“The baleful reality is that the big banks, the freakish offspring of the Fed’s easy money, are dangerous institutions, deeply embedded in a bull market culture of entitlement and greed.”
-David Stockman, director of OMB under President Ronald Reagan.
Of all people, David Stockman has an OpEd in today’s NYT, titled Taxing Wall Street Down to Size.
Two items are noteworthy (besides his lifting my “If you want less of something, tax it.” line):
I am not sure I buy his description that taxing the TBTF banks is somehow reflective of Supply Side Economics. In my analysis, its a back door way to get regulation in that a corrupt Congress wont or cant allow.
Second, was how sharply worded his criticism of Wall Street is:
“The banking system has become an agent of destruction for the gross domestic product and of impoverishment for the middle class. To be sure, it was lured into these unsavory missions by a truly insane monetary policy under which, most recently, the Federal Reserve purchased $1.5 trillion of longer-dated Treasury bonds and housing agency securities in less than a year.”
“This was a measurement of the perilous extent to which bad investments, financed by debt, had come to distort the warp and woof of the economy. Behind the worthless loans stands a vast assemblage of redundant housing units, shopping malls, office buildings, warehouses, tanning salons and fast food restaurants. These superfluous fixed assets had, over the past decade, given rise to a hothouse economy of jobs that have now vanished.”
The entire piece is well worth a read . . .
Too Big To Fail Tax (January 13th, 2010)
Taxing Wall Street Down to Size
NYT, January 19, 2010