Bailout Born in Academia?

Some “progressive” economists and writers are urging the Democrats in Congress to take the bailout plan much further by implementing the first phase of a global tax.

James Parrott of the Fiscal Policy Institute says that Washington needs to establish a “new regulatory regime that covers all financial institutions (including hedge funds), controls risk and introduces a tax on financial transactions to help repay U.S. taxpayers for coming to the industry’s rescue.” A tax on financial transactions, which would affect stocks and mutual funds, could be part of a global “Tobin Tax,” named after the late Yale University economist James Tobin, to bring in billions and even trillions of dollars a year to national governments and international institutions such as the United Nations. Such a plan has usually been marketed as a way to diminish “global financial instability.”

Dean Baker of the Center for Economic and Policy Research says that “The government should impose a modest financial transactions tax, comparable to the one in the United Kingdom. This can both restrain excessive trading and raise more than $100 billion a year in revenue.”

One cannot exclude the possibility of such a proposal being slipped into the final legislation. It is being reported that Senator Christopher Dodd, Democratic chairman of the Banking Committee, has been circulating a 44-page version of the bill. But Dodd’s Banking Committee website only has a three-page summary. What is in the rest of the proposal?

The next few days are critical. The American people can stop this rush into socialism, if only the liberal and conservative media start telling the truth about the socialist “new world” into which we are about to enter.

Cliff Kincaid is the Editor of Accuracy in Media, and can be contacted at cliff.kincaid@aim.org. This is an excerpt of one of his columns, which can be read in its entirety here.