It’s important to take a hard look at the numerous causes of the crisis. There’s no question that bankers made big mistakes in overleveraging and borrowing to buy and sell various mortgage-related securities and other complex derivatives. They know it. That’s why they fessed up, almost semi-groveling, at the hearing yesterday. But the big boys have paid down their TARP, and they’ve turned a tidy taxpayer profit in the process.
So, is it possible that we can put an end to this obsessive national attack on bankers? Ultimately, the bankers will play a key part in the economic-recovery solution. Al Qaeda is our enemy. Not the bankers.
Now take a look at the following chart. It looks more complicated than it really is. What it shows is job losses during all the post-WWII recessions, two years after the jobs peak.
You’ll see that all the post-war cycles had employment rising by now. But, as this chart clearly shows, it’s still falling. That’s the issue for America right now.
Will someone please explain to me how raising taxes on banks — or anybody else for that matter: rich people, capital gains, whatever — will make the jobs line go up instead of down? Someone please explain to me how we’re going to tax our way out of this jobs decline?
Bank taxes? What a terrible idea. Raising personal income taxes, health-care related taxes, capital-gains taxes? All terrible ideas. It’s totally nuts. These tax hikes are not going to create jobs here in America, they will take jobs away.
And as far as the financial crisis is concerned, I’m still waiting for the commission to investigate the critical role the Greenspan & Bernanke Fed played in creating the bubble that led to the meltdown. As Stanford economist John Taylor has said numerous times on the show, the Fed held rates down too low for too long. Moreover, we must also explore the role government policy played in mandating unaffordable mortgages and then financing them through Fannie Mae and Freddie Mac.