The catfood commission chairs' released yesterday was notable for the amount of spending cuts versus revenue increases it called for, about a 70-30 discrepancy. Dean Baker notes a glaring ommission on the revenue side: Wall Street.
The deficit report put out by the commission's co-chairs, Alan Simpson and Erskine Bowles, had one striking omission. It does not includes plans for a Wall Street speculation tax or any other tax on the financial industry.
This omission is striking because the co-chairs made a big point of saying that they looked everywhere to save money and/or raise revenue. As Senator Simpson said: "We have harpooned every whale in the ocean - and some minnows." Wall Street is one whale that appears to have dodged the harpoon.
There's more:
In this context, it is worth noting that one of the co-chairs, Erskine Bowles, is literally on Wall Street's payroll. He earned $335,000 last year for his role as a member of Morgan Stanley's (one of the bailed out banks) board of directors. Morgan Stanley would likely see a large hit to its profits from a financial speculation tax.
Baker notes that Andy Stern, a member of the catfood commission, has been an advocate of the financial speculation tax, as have plenty of progressive economists and leaders who looked at the speculative trading that was behind the economic crash. A financial transactions tax would not only raise as much as $100 billion a year, it could curb the kind of mass speculation that contributed to the crash.
So Wall Street is the one major whale that Alan Simpson and Erskine Bowles not only failed to harpoon, but seem to want to pretend doesn't exist. The appearance of a conflict of interest for Bowles in this is just one more massive credibility problem for the commission.