Dean Baker makes a logical, fact-based, impassioned argument here. And his point is accurate: there is a disconnect in the logic deficit hawks use to promote the policies they support. For ‘disconnect’ read ‘flagrant hypocricy’.

The problem is that Dean argues as though he is dealing with intellectually honest people, as though the face value of what so-called deficit hawks argue represents the substance of what they actually mean and want. It doesn’t.

It’s clear that the rhetoric used by conservative deficit hawks is nothing more than smoke and mirrors. In reality, the only policies they support are those that make them even richer, whatever that costs the rest of us. The words they use are merely means to that end.

Even so, this is a nice article, and a suite of points worth keeping in your pocket.

Why Don’t the Deficit Hawks Want to Tax Wall Street?

by Dean Baker

The intensity with which the country’s leading deficit hawks continue to ignore financial speculation taxes (FST) is getting ever more entertaining. While deficit hawks like Wall Street investment banker Peter Peterson, Morgan Stanley director Erskine Bowles, and the Washington Post never tire of preaching the virtues of shared sacrifice, somehow sacrifice for Wall Street never features as a part of this story.

The refusal of this group to consider financial speculation taxes is becoming more striking because most of the world appears to be moving in this direction. Last spring, the European Parliament voted by an almost 4-to-1 margin in support of financial speculation taxes. The European Commission, the executive body of the European Union (EU), is now making plans to implement a modest tax beginning in 2014.

Even with the low tax rates being considered by the commission (e.g. 0.05 percent in each side of a stock trade), it is estimated that an EU-wide tax could bring in as much as $60 billion a year. Two of the leading proponents of a financial speculation tax in Europe are German Chancellor Angela Merkel and French President Nicholas Sarkozy, both of whom are leaders of the conservative parties in their countries. Still, even liberal deficit hawks here do not want to talk about financial speculation taxes.

We learned from Ron Suskind’s new book on the making of economic policy in the Obama Administration that a financial speculation tax was considered at the very top levels. According to the book, Obama himself even leaned in this direction. But the deficit hawks never discuss financial speculation taxes.

Last week, Bill Gates added himself to the list of FST supporters. In a report that he was asked to prepare for the G-20 on funding development assistance he cited an FST as one possible mechanism. But the deficit hawks never discuss financial speculation taxes.

The deficit hawks manage to ignore financial speculation taxes even when they pop up in front of their face. Two summers ago, Peter Peterson helped to finance a lavish full day set of town halls in dozens of communities around the country.

The town halls were supposed to come up with ways to reduce the budget deficit after being lectured by expert deficit hawks. While cuts to Social Security and Medicare were hugely unpopular, a financial speculation tax was one of the most widely favored paths for reducing the deficit. Yet, the deficit hawks never discuss financial speculation taxes, even though they won considerable support at their own venue.

In short, financial speculation taxes are a route to reducing long-term deficits that has won support both among the general public and among policy experts and leading political figures around the world. Yet, they are somehow excluded from discussions of the deficit in policy circles in the United States. Could this have to do with the fact that so much of the support for deficit reduction comes from Wall Street?

It is difficult not to believe that Wall Street’s outsized role in pushing deficit reduction has some impact on the route the debate takes. After all, if the Farm Bureau was sponsoring most of the research on deficit reduction and financing the campaigns of the leading deficit hawks, it is reasonable to believe that lower farm subsidies would not be a prominent item in debates on the deficit.

What is most remarkable in this picture is the complete failure of the media to identify Wall Street’s role in pushing this deficit reduction agenda. For example, Erskine Bowles, who was a co-chair of President Obama’s deficit commission, is never identified as a director of Morgan Stanley.

It is entirely possible that this role has no influence on Bowles’ views on the deficit, but it still seems that public should know about it. If a commission member were receiving $350,000 a year from the United Auto Workers or AFSCME, it is difficult to imagine that the media would not include this fact as part of the commissioner’s standard identification.

The media also see little reason to balance the Wall Street influence with people presenting an alternative perspective. For example, the Post ran a news article on the budget last week featuring the views of two people who headed Peter Peterson-funded organizations. These views were complimented by the views of an unnamed Republican staffer and a long-time corporate lobbyist. This was Fair and Balanced reporting at the Post.

In sum, it is hard to understand why taxing financial speculation never appears on the agenda of the deficit hawks or gets mentioned in budget reporting if the issue really is deficit reduction. On the other hand, if this is all about using an economic crisis to push a longstanding agenda to cut Social Security and Medicare, then everything suddenly makes sense.

Follow Dean Baker on Twitter: www.twitter.com/DeanBaker13

Original post on the Huffington Post.

46 Responses to “Wall Street’s Double Standard”

  1. This an age war. The old and decrepit need material wealth, political power and mass suffering to make themselves and their often way too young sluts, feel young and veril…little blue pills for another hotel maid maybe?…

  2. N votng a person 2bcome our next pres. especially nthis economic crisis.Tht person, must have an excellent proven record & it’s Gov. Romney.

  3. Europe aimed to nail down a solution to the worst economic crisis in its history Sunday, as the spotlight at an emergency meeting of EU leaders fell on Italy amid contagion fears in the eurozone.

  4. duvage tal says:

    LOOK UP NIKOLA TESLA and why do you think we don’t have free energy because they can’t control us if we don’t need gas or to pay electric bills ect,, if you want to drive until the wheels fall off you can’t and if you want to go attack by one day you can’t if you can’t buy gas to make it, if you want to go anywhere you need gas NIKOLA TESLA isn’t talked about as much as the stupid ass Thomas Edison is taught in schools what about the man who wanted to power the world for freeWIRELESSelectity

  5. aderski tahad says:

    …Now days, people barely comment about the video itself and instead, comment about the ‘troll(s)’ and vocaloid haters -__- Anyhow, this really represent the ‘Rin’ in this story well. Me like ^_^

  6. breweymona gaumiak says:

    I took the time to look up Christopher Busby and it seems a tad bit odd that this fellow has the same photo himself in that suit on Wikipedia. We have to really research the backgrounds of these to know how much they are being paid to keep us negligent of the truth. Peace…I’m done.

