In a recent post, I observed that the momentum for systemic reform and coordinated international regulation of the financial sector, pursued through the G20 in the aftermath of the Global Financial Crisis, appeared to have stalled. In that context, it was interesting to read an interview in yesterday’s Financial Review with Dominique Strauss-Kahn, Managing Director of the IMF, where he observed that there was a need for some sort of revenue raising for a fund to draw on for future stabilisation measures.
He didn’t explicitly refer to a Tobin Tax, but I suspect that’s what he had in mind, and it’s something that has popped up higher on the agenda over 2008 and 2009. So it’s worthwhile to point to a comprehensive article by John Langmore in Inside Story on just that measure.
From my point of view, one key advantage of a tax on cross border financial transactions would be its contribution to transparency and thus the ability of states (and others) more easily to grasp what’s occurring in the ‘shadow banking’ sector. Whether or not future bank bailouts are politically feasible is another question entirely. I suspect that might be political suicide in the USA, no matter how dire another financial shock.
And, incidentally, when the Democrats inevitably lose Senate seats in November, it will become more or less impossible for anything of any size to pass the US Congress.
On your last point, I think we could be seeing the start of the process whereby the USA becomes an Argentina-type state, where the rich have it all. The US Senate is a profoundly anti-democratic institution, where the 9 largest states have 50% of the population but 18% of the votes. The Republicans are taking advantage of this and doing all that they can to look after the rich. As far as I can see, there is nothing short of revolution to stop them.
we’ll see, Mark. I very much doubt the big-money types who fund the repubs will stand to see their portfolios go down the tube by letting the American economy go bust.
they were happy to play silly buggers when they knew that the democrats were taking the political heat.
similarly, i strongly suspect a coalition government would have been handing over stimulus funds hand over fist over the past year. Probably a lot more of it would have gone in national party pork.
The keystone idea is in the Tobin tax idea, it is the last serious hope for a start to economic reform of a real rather than neoliberal kind.
For God’s sake let it be, that the dog can finally wag the tail again instead of vice versa, as has occurred since Huntingdale, Friedman, Reaganomics, “thinktanks”, Clinton/Rubin and the final blatant, profligate denouement represented in Bush/ Cheney with its grotesque caricatures; “policies” of brigandage and bloodshed on an epic scale.