[P2P-F] Fwd: fyi

Wed Nov 2 16:04:21 CET 2011

---------- Forwarded message ----------
From: David Bollier <david at bollier.org>
Date: Wed, Nov 2, 2011 at 9:32 PM
Subject: Fwd: fyi
To: michel at p2pfoundation.net

The Wall Street Journal

OPINION
NOVEMBER 2, 2011

Time For a Tax on Speculation
Even a small levy could help curb the destructive wheeling and dealing
on Wall Street and raise hundreds of billions in revenue.
By RALPH NADER

As protesters have refused to yield in their "occupations" of public
places, they have gained momentum and support throughout the country.
Yet for Congress it has been business as usual. Elected representatives
there have virtually ignored the outrage expressed by protesters on Wall
Street and across the country. But the message will keep coming until
Congress finally demonstrates that it is listening. A good start would
be a tax on financial speculation.

Just two years after the height of the financial crisis, The Wall Street
Journal reported that the top 25 firms on Wall Street paid out a total
of $135 billion in compensation in 2010, providing an average
compensation of $141,000 per employee. Meanwhile, 25 million Americans
are unemployed or underemployed. Wages have remained stagnant, and
median household income is down 7% from 2000, while the largest
corporations and executives have seen record profits and bonuses year
after year.

The protesters know these economic realities all too well. Not so those
in corporate boardrooms and in Congress, who are insulated by the
bubbles in which they live.

The politicians—Republicans and Democrats alike—who continue to ignore
the will of the people may face a rocky campaign season. A recent
Reuters/Ipsos poll revealed that 82% of respondents were familiar with
the Occupy Wall Street movement and an NBC/Wall Street Journal poll
showed that Americans supported the protests by a 2-to-1 ratio (37% for
and 18% against). Meanwhile, a Pew Research Center poll in early October
found that nearly half of Americans couldn't name even a single
Republican presidential candidate. These numbers should be giving
corporate plutocrats a scare.

The prospect of a financial-speculation sales tax already is worrying
them. In late September, the U.S. Chamber of Commerce, Financial
Services Forum and Business Roundtable, organizations that represent the
interests of the most powerful corporations and financial-services
companies in the world, wrote Treasury Secretary Timothy Geithner to
express their opposition to such a tax. They spoke for the 1% they
represent, not the 99% whom Occupy Wall Street aims to elevate and who
have to pay a 5%-8% sales tax on the necessities of life.

Occupiers throughout the country are pushing elected officials to break
the corporate stranglehold on our economy. Both Rep. Peter DeFazio (D.,
Ore.) and Sen. Tom Harkin (D., Iowa) have proposed legislation in the
past that would enact a 0.25% tax on the value of stock, bond and
derivatives transactions.

But that is far too small. National Nurses United and other progressive
groups believe that we would be better served by a rate of 0.5%. This
could help curb the wheeling and dealing on Wall Street and raise
hundreds of billions of dollars in revenue to help with our country's
economic recovery. According to estimates from a 2009 Center for
Economic and Policy Research paper, a small tax perhaps ranging from
one-half to one-hundredth of a percent, depending upon which financial
product is taxed, could reap $350 billion.

This tax offers another significant benefit: It has the potential to
curb risky speculative trading that contributes little real economic
value. The Capital Institute's John Fullerton has stated that a
financial speculation tax could have a significant impact on the
high-frequency trading and other "quant" trading strategies that now
comprise an astonishing 70% of vastly bloated equity-trading volume.
Over the past few decades, trading volume has grown exponentially. In
1995 the total shares of stock traded on the Nasdaq and the NYSE, not
including derivatives and other options, was 188 billion. By the peak of
the financial crisis, in 2008, this annual number had skyrocketed to
three trillion.
Critics argue that this tax would be borne by ordinary investors,
retirement funds or mutual funds. But these arguments fall flat when one
considers the enormity of speculative trading that occurs in the stock
market. Sen. Harkin, Rep. DeFazio and others in the past few years have
proposed protecting ordinary investors from the direct effects of the
tax by providing exemptions for mutual funds, retirement funds and for
the first $100,000 in trades made annually by an individual.

On Nov. 3, the National Nurses United will rally in Washington, D.C., in
front of the U.S. Treasury where they will call on Treasury Secretary
Geithner and President Obama to listen to the voices of the 99%—instead
of the hundreds of millions of dollars the 1% spend every year on
lobbyists and campaign contributions—and support a financial speculation
tax. This movement has made it clear that they aren't going away quietly
and they want their voices heard.

Already, German Chancellor Angela Merkel and French President Nicolas
Sarkozy are pressing for a euro-zone financial transaction tax. The
passage of such a tax would be a great start for our representatives in
Congress to show that they've heard the message. But those who have not
heard it—those at the helm of the Wall Street banks, in the corporate
board rooms, and those in Congress who are representing corporate
interests instead of those of their constituents—they are right to look
at the growing discontent across the country with some unease.

Mr. Nader is a consumer advocate and the author of "Only the Super-Rich
Can Save Us!" (Seven Stories Press, 2009).

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