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Title: Obama tells banks: `We want our money back'
Source:
AP
URL Source: http://finance.yahoo.com/news/Obama ... Stories&pos=main&asset=&ccode=
Published: Jan 14, 2010
Author: Jim Kuhnhenn
Post Date: 2010-01-14 14:31:33 by Fred Mertz
Keywords: Tax, TARP, Banksters
Views: 986
Comments: 21
Obama: Tax banks to recover remaining cost of public's big bailout; `We want our money back' WASHINGTON (AP) -- President Barack Obama told banks Thursday they should pay a new tax to recoup the cost of bailing out foundering firms at the height of the financial crisis. "We want our money back," he said. In a brief appearance with advisers at the White House, Obama branded the latest round of bank bonuses as "obscene." But he said his goal was to prevent such excesses in the future, not to punish banks for past behavior. The tax, which would require congressional approval, would last at least 10 years and generate about $90 billion over the decade, according to administration estimates. "If these companies are in good enough shape to afford massive bonuses, they are surely in good enough shape to afford paying back every penny to taxpayers," Obama said. Advisers believe the administration can make an argument that banks should tap their bonus pools for the fee instead of passing the cost on to consumers. The president's tone was emphatic and populist, capitalizing on public antipathy toward Wall Street. With the sharp words, he also tried to deflect some of the growing skepticism aimed at his own economic policies as unemployment stubbornly hovers around 10 percent. The proposed 0.15 percent tax on the liabilities of large financial institutions would apply only to those companies with assets of more than $50 billion -- a group estimated at about 50. Administration officials estimate that 60 percent of the revenue would come from the 10 biggest ones. They would have to pay up even though many did not accept any taxpayer assistance and most that did have repaid the infusions. Obama said big banks had acted irresponsibility, taken reckless risk for short-term profits and plunged into a crisis of their own making. He cast the struggle ahead as one between the finance industry and average people. "We are already hearing a hue and cry from Wall Street, suggesting that this proposed fee is not only unwelcome but unfair, that by some twisted logic, it is more appropriate for the American people to bear the cost of the bailout rather than the industry that benefited from it, even though these executives are out there giving themselves huge bonuses," Obama said. He renewed his call for a regulatory overhaul of the industry and scolded bankers for opposing the tighter oversight in legislation moving through Congress. "What I'd say to these executives is this: Instead of setting a phalanx of lobbyists to fight this proposal or employing an army of lawyers and accountants to help evade the fee, I'd suggest you might want to consider simply meeting your responsibility," Obama said. At issue is the net cost of the fund initiated by the Bush administration to help financial institutions get rid of soured assets. The $700 billion Troubled Asset Relief Program (TARP) has expanded to help auto companies and homeowners. Insurer American International Group, the largest beneficiary at nearly $70 billion, would have to pay the tax. But General Motors Co. and Chrysler Group LLC, whose $66 billion in government loans are not expected to be repaid fully, would not. Administration officials said financial institutions were both a significant cause of the crisis and chief beneficiaries of the rescue efforts, should bear the brunt of the cost. Bankers did not hide their objections. "Politics have overtaken the economics," said Scott Talbott, the chief lobbyist for the Financial Services Roundtable, a group representing large Wall Street institutions. "This is a punitive tax on companies that repaid TARP in full or never took TARP." Even before details came out, Jamie Dimon, chief executive of JPMorgan Chase & Co., said: "Using tax policy to punish people is a bad idea." Obama is trying to accelerate terms that require the president to seek a way to recoup unrecovered money in 2013, five years after the law was enacted. So far, the Treasury has given $247 billion to more than 700 banks. Of that, $162 billion has been repaid and banks have paid an additional $11 billion in interest and dividends. In Congress, Democrats embraced Obama's proposal while Republicans rejected it. "I think it is entirely reasonable to say that the industry that, A, caused these problems more than any other and, B, benefited from the activity, should be contributing," said Democratic Rep. Barney Frank of Massachusetts, chairman of the House Financial Services Committee. But GOP Rep. Scott Garrett of New Jersey, who's on Frank's committee, called it a "job-killing initiatives that will further cripple the economy by increasing fees passed on to consumers and small businesses, while reducing consumer credit."
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#2. To: Fred Mertz (#0)
How does the administration plan to control the fookin banks to stop them from passing on the costs to consumers?