  7. nenbulmac says:

    I was really looking foward to hearing Russ Baker; but he has not done much homework on the topic so he had little to contribute Also, he dismisses architects and engineers who have done homework because he assumes they have an agenda… or that is how I understood him. He says that architects and engineers who are not members of the .org should be consulted. But the question I ask is once these new people do evaluations and join the .org are they no longer credible?

  8. baeufel dot says:

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  9. this guy is a bit of a fool all he is thinks about is the long term horizon of course the dollar is dead in the long term. the debt would mark to market their asset and wount come to tell the truth about there liabilities until they have position themselves to have a large enough stake in real assets. Also why doesnt he acknowledge credit as a form of money (currency) which it is and probable one of the biggest contrubuter to the velocity of money. No government what a joker.

  10. henman boet says:

    I agree with the person who says that one currency won’t work. A single currency amongst countries in competition with each other won’t work. But do away with unnecessary competition like the competition between nation states by taking away the concept of a nation, then a single currency would work. I believe government isn’t the problem it’s just the government we happen to live in that is causing the problems. A government that took care of the interests of the majority over the minority (cap

  11. huniakonwa johr says:

    Yes, bad central bank policy does advantage bankers and speculators to the detriment of everyone else, but the problem is ’caused’ by the central bank enacting Keynesian, government policy. The problem is not caused by the individual banks. The profits of the individual banks are a ‘symptom’, not a cause.

  12. similar but not the same. in a communist society everyone is equal. in society, not everyone may be equal, but everyone could strive to be the best that they could be to benefit society, but without breaking the laws or harming others. Communism is not like this. Totalitarianism is like this. Get your isms figured out before you get confused. In communism there are no laws because everyone gets along in peace and harmony. clearly not the case here.

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  18. diublitahl says:

    Does no one find the orchestration of these riots at little too well planned. Were they “encouraged to happen” by political forces?

    The riots were “encouraged” to happen as well as the burning of buildings without fire services being allowed to attend immediately to fires.

    There is now suspicion of “ special forces” agents murdering 3 people in Birmingham in a “false flag / agent provocateur attack.

    All done in anticipation to curb “Occupy ” sit in demonstrations around the country

  19. Catherine, yes, I was thinking of you. My mother did find my sleeping bag, which did warm me up, although not before I had a complete meltdown. Ah, motherhood.

  20. jaap zue says:

    conspiracy fact, not theory. what i’m not buying is the weak conspiracy theories put forward by those who think we 70% are incompetent to run our own lives or uphold the Constitution. The centralization is due to corporatism or national socialism or nationalism (all one & same) NOT CAPITALISM. Some people don’t know the diff. FREE MARKET CAPITALISM such as MISES [dot] org teaches – didn’t cause this. Too big to fail + laws skewed favoring corps, plus corp policy of greed causes the problems.

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  22. buchilah vese says:

    Youth minimum wage cut: The theory seems to be that to the economy you need to make the rich richer and the poor poorer. Handy that.

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  26. then without states will we be subject to unparalleled corporatism? One master for another and without any pretense at regulation?

  27. Cutting taxes has no impact on creating jobs while deregulation of the financial sector was a big reason for the Wall Street/banking fiasco.

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  29. “Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power” ~ Benito Mussolini

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  32. humberhams says:

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  33. Really wish people on twitter would stop conflating the current state enforced corporatism and fiat currency with free market capitalism…

  34. German banks/state is benefiting from the economic crisis in the immediate because of exploitation of other European countries like Greece

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  41. Judging by her Reddit comments, she was trying to be obscure (she pretended it was a man who wrote the note, and was otherwise misleading) and she tried to head off speculation and detective work, and then reposted without the signature. I think she had no idea that the story would blow up and get attention, and she probably didn’t realize how easy it was to read the signature and use that to determine who the customer was. I don’t think she intentionally made it so that the customer would be outed. But she just wasn’t careful enough. And I have to agree with Applebee’s that it’s a firing offense. So I’m not personally upset by Applebee’s actions. I do dislike the pastor’s action of calling to get everyone fired, though.

  42. Dearest, how can we contact u for an interview? Porn Schmorn, we want to talk to an ancestor of the ‘Great Bear of Wall Street’

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  44. Not really. I think the word you meant to use was corporatism. I’m not going to explain it. You’re right? –

  45. speckle doepker says:

    Why did he spend 5 mins talking on tax on ac. restaurants and 5 seconds on aviation said to boost the economy? No priority?

  46. non balmina says:

    The US Government and the US Federal Reserve downplay the threat of inflation. There are two primary reasons for this:

    1) Acknowledging higher inflation would mean both revising GDP growth much lower (last FDP growth would have been negative 1% if you accounted for the real increase in costs of living).

    2) One of the primary arguments the Fed uses for why it can print hundreds of billions of Dollars without consumers it because inflation remains “contained” or “transitory.”

    Because of this, you won’t see any real acknowledgement of inflation by the US Government or the Fed until it’s far too late. Remember, one of the central goals for these organizations is to maintain confidence in the system.

    Indeed, while the mainstream financial media continues to trumpet the wonders of stocks closing in on all-time highs, larger, more sophisticated players are preparing for a financial meltdown in a much larger market: bonds.

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