Big Issues

There are big issues that need to be dealt with on Wall Street - and the good news is that the Obama team are on the case and working hard to do something about it. I want them to succeed.

But as usual the Republicans are going all out to obstruct and obfuscate and cause chaos - because they can.

Paul Krugman talks about much of Wall Street being a "racket" - and that is in the US context which roughly translated to our language is a "con job".

I don't know the truth and I am not close enough to the action to know but Paul Krugman puts it like this.

"We’ve known for some time that Goldman Sachs and other firms marketed mortgage-backed securities even as they sought to make profits by betting that such securities would plunge in value. This practice, however, while arguably reprehensible, wasn’t illegal. But now the S.E.C. is charging that Goldman created and marketed securities that were deliberately designed to fail, so that an important client could make money off that failure. That’s what I would call looting."

But in the US the Republicans are out of government and are doing a Tony Abbott - so they will make noise and distort the facts to get their "base" on the case - presumably because they will be happy for another global financial crisis to occur next time - under their watch ;-)

My solution is simple and it’s called a Wall Street Financial Institutions Transactions Tax. Obama should levy a 20% WSFITT applying to all transactions by Wall Street firms - and to be held in trust for next time. If they fail again then this WSFITT levy will be used to bail out Main Street and keep Americans employed. And if the big firms don't like paying the tax then they can move to Mexico or Guatemala or somewhere else and create chaos in that economy.

Or something similar - but don't ask me - Paul Krugman is the man with the answers.