Fatties are no longer jolly and fun. They're killing themselves and our society. Am I talking about your saddlebags and mine? Yes, but not exclusively.
We've been getting some painful lessons about what our fat costs in terms of health and longevity even as we're learning about fatty matter clinging to the heart of our financial sector, nearly killing our economy.
Now we're talking about a fat tax Dr. Krugman thinks we should levy on Wall Street.
An intriguing proposal is about to be unveiled from, of all places, the International Monetary Fund. In a leaked paper prepared for a meeting this weekend, the fund calls for a Financial Activity Tax — yes, FAT — levied on financial-industry profits and remuneration.
Such a tax, the fund argues, could “mitigate excessive risk-taking.” It could also “tend to reduce the size of the financial sector,” which the fund presents as a good thing.
Now, the I.M.F. proposal is actually quite mild. Nonetheless, if it moves toward reality, Wall Street will howl.
This isn't a bitter, angry liberal economist seeking cruel and unusual punishment for the crooks who decimated our savings accounts and took away our homes. Paul Krugman's support of the Financial Activity Tax is, with any luck, shared by a majority of us -- minus congressional Republicans.
Obama should not have to go to the Cooper Union to defend financial reform. Republicans who oppose reform should be -- and doubtless will be, in the long run -- the ones who will suffer the political consequences. They certainly shouldn't be allowed to stand in the way of necessary action.
After taking a big hit in the immediate aftermath of the crisis, financial-industry profits are soaring again. It seems all too likely that the industry will soon go back to playing the same games that got us into this mess in the first place.So what should be done? As I said, I support the reform proposals of the Obama administration and its Congressional allies. Among other things, it would be a shame to see the antireform campaign by Republican leaders — a campaign marked by breathtaking dishonesty and hypocrisy — succeed.
But these reforms should be only the first step. We also need to cut finance down to size.
Getting rid of excess isn't easy, particularly when consumption is so tempting. Don't waste time trying to make it more pleasant or easier. Just do it.
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Economist Simon Johnson, one-time head of the IMF, and author of "13 Bankers" detects a sea change in our attitudes towards Wall Street.
The ideology of unfettered finance is crumbling. Whatever you think of the merits of the Goldman case from a legal or short-term perspective, the SEC’s allegation – and Goldman’s response – have further moved the mainstream consensus away from “finance is generally good” to “big banks are frequently scary.”
What we're experiencing now is reminiscent of banker Nicholas Biddle's battle with President Andrew Jackson.
...People understood that Jackson was essentially right. The Second Bank had become so powerful that it could challenge elected executive authority and, if Biddle won, the consequences for democracy would be dire. We are now in the phase when the most dangerous of our banks – and the people behind them – will go to any lengths to distort the realities and completely mislead people. The only way to deal with this is to do what Andrew Jackson would have done – attack, in no uncertain terms, misrepresentation wherever we find it.
The battle now, as then, is a battle against plutocrats and for democracy.
We should now view Goldman Sachs and our other five megabanks in the same terms that Andrew Jackson’s secretary used for the Second Bank of the United States, “Independently of its misdeeds, the mere power, – the bare existence of such a power – is a thing irreconcilable with the nature and spirit of our institutions.”
