As bank chief executives testify before Congress' Financial Crisis Inquiry Commission, fresh demands are popping up to probe and tax bankers' compensation.
Wednesday's New York Times has an editorial urging the White House and Congress to not just tax banks to recover $120 billion spent on the financial system bailout, but to also impose "a windfall tax on the huge bonuses that bailed-out bankers plan to pay themselves over the next few weeks." The editorial says a levy on "financial giants" would make the largest banks "somewhat less profitable" and would steer investment and other resources into smaller banks, which the paper believes would be a good thing.
Meanwhile, House Financial Services Committee Chairman Barney Frank (D-Mass.) told the Financial Times he will hold new hearings into executive compensation. "Poor people don't pay each other billions of dollars of bonuses," the populist congressman says. He adds that he favors boosting the income tax rate for anyone earning $500,000 or more, rather than imposing a narrowly drawn tax on bonuses alone as the UK recently did.
And the New York Daily News introduced a novel tactic for soliciting donations to a food charity it runs: Columnist Michael Daly, after penning a scathing column about Goldman Sachs in Tuesday's edition, is stationing himself outside both Goldman's old and new headquarters buildings in Lower Manhattan with boxes to collect food donations from presumably guilty Goldman employees.
The concept of a charity sponsor openly denouncing an institution in an explicit bid for donations from its employees sounds innovative, to say the least. We offer it as yet another signpost of the punching-bag status the financial sector (and Goldman Sachs in particular) has attained in the eyes of the mass media and much of the public.
Tax Them Both [NY Times]
Obama to Announce Fee on 20 Banks to Recoup TARP [Bloomberg News]
US and UK Banks Face Political Heat [FT]
SEC to Name Investigative Chiefs [WSJ]
Bank CEOs See Need For Regulation [CNNMoney]
For Bankers, Saying 'Sorry' Has Its Perils [NY Times]
Botox To Vacations: Where Bankers Spend Their Bonuses [CNNMoney]
Wall St Must Pay "Mad Scientists" Well: Lobbyist [Reuters]