losing money, but it was like a hobby for them.)

    I support this tax, but you should know that it'll hit lots of 99%ers.

  •  Democrats who are in the back pocket of special (3+ / 0-)
    Recommended by:
    bnasley, marty marty, metamars

    interests employ a passive aggressive support as opposed to the more direct approach that the GOP politicians use.

    Obama employs passive-aggressive actions when dealing with Wall Street. He ignores things like the Financial Transaction Tax until the GOP can kill it in the House.

    Then, after it's dead, he will speak out for it.

    Forget that Obama is labeled a democrat and follow the money.

    He can't be begging Wall Street for cash and then turn around and aggressively reform Wall Street.

    That is just not going to happen.

  •  Obama'll do whatever Geithner 'suggests' (1+ / 0-)
    Recommended by:
    marty marty
  •  You could have left out the emoprog dribble, but (0+ / 0-)

    good arguments for a transaction tax.

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