Bernie Sanders Doesn’t Know Diddly-Squat About Wall Street →
A: yes he does. And B: you can tell this guy is a serious writer because he borrows phrasing from Ned Flanders.
Senator Sanders has gotten a lot of mileage by bashing Wall Street “billionaires.” His call for a “political revolution” usually includes a reference or two to how Wall Street is full of greedy bankers who “drove this economy to its knees” in 2008 and should return the favor of being bailed out by transferring some of their wealth to the struggling American middle class.
And so now I assume you're going to explain why he's wrong?
These are great applause lines, and it’s easy to see why. Since the full extent of the financial crisis began unfolding eight years ago, the general public has come to view bankers as a group of reprobates who, for large fees, packaged up shoddy home mortgages as securities and sold them off around the world as good investments—even when, in many cases, they knew full well that they were not. The fact that the Department of Justice let the wrongdoers off scot-free has only exacerbated this ire.
Is the general public incorrect in these beliefs? Did the banksters not actually do all that?
(spoiler alert: Yes, they did.)
Sanders is right that Wall Street still needs reform. The Dodd-Frank regulations fail to measure up; Wall Street lobbyists and $1000-an-hour attorneys work away each day to gut the meager reforms signed into law by President Barack Obama in July 2010. It is also unconscionable that Wall Street’s compensation system continues to reward bankers, traders, and executives to take big risks with other people’s money in hopes of getting big year-end bonuses. Thanks to this system, which has been prevalent since the 1970s, when Wall Street transformed itself from a bunch of undercapitalized private partnerships (where those partners had serious capital at risk every day) to a group of behemoth public companies (where the risk is borne by creditors and shareholders while the rewards go to the employees), Wall Street has become ground zero for one financial crisis after another.So. . . Sanders is right? So he does know at least Diddly if not squat about Wall Street?
But Sanders never talks about the compensation system on Wall Street. In fact, he rarely mentions anything concrete at all. Instead, he dwells on bizarre and nebulous notions such as imposing “a tax on Wall Street speculation,” as he did during his speech on Monday night.How is a tax on Wall Street speculation "bizarre?" And do you even know what the word "nebulous" means?
It took me about a minute on Google to find this:
Washington, D.C. – A broad coalition of nurses, students, religious and civil rights groups, environmentalists, labor and housing advocates today enthusiastically welcomed plans by Sen. Bernie Sanders to introduce two new Senate bills Tuesday that would impose a small fee on Wall Street speculation to pay for college education for all and other critical community needs.
Both bills set a nominal tax – 50 cents on every $100 of stock trades on stock sales, and lesser amounts on transactions involving bonds, derivatives, and other financial instruments.
How is that not a "concrete" proposal?
It spells out exactly what he proposes to do, a 50 cent tax on every $100 worth of stock trades. I'm sorry if that's confusing for you, but I don't think anyone else finds it "nebulous."
But what exactly is Sanders proposing and does it make any sense?Um, we already covered that and, um, yes.
The answer to the first question is: it is difficult to tell. The candidate’s website does not really flesh out the idea, other than to say that the tax “will reduce risky and unproductive high-speed trading and other forms of Wall Street speculation.” If one goes back to a bill that Sanders introduced in the Senate last May, there is slightly more meat on these bones; still, the proposed legislation seems to have very little to do with actually taxing “Wall Street speculation” and more to do with taxing every trading transaction—the buying and selling of stocks and bonds and derivatives—that Wall Street and hedge funds engage in.
Yeah. that's speculation.
Everything Wall Street does, if it does it honestly, is speculation.
This, of course, makes no sense whatsoever—why tax the very behavior the system depends upon?
Um, because we need the money? I mean, what's the downside here? Oh, no, Wall Street is being taxed on the very behavior it depends on! Oh, no, whatever will we do if Wall Street gets hit with a one-half of one percent tax on their behavior? How will they survive? And what would we ever do without them? Imagine the horrors of a world without Goldman-Sachs!
Even if Sanders eventually elaborates on his plan more fully, does taxing Wall Street speculation even make any sense? That one is simple: nope,
[italics in original]
Oh, sure, yeah, a one-word answer is totally sufficient. No explanation needed. Why back up your assertion with evidence or statistics or anything?
That one is simple: nope, and it actually reveals the candidate’s ignorance about our banking system. Simply put, Wall Street’s purpose is to re-allocate capital from people who have it (savers) to those who want it (borrowers) and then use it to grow businesses that employ billions of people around the globe and help give them a modicum of wealth that they did not have before.
Well, okay, that may be its purpose but that is not the function it serves. Wall Street is just as likely to be involved in helping Bain Capital-type outfits buy up businesses, strip them for parts, throw the employees out of work and stash the profits in the Caymans than growing businesses and employing billions of people and everyone gets a little bit wealthier and we all live happily ever after.
Ooh, look at me. I'm Wall Street! I'm making everybody rich!!!
One man’s speculation, in other words, is another man’s risk-taking.
It's -- it's the same thing! Speculation and risk-taking are exactly the same thing! It's like saying one man's idiot is another man's imbecile.
Without people willing to take those risks, and having the chance to reap their reward, there wouldn’t be an Apple, a Google, a Facebook, or countless other large corporations. The billions of people around the world who are employed by thriving companies would lose their jobs.
And do you honestly think that, say Steve Wozniak, when he was creating Apple Computer, would have gone to Wall Street looking for investors and they would have said "Sorry Mr. Wozniak, but if we invest money in your company, we might have to pay a one-half of one percent tax on the transaction, and even though this looks like a million dollar idea you've got there, well, we just can't afford to take that kind of hit. In fact, we're mainly in the business these days of stuffing cash under mattresses!"
I don't know why right-wing corporate apologists always expect people to believe that if the "job creators" are taxed at all on their enormous income they will simply close down shop and stop making money at all. Like someone is offered an executive position with a seven-figure salary and says "sounds great! Oh, wait. I'm going to have to pay taxes on that income? No thanks, I'll just go be poor and live in a box somewhere." Or that if Wall Street firms have to pay a tiny tax on the one thing that they do to make money, they're just going to say "fuck this, I'm closing the brokerage and getting my old band back together. We'll play for spare change in the subway and we'll never make enough money to have to pay taxes. Hahahahaha! Take that, United States government! I win again!"
But sure, it's Bernie Sanders who doesn't know diddly about Wall Street.