In some ways, the worst phenomena in political and public life is the way in which we--the people--give over power to the financial and corporate elite partly because we internalize marketing phrases and economic nonsense beaten into our brains over 30 years by the brain-dead traditional media and a capitulation by the political leaders of both parties. Take just as a small sampling the foolish obsession over a non-existent debt and deficit "crisis", or the much longer-term "taxes are bad for business".
And we have enormous power--if we just use it. Which brings me to a most recent threat by Wall Street.
I've written a lot about the Financial Transactions Tax (here is one basic piece from a year ago): a tiny tax on financial market transactions that would raise hundreds of billions of dollars, encourage big traders to "buy and hold" financial instruments rather than engage in the crazy casino-like environment that fuels a speculative bubble—-which hurts all the regular people when the bubble bursts, which it always does--but not be felt at all by the small investor.
Of course, Wall Street has gone bonkers, opposing the FTT because...well, it's simply about greed. But, the phony argument being used by the political leaders who are helping Wall Street block the idea--and this IS a phony argument--is that oh, my god, financial markets business will pick up and move away.
That this argument was just phony seemed obvious to me but I realize how the obvious is irrelevant in the face of sustained rhetoric--to reiterate, you just have to ponder how we are totally obsessed by a phony debt and deficit "crisis", or how so many people who should no better nod their heads when some talking head or craven politician--say, the poddle-for-the-rich governor of New York--regurgitates the idea that businesses are fleeing because of "burdensome" taxes.
Into this picture peaks a Financial Times article today on the debate in Europe over a financial transactions tax:
However, if France and Germany do press ahead without Britain, the initial European Commission proposal for a tax across all 27 EU-member states is likely to be amended to stop eurozone traders and banks from moving business to London and other potential transaction tax havens.
The tax would still use the “residence principle” underlying the Commission proposal, which taxes any trade authorised by a group that is located in the tax area, even if the actual transaction were executed in London, New York or Hong Kong.
Eurozone officials are seeking to make this design more watertight by requiring any financial product issued by a government or company in the transaction tax area also be subject to the levy, regardless of where the parties executing the trade are based.[emphasis added]
So, consider this: the United States government annually puts out to market roughly $3-$4 trillion in securities. Let me emphasize: TRILLIONS. These sales are probably the most secure sales one could do in the entire world. Those sales are handled by private brokers.
Simple: the U.S. government--the people we elect to run the country--can simply say--every bond we market will include a financial transaction tax.
And you are free not to take this business.
Now, some of the Wall Street fanatics might be foolish enough to turn down the easiest money you can make. Fine, go away. We have plenty of people who will take this business.
Most will not.
This is such a no-brainer you wonder what the problem is...
And, yes, you'd be right: we have a political system that is awash in corrupt campaign contributions that buy policy--foolish and damaging economic policy for most people but very advantageous policy for a very small elite.
It doesn't have to be that way--and the Occupy Wall Street movement has shown how, with a little pressure, the agenda can get shifted.
So, just remember: when you hear the warning that "business will flee" if we impose a financial transactions tax, it's just hype and nonsense. And we have the power to hold Wall Street hostage on behalf of the people.