Treasury Nominee Jack Lew Needs to Get Behind the Robin Hood Tax
Advocates for American communities still reeling from the 2008 financial collapse are calling upon the Senate Finance Committee this week to press Treasury Secretary nominee Jack Lew for commitments to hold Wall Street accountable.. One way to do that is to get his pledge of support for the Inclusive Prosperity Act, a bill introduced by Rep. Keith Ellison (D-MN), which embodies the Robin Hood Tax —a small sales tax on Wall Street speculative activity that would raise up to $350 billion a year and start to turn around our hurting communities.
Lew, who is White House Chief of Staff, worked on Wall Street during the period of the collapse as an executive at Citigroup. The U.S. government guaranteed $300 billion in bad Citibank assets, invoking “too-big-to-fail.” For that amount of money, reported Columbia Journalism Review, “the government could have owned Citigroup outright.” Later, the government loaned Citigroup $200 billion at near zero interest, which was lent back to the government at 3.7 percent interest, “effectively handing Citigroup $7.4 billion a year for nothing,” noted the Review. “Citigroup has paid no federal income taxes for the last four years after receiving a total of $2.5 trillion in financial assistance from the Federal Reserve during the financial crisis,” wrote Sen. Bernie Sanders last week.
Other Wall Street institutions have also done very well since the collapse. Just last week there were new revelations about Wall Street’s mortgage scams leading to the 2008 collapse. According to court documents and as reported in the New York Times, mega-bank JPMorgan Chase knew of “defective” loans, “altered” them and then “whitewashed” reviews. “Such investments eventually collapsed, spreading losses across the financial system,” report The Times. JPMorgan Chase profited from the scheme and continues to do so: the bank’s 2012 profit was its highest on record.
Down the street at Goldman Sachs, the wheels of financial commerce keep churning. The investment bank paid a multi-million fine for its role in the mortgage sleight of hand, but that was after having received billions in government assistance. Last year Goldman’s profit was $5.6 billion, and it “handed CEO Lloyd Blankfein and his top lieutenants a total of $65 million in restricted stock…,” reported Bill Moyers. Goldman profit totaled $26 billion in the last three years.
All told, more than $700 billion in taxpayer money went to bail out banks. But that’s the least of it. According to an audit carried out by the Federal Reserve, $26 trillion additional sums were loaned, granted or guaranteed by the U.S. government, bringing the total bailout to close to an astronomic $27 trillion.
Jack Lew is well aware of these events. To serve this country well and honestly as Treasury Secretary, he must acknowledge the wholesale transfer of trillions of dollars to Wall Street and get behind the Robin Hood Tax, a way to start to provide a real recovery to the many communities still hurting.
Signs of collapse are everywhere. Nearly one in four children in the U.S. suffered from food insecurity sometime during the last year. Official poverty is approaching 50 million Americans. More than 22 million adult Americans do not have full-time jobs. A three-year decline in longevity for older, pre-retirement Americans was reported this month as a result of unemployment, poverty and lack of access to healthcare.
The goal of the Robin Hood Tax is to stop these declines and to build a real economy. The Robin Hood tax supports the creation of jobs at living wages, retirement for all with dignity, quality education and healthcare, attention to the environment and rebuilding of infrastructure. The tax would also be directed to international commitments in research and treatment of HIV/AIDS and for climate control.
Let them know: Jack Lew, and the Senate Finance Committee before whom he appears on Wednesday, need to support the Robin Hood Tax and put that revenue to use to heal Main Street.