I HOPE you're not actually expecting Freddy to answer that question.... However, your point is well taken. The banks WILL jamb it up the wazoo of the very SAME US Taxpayer that the Congress forced into bailing out these SAME weaselly banks and brokerage houses. And 0bama KNOWS it. 0bama is playing good-cop, bad-cop with both 0bama and the banks hoping people momentarily forget that it was the House-controlled Democrat Party who overwhelmingly voted to steal TARP money from the American Taxpayer and have it siphoned TO these evil banks. On February 10, 2009, 0bama-appointee - the newly confirmed Secretary of the Treasury Timothy Geithner - outlined his plan to use the stolen $300 billion or so Taxpayer dollars remaining in the TARP funds. He and 0bama intended to use $50 billion of hijacked Taxpayer money for foreclosure mitigation and use the rest of the stolen money to help fund private investors to buy toxic assets from banks. (Oooops!) Nevertheless, 0bama's highly anticipated speech in support of this Grand Theft coincided with a nearly 5 percent drop in the S&P 500 and was criticized for being short on details. On March 23, 2009, U.S. Treasury Secretary Timothy Geithner announced a Public-Private Investment Program (P-PIP) to buy MORE toxic assets from banks' balance sheets. (Ooops!!) The 0bama Administration and Dem-controlled Congress will NEVER stop spending till the day he and they are jettisoned like the scummy flotsam that are.
Some fees banks do pass along. The easiest ones for them to do so is processing fees. Other fees they cannot pass along. One of those fees is the FDIC charge they incur on their deposits. There is no way for them to recapture it. If I understand the assets that are to be assessed this fee, banks would be faced with the same issue...no way to recapture. This is on a par with that same argument that companies don;t pay taxes they just pass along the cost to its customers which is not only a stupid argument but...well...yea...that sums it up...it's stupid. Some companies pay taxes quarterly...others semi-annually and other annually. The taxes paid on money ALREADY MADE not that it is going to make and of which it has 0 idea how much it will.
This real business case scenario might be understandable instead of ironic has the banks NOT just stolen BILLIONS in bail-out cash (through the actions of bribed Senators) as a result of their OWN gross mismanagement and bamboozling. This is merely a sh*t-icing on the cake. This is on a par with that same argument that companies don;t pay taxes they just pass along the cost to its customers which is not only a stupid argument but...well...yea...that sums it up...it's stupid. Some companies pay taxes quarterly...others semi-annually and other annually. The taxes paid on money ALREADY MADE not that it is going to make and of which it has 0 idea how much it will. Again, the public is NOT really going to see this as "business as usual." They're going to see it as bending even further over for parasitic thieves who are adding insult to injury, although this anger should be directed more at the whoring Senators and Congressmen who voted FOR this wholesale thievery.
You are hardly a conduit of accuracy when it comes to how the American public is going to view something. Your logic here is non existent. How is making banks pay a fee on the assets at risk going to make Joe Sixpack angry?
My logic by far transcends your delusions. HELLO! Joe Sixpack IS aware that he's been royally screwed by the $700 billion dollar TARP bailout. You oughta mingle with the little people, war. "Little things" like petty ante BS fees, over-officious qualifications, and credit card rates rising from 8% to 18% for those who've paid their bills on times (aka NOT "asset risks") only serve further to enraging patrons. Of course YOU don't get it.
#15. To: Liberator (#13)
That $700bln kept the unemployment rate from going to 20% and higher. It didn't screw Joe Sixpack at all. What screwed Joe Sixpack was 8 years of total abdication of any sense of fiscal or regulatory responsibility by Boy Blunder and his apparati... Little things" like petty ante BS fees, over-officious qualifications, and credit card rates rising from 8% to 18% Consumer Credit fell $17bln in November...do you know what most of that is? Here's a helpful hint...DON'T USE CREDIT CARDS.
Top • Page Up • Full Thread • Page Down • Bottom/LatestAdvisers believe the administration can make an argument that banks should tap their bonus pools for the fee instead of passing the cost on to consumers.
#5. To: Ibluafartsky (#2)
(Edited)
How does the administration plan to control the fookin banks to stop them from passing on the costs to consumers?
#6. To: Liberator (#5)
The banks WILL jamb it up the wazoo of the very SAME US Taxpayer that the Congress forced into bailing out these SAME weaselly banks and brokerage houses.
#10. To: war (#6)
Some fees banks do pass along. The easiest ones for them to do so is processing fees. Other fees they cannot pass along. One of those fees is the FDIC charge they incur on their deposits. There is no way for them to recapture it. If I understand the assets that are to be assessed this fee, banks would be faced with the same issue...no way to recapture.
#11. To: Liberator (#10)
#13. To: war (#11)
Your logic here is non existent. How is making banks pay a fee on the assets at risk going to make Joe Sixpack angry?
Replies to Comment # 13. Joe Sixpack IS aware that he's been royally screwed by the $700 billion dollar TARP bailout.
End Trace Mode for Comment # 13.
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