Alliance for Democracy

Pres proposes Financial Crisis Responsibility Fee; other needed changes.‏

Posted in Financial crisis, Financial Speculation Tax, Glass-Steigall, Rep DeFazio, Sen. Sanders, Tobin Tax by Alliance for Democracy Portland OR on January 15, 2010

The President demanded that “We want our money back, and we’re going to get it.” 
It appears, at least at first look, that the President is moving in the right direction on the economy.  We so often hear how people who have financial problems should have acted responsibly, as if the economic crisis is a matter of personal responsibility rather than a systemic problem.  If only people had not tried to buy the American dream (a car and a house), then none of this would have happened.
So it is refreshing that the president’s new proposal to wrestle some money out of Wall Street to repay TARP money extended to the too-big-to-fail financial institutions should be called the Financial Crisis Responsibility Fee.  It is time we say that the economic crises is due to the failure of Wall Street to act responsibly.  In announcing this proposal, the President demanded that “We want our money back, and we’re going to get it.” 
Below my signature is a note from Vice-President Biden on the proposal asking for your support of the President.
Note that getting our money back does not change anything. It still leaves the system as is with the same banks playing the same casino games with the economy which brought us to this point.  The President should be proposing much stronger action than this.  But, as they say, it is a step. 
The Center for Economic & Policy Research does a monthly newsletter and this month’s talked about a proposal from Rep DeFazio for a “Tobin Tax”.  Rep DeFazio is calling it a Financial Speculation Tax.   Quoting from the newletter,

“Support for a Financial Speculation Tax Grows
Support continues to build for a financial speculation tax (FST). Dean Baker was one of 200 economists, including Nobel Laureate Daniel McFadden and James K. Galbraith, who signed a letter in support of the FST. Representative Peter DeFazio (D-OR) and Senator Tom Harkin (D-IA) have introduced bills calling for the adoption of an FST.  Dean Baker continues to point out the benefits of the FST, responding to criticism here and offering it as a viable solution to address the deficit in an interview on NPR’s Morning Edition. And just today, Steven Pearlstein of the Washington Post endorsed the FST.”

Rep DeFazio has been quoted as saying, “We need a shift in this country to ask not what America can do for Wall Street, but ask what Wall Street can do for America.”

The DeFazio bill is H.R.1068 – Let Wall Street Pay for Wall Street’s Bailout Act of 2009.  He has also introduced a second very similar bill called the Let Wall Street Pay for the Restoration of Main Street Act of 2009 (HR4191).  Read more on these at  
Beyond these proposls, we still need to separate the investment banks from the commercial banks as the depression-era Glass-Stiegel Act did.  The repeal of the major provisions of that act during the Clinton years needs itself to be repealed. And we need to enact Sen. Sanders bill which would break up the Too big to Fail financial institutions. 

David e. Delk, Alliance for Democracy – Portland Chapter 503 232 5495
To comment on this email, please visit the Alliance for Democracy blog at

—- Original Message —–

From: Vice President Joe Biden


Sent: Friday, January 15, 2010 12:35 PM

Subject: We want our money back

Yesterday, President Obama announced our proposed Financial Crisis Responsibility Fee on the country’s largest banks:“My commitment is to recover every single dime the American people are owed. And my determination to achieve this goal is only heightened when I see reports of massive profits and obscene bonuses at some of the very firms who owe their continued existence to the American people…We want our money back, and we’re going to get it.”The fee would recover every penny loaned to Wall Street during the financial crisis and stop the reckless abuses and excesses that nearly caused the collapse of our financial system in the first place.You can add your name by clicking here.

But the banking industry — among the most powerful lobbies in Washington — is already launching attacks to stop Congress from enacting the proposal.

Barack and I aren’t backing down. But to win, we’ll need the American people to add their voice right away.

Thankfully, OFA supporters are already signing on to a bold statement of support: “We want our money back — and we stand with President Obama to make sure we get it.”

Add your name

The proposal is expected to recoup billions from the big banks, most of it from the ten largest. As the President said, “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.”
Click here to add your name to the statement:

There is much more work to do to reform the financial system and create a new era of accountability. But the Financial Crisis Responsibility Fee is a crucial step. And with the banks already working to tear it down, I hope that I can count on you to speak out to show that Americans stand with us as we take them on.

Change isn’t easy, but it’s certainly worth fighting for. I’m glad you’re in this fight with us.

Thank you for making it possible,

Vice President Joe Biden



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