The Solution

     If you owe someone $10,000, he’s got you where he wants you, the saying goes, but if you owe him $10 million, you’ve got him where you want him.
     What if you’ve got 68,000 soldiers in a foreign country, and you’re thinking about sending over another 40,000? Who’s got who then?
     I hate to pick on President Obama for the problems he’s inherited; I especially hate to do it because of the vicious and insane attacks to which an increasingly neofascist Republican Party is subjecting him.
     But the Democratic Party’s response to the two great problems facing our country – the wars and the economy – has been, as usual, lily-livered and incompetent.
     Let’s punt the war in Afghanistan. There will be no victory there.
     Never in human history has there been a real victory – by which I mean a good outcome – for people who make war in a distant land that belongs to someone else. Temporary, apparent victories – the British Empire, for example, or the Soviet Union – are sustained only by incessant brutalities that become unacceptable and intolerable as they become known.
     And they always become known.
     So let’s consider the economy.
     There is a simple solution for that, and the fact that the Democrats have not proposed it, even in whispers, indicates either that the party is wholly corrupt and gutless – which is probable – or that the powers arrayed against it are greater than most of us can possibly believe – which also is probable.
     The problem, we all know, is that crooks in the financial industry sucked the economy dry, and rather than revive the real economy, the Bush administration, and then the Obama administration lavished $4.6 trillion on banks and insurers.
     And the banks are using it to enrich themselves while refusing to return any of it to the real economy – to people who make things and provide services.
     Well, the answer is obvious. We should make the bankers pay it back. There are two simple ways to do this.
     One would be to increase taxes on the investment banks: not the good banks – the lenders – just on the money jugglers.
     The top corporate tax rate today is around 35 percent; it was higher than 80 percent under Eisenhower. Ike was no communist, and we were prosperous then. If we split the difference, and jack up the tax rate on banks and everyone else who makes money from money, instead of making real things with money, that would give us a corporate tax rate of 55.5 percent – but only for money-juggling financial institutions, not for corporations that make real stuff. The taxes would return to 35 percent once the banks have paid off their $4.5 trillion.
     Democrats haven’t suggested anything remotely like this because they’re cowards.
     A better solution would be a tiny transaction charge on stock trades – let’s say a tenth of a penny per share traded – but only on shares that the trader has held for less than a year.
     This would not hurt anyone, and would not cost real investors even that tenth of a cent. Investors buy stocks and hold them – like Warren Buffett. Traders flip stocks and suck money from them. In fact, the giant hedge funds and investment banks that trade in blocs of millions of shares at a time manipulate the market every time they do it.
     It is mathematically certain that if you put 1 million shares of a stock on the market, its price will decline. And it’s just as certain that if you buy 1 million shares, its price will rise. We know that volume traders have computer programs that enrich them by letting them trade milliseconds ahead of the customers they pretend to be serving. The volume traders know just as surely that every time they buy or sell a million or more shares in a company, the price will move. And they know which way it will move.
     You cannot buy or sell a million shares at a time without manipulating the market. Call it Heisenberg’s Certainty Principle.
     Five billion shares of stock were traded on the New York Stock Exchange on Wednesday. Let’s say, conservatively, that half of them were shares that had been held for less than a year. At a tenth of a penny a share, that would be $2.5 million paid back to the government each trading day, or $650 million a year. At that rate, it would take the financial industry only 7,000 years to pay us back.
     So it would make more sense to tax the investment banks and hedge funds 0.1 percent of the price of each share they trade that they haven’t held for a year. At an average price per share of about $30 – the price a good old stock like Walgreens usually trades at – it would take the banks only 233 years to pay us back.
     Then their tax rates could return to what they are today.
     This proposal is fair. It would cost only the crooks who got us into this mess, and it wouldn’t cost them much. The banks and hedge funds are taking far more than $650 million a year out of the economy with their obscene bonuses. Goldman Sachs alone is expected to ladle out $20 billion in bonuses this year – 31 years worth of that pathetic one-tenth of a cent transaction tax.
     And we go along like pathetic sheep without so much as baaing about it.
     How about it, Democrats? Are you good for anything at all?

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