The Harry Reid scandal probably is not going to hurt overall Democratic electoral and legislative positioning that much, if at all. However, new reports of bank profits will. If banks are perceived as fully recovered while the rest of America struggles, it will only further the sense of collusion between Wall Street and Washington, D.C.
whether you defend the Obama administrtion's actions in the financial sector or not, this is a principle that te Obama administration itself seems to realize. I mean, at least sort of recognizes. This is why, bracing for new reports on bank profits, the Obama administration is considering moving up the timetable to impose a tax on the financial sector that will recoup federal losses from the bailout:
The White House is considering a tax on financial institutions to ensure that taxpayers who bailed out banks get paid back, a senior administration official said Monday.
The law that created the $700 billion Troubled Asset Relief Program empowered the president to ask Congress to recoup money if bailouts were not paid back in full.
TARP dictates that the Office of Management and Budget consider such action five years after TARP went into effect in October 2008 to prevent the federal bailout from adding to the deficit.
This tax would affect the entire financial sector, not just those firms that received bailout money. The Obama administration is considering putting the tax into the fiscal year 2011 next year's budget. Any announcement will likely come at the State of the Union speech.
It is a necessary first step, and worth applauding. However, they have to go much further in picking public fights with the financial sector. The Obama administration has to take the lead for the entire Democratic Party is creating a culprit for the current problems the nation faces. That culprit needs to be "the banks," or some other populist term for large financial institutions.
Without a convincing culprit, the people in charge--aka, Democrats--will bear the brunt of the blame for our economic problems. Even though the Bush administration is still less than one year behind us, Republicans do not work as a culprit. People want results quickly. Arguments about how much worse it would have been under Republicans, or about how recoveries take time, are entirely abstract when compared to the real economic conditions people face.
In lieu of a quick recovery, Democrats need to play up the banks and large financial institutions as the roadblock. While that should not be a hard sell--it is, after all, true-- they need to set themselves up as the people who are fighting the banks and the large financial institutions. That is more difficult for an administration that seems entirely averse to picking public fights, and for large segments of a party that actively collude with them. Still, creating jobs (the jobs bill is up next in the Senate after health care) and picking a fight with banks it is the only path to a less than disastrous midterm election for the Democratic Party. This tax is a first step down that path.
It is time to learn to govern out of anger, or else we won't be given another chance to govern at all.
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