Obama's Bank Fee

Quel surprise: bankers will oppose the proposed Obama bank fee. The only ground they've been able to stand on so far is one of the silliest of canards: we might reduce the amount of banking. The Republicans have been quick to parrot the theme, which puts them in the awkward position of comforting the comfortable and afflicting the afflicted. There's a great opportunity for the Democrats to demagogue the daylights out of this thing, but so far as I can tell, there isn't a single effective demagogue left in the Democratic ranks. Does no one dare say "malefactors of great wealth?" No, I thought not, or not in a way sufficiently aggressive to avoid ridicule and derision.

The estimated $90 billion revenue sounds rather trifling to me, as a slice of bank wealth. I do think it's a clever stunt to peg it to bank liabilities, with the intention of discouraging leverage, although I suspect the piddling payment spread out over a number of years is not enough to motivate very much.

But in any event, nobody seems to have focused on the buffalo-at-the-picnic point: we don't need such a big banking sector. Cutting the size and wealth of the bloated bank sector is likely to increase rather than reduce general well-being. Right now I am perfectly happy to put them in the category of sawed-off shotguns were we tax precisely because, not in spite, of the possibility tht we might reduce the activity