AFL-CIO supports taxing banks to recoup bailout funds

And now that Democratic President Barack Obama really wants to crack down on the big banks, by curbing “too big to fail” and re-erecting many of the walls torn down a decade ago by a GOP Congress and Democratic President Clinton between banks and securities traders, the fed supports that, too.

And AFL-CIO President Richard Trumka, like some lawmakers, wants to tax the rampant securities trading on Wall Street — the shuffling of pieces of paper, backed by nothing, whose collapse in values produced the Great Recession that has thrown millions out of work.

“Hard-working Americans will not be ATMs for Wall Street. Today the AFL-CIO demands that Wall Street stop bankrupting America,” Trumka declared.

He added the tax on the banks should recoup the bailout money. Some banks have started repaying the government. And Trumka said the fed is launching a national campaign to pressure lawmakers to approve taxing the banks and recouping the funds.

Obama proposed the tax after the big banks — which took the federally provided Troubled Asset Relief Program billions last year — declared record profits and record bonuses for their executives: $145 billion in bonuses.

On Jan. 21, Obama proposed more curbs on the banks, including banning them from investing in hedge funds and other risky businesses. “We’ve seen banking industry lobbyists descending on Capitol Hill to block common-sense reforms,” he said.

Americans for Financial Reform agreed. The union-backed coalition of more than 200 groups is lobbying Washington and mobilizing members nationwide to demand Congress pass comprehensive financial reform and re-regulation — of banks, hedge funds, securities traders and all other financiers.

Obama’s “Financial crisis responsibility fee as an important step in protecting taxpayers and ensuring that Wall Street is held accountable,” said AFR Director Heather Booth. “The fee will help taxpayers recoup some of the money used to bail out the big banks and financial institutions, and it reaffirms the basic principle that the biggest lenders cannot gamble recklessly and then expect taxpayers to pay their debts.

“The president is right, that to get our economy back on track, we need that principle — and accountability and fairness — to be the ground rule for the financial markets,” Booth added.

But taxing the banks is not enough, Trumka and Booth said. Wall Street’s compensation system — the more you trade and the higher the value of your trades, the more you earn and the bigger bonus you get — led to and fed the speculation in pieces of paper, backed by nothing, that produced the crash and the current recession.

So both Trumka and Booth want Congress to throw a monkey wrench into the speculation, by taxing the financial trading, too. “We join unions worldwide in seeking a tax on securities transactions to curb financial speculation. Financial companies must not be allowed to go back to business as usual — or worse,” Trumka said.

Mark Gruenberg writes for Press Associates, Inc., news service. Used by permission.

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