The Responsibility Tax

The White House has spent months imploring banks to lend more money, so will President Obama's new proposal to extract $117 billion from bank capital encourage new bank lending? Welcome to one more installment in Washington's year-long crusade to revive private business by assailing and soaking it, says the Wall Street Journal. President Obama's new "Financial Crisis Responsibility Fee" -- please don't call it a tax -- is being sold as a way to cover expected losses in the Troubled Asset Relief Program. That sounds reasonable, except that the banks designated to pay the fee aren't those responsible for the losses. With the exception of Citigroup, those banks have repaid their TARP money with interest, says the Journal. The real TARP losers -- General Motors, Chrysler and delinquent mortgage borrowers -- are exempt from the new tax. Also exempt are Fannie Mae and Freddie Mac, which operate outside of TARP but also surely did more than any other company to cause the housing boom and bust...read more