Some EU nations are instituting a financial transactions tax which banksters in the US have so far managed to block here, thanks to a handy coincidence of conservative ideology with ownership of a bunch of Congress.
Seems fair. The people we deride as "banksters" --- well, I certainly don't shy from that term --- caused the financial crisis through unreasonably risky if not fraudulent activity, so let them finally start paying for the bailouts that saved them. The more troubled Eurozone economies have already tried jacking up the numbers of unemployed people and impoverishing their pensioners to cope with deficits and debts, and shockingly, creating poverty has failed to create prosperity, except at the top. It took only four years of consistent failure to cause a rethink of austerity.
A group of 11 European Union countries was given the go-ahead Tuesday to work on the introduction of a tax on financial transactions."Major milestone" is right. The current UK government won't consider it even while slashing housing and education, and it was never seriously considered in the US while Dodd-Frank was being worked on in Congress. The banksters just don't want it, just as they wanted no re-regulation of derivatives.
The tax is designed to help pay for the rescue of Europe’s banks and discourage risky trading. It would apply to anyone in the 11 countries who makes a bond or share trade or bets on the market using complex financial products called derivatives.
EU Tax Commissioner Algirdas Semeta told reporters after a meeting of the bloc’s 27 finance ministers that the decision marked a “major milestone for EU tax policies.”
If you're wondering what "derivatives" means, it's an investment derived from another investment rather than directly buying something. For example, the reason mortgage brokers were so desperate for new mortgages that they eventually resorted "liar loans" to people who couldn't make a single payment is that mortgages were being repackaged into collateralized debt obligations (CDO). These consisted of thousands of mortgages, and investors buying a CDO owned a tiny slice of each mortgage. Investors were told these were very safe because real estate never goes down, few mortgages get defaulted on, and the ratings agencies declared them safe. They weren't safe. They were full of junk, unregulated, and the banksters sometimes shorted the CDOs they sold because they knew they were junk. That's where the demand came from to create the real estate bubble.
So huge financial corporations owed on derivatives they couldn't pay off, or held assets that proved worthless, and whichever side of that you were on, that's what caused the financial system to need a bailout or just collapse. Taxing transactions would add a tiny bit of cost to the people taking the risk, and provide funds to the governments that will get stuck bailing them out before they take down the whole economy. If nothing bad happens, great, because then the governments will get revenue coming from the top of the economy, which might work better than having tax collectors digging through poor people's sofa cushions for change.
Will our conservatives be any more open to a transaction tax than Europe's conservatives? Of course not. Probably wont' get through either house of Congress. But can we at least have the discussion so the idea is understood when conditions are finally right to pass it, preferably before the next financial collapse? How about if we call it the "bankster tax"?