‘It cannot be acceptable that the benefits of success in [the banking] sector are reaped by the few, but the costs of its failure are borne by all of us.’ — British Prime Minister Gordon Brown.
It is important that the chartered banks be prevented from entering any financial undertaking that involves significant risks and undue insurance risks to consumers with the exception of Canadian banks who should return to their traditional roles. Our apologies to holders of bank stocks, stock prices will return to more conservative values seen before 1997.
If members wish to decrease the G20 market speculation and the undesirable volatility it produces then they must address both the manner and speed at which the market is viewed. The most obvious solution is to regularly monitor and adjust the tick “minimum” size used to buy or sell individual equity which depends on the volatility of its market. If more volatility is present in both directions over the size of the tick, this will deter and reduce the large-scale speculation as traders will take more personal risks to make a quick buck. The stock market should not be regarded as a casino, but as a market where one can invest and not speculate.
As many commentators noted, the tax will be paid by the consumer and result in a awful moral hazard in that the banks will feel insured against any bad result.
The answer is to break banks that might pose a global hazard to the economy into smaller units that can fail. Several hundred large regional banks are set to fail this year without much impact on the financial system or the economy.
Secondly, adequate regulation is necessary so that the financial system does not suck to much money out of the economy. Service charges, by every sector of the economy, are a prime example of unnecessary greed. Most derivatives are not useful either. Some are so complex that they can not be understood by any but their issuers. The uncontrolled controlled growth of derivatives allowed banks and others to CREATE MONEY outside of the control of central bankers.
Thirdly, if banks get too large, or have out sized profits or bonuses, they should be heavily taxed, and the money returned to circulate through the economy via reduction of personal income taxes by the government. More money in people’s pockets will stimulate the economy better and faster than anything else.
Flaherty says no to global financial tax
Canadian Finance Minister Jim Flaherty has poured cold water over a proposal by British Prime Minister Gordon Brown for a global tax on financial transactions to fund future bank bailouts.
“That’s not something that we would want to do. We’re not in the business of raising taxes,” Flaherty said after a Group of 20 finance ministers meeting in St. Andrews, Scotland.
“But the principle, the idea, that banks should plan ahead for their own demise and fund that with a living will, or some other concept like that, is a good one and more work is going to be done on that by the G20 finance ministers.”
The U.S. also rejected the idea.
In a speech Saturday to the finance ministers, Brown said such a tax should be considered to raise the level of accountability in the financial sector.
“I believe we should discuss whether we need a better economic and social contract to reflect the global responsibilities of financial institutions to society,” Brown told the G20 ministers.
“It cannot be acceptable that the benefits of success in this sector are reaped by the few but the costs of its failure are borne by all of us,” he said.
Brown said a tax on financial transactions would need to be implemented globally.
“Let me be clear: Britain will not move unless others move with us together,” he said of the levy, modelled after the so-called Tobin tax proposed by American economist James Tobin in the early 1970s as a way of curbing speculation on financial markets.
You can read the rest of the article at CBC News
Here is a little background about the idea of a global tax:
Obama Pushes Bill That Would Mandate Global Tax
Paul Joseph Watson Prison Planet February 14th, 2008
Presidential frontrunner Barack Obama is pushing a bill that will lead to the implementation of a UN global tax, costing the U.S. at least $845 billion dollars over thirteen years in the name of fighting worldwide poverty, as well as banning “small arms and light weapons”.
The “Global Poverty Act,” which is sponsored by Obama, is up for a Senate vote today, and if passed would mandate the U.S. to spend 0.7 percent of the gross national product on foreign aid, on top of the money being sent out of the country already.
The bill passed the House by a voice vote last year because most members failed to read what was actually in it. The words “global” and “poverty” in the title were presumably enough to convince them that it must be good.
In reality, the bill also “Commits nations to banning “small arms and light weapons” and ratifying a series of treaties, including the International Criminal Court Treaty, the Kyoto Protocol (global warming treaty), the Convention on Biological Diversity, the Convention on the Elimination of All Forms of Discrimination Against Women, and the Convention on the Rights of the Child,” writes Cliff Kincaid.
“Jeffrey Sachs, who runs the U.N.’s “Millennium Project,” says that the U.N. plan to force the U.S. to pay 0.7 percent of GNP in increased foreign aid spending would add $65 billion a year to what the U.S. already spends. Over a 13-year period, from 2002, when the U.N.’s Financing for Development conference was held, to the target year of 2015, when the U.S. is expected to meet the “Millennium Development Goals,” this amounts to $845 billion. And the only way to raise that kind of money, Sachs has written, is through a global tax, preferably on carbon-emitting fossil fuels.”
A UN controlled global tax has long been a cherished goal of the elite and they have attempted to piggy-back it on numerous different pretexts, most recently via a global carbon tax on fuel, a move that was advanced at the recent summit in Bali.
During the summit, over one hundred prominent scientists signed a letter dismissing the move as a futile bureaucratic scheme which will diminish prosperity and increase human suffering.
In 2005, former French President Jacques Chirac called for the imposition of a global tax to finance the fight against AIDS.
Perfectly happy with giving Bush carte blanche to continue illegal spying on American citizens with the passage of this week’s telecom immunity bill, the Senate seems destined to rubber stamp legislation that would lead to a global carbon tax.
President Bush has overseen the biggest increase in foreign aid since the Marshall Plan and is highly unlikely to veto the bill if it is passed.
Contact the Senate and voice your opposition to this bill. Call the switchboard at (202) 224-3121 and asked to be connected to the office of your Senator.