I received an interesting article from Tom Brown @ bankstocks.com today about the administration. The thing that our politicians don’t understand is that anything they pass will ultimately find it’s way to consumers. Do you think the bank’s won’t try to find a way to recoup this lost revenue? I agree with Tom that the media still has the banking industry as the “bad guy” and are doing a very bad job of telling the public that our government has actually made money on the TARP funds given to banks.
The following is part of an exerpt of the article:
“The White House’s assault on the banking industry just won’t stop. For the third year in a row, the Obama administration has stuck in its budget a proposed tax on large banks—a “Financial Crisis Responsibility Fee” of around 17 basis points of deposits and liabilities—that’s intended to “recoup the costs of the TARP program as well as discourage excessive risk-taking.” The White House says in its new budget that it expects the levy to bring in $61 billion.
Please. This proposed tax isn’t just outrageous, it’s ridiculous. To begin with, the banking industry has already repaid TARP—and then some. If you add up the dividends the government received on its preferred shares and the gains it earned when it sold its warrants, the bank portion of the program has netted the feds a gain of over $13 billion with more still to come. There’s nothing more to recoup! Yes, TARP overall has cost the government money. But that’s because the investments in the non-banks in the program, AIG, Chrysler, and G.M., are still money losers. But those three are non-banks! If the government is so keen to get its TARP money back, why doesn’t it dream up new ways to tax the auto industry? Yet I somehow doubt that that’s going to happen…… It’s just another instance of this administration’s seeming fixation with showering benefits on groups it approves of while punishing those it does not. Are you in the solar energy business? Here are some subsidies and tax credits! Are you a unionized auto worker? No problem, we’ll save your contract by stiffing your employer’s secured creditors!….. if you’re looking for evidence that this White House wants to become more banking-friendly, this new bank tax is a sign you’re likely to be disappointed.”