The Obama Bank Fees Should be Levied on the Bonuses after Payment

The Obama Bank Fees are yet another strategy to redirect blame to institutions and away from the managers of those institutions who are responsible for the financial crisis.

President Obama said that those who oppose this fee are audacious to think that it is unfair.

Obama Questions the ‘Audacity’ of Those Who Say the Bank Fee Is Unfair

Well I for one think it is grossly unfair.

The Banks are not people and did not cause the crash. The management teams running them did bad things, took great risks and are fully accountable and responsible for the financial crash.

Not only did they destroy their own banks, they destroyed the shareholders – the rightful owners of the banks and destroyed many lives across the world who had nothing to do with them.

When you applied for a loan was it the bank that rejected it or was it the bank manager?

They need to be held accountable, NOT the institution itself…..

This is the usual way that the government avoids having to prosecutes its mates or its campaign contributors.

Let’s just walk through this……

The management send the bank broke with unbelievable risk taking practices.

The government aids and abets in this process.

The bank managers lose billions of dollars.

The bank managers lose billions is share value.

The government gives the bank managers billions of tax payer dollars to rebuild the broken banking institutions.

The bank managers use that money to create algorithmic stock trading systems and make billions gambling in stocks.

The balance of the money the bank managers fails to lend out is deposited with the FED.

For the first time in history the FED pays the banking institutions interest on their deposits.

The bank managers believe they have “earned this money and it forms part of their bonus calculation.

These bank deposits with the FED are the deposits consisting of tax-payer bailout money and Bernanke Helicopter money.

This is the money the bank managers are supposed to lend out.

Using their windfall profits from using tax-payer and Bernanke helicopter stake money the bank managers pay back the Government with interest.

Then the managers pay themselves massive bonuses and think that it is nobodies business but their own because they have paid back the government.

Well it is. It is the world’s business because these bank managers destroyed millions of peoples wealth all over the world.

The President saw an opportunity to be populist and act against the grotesque bonuses. But instead of prosecuting the bank managers for the wealth destruction he decides to charge a fee for “pain and suffering” which he levies on the banks themselves – NOT the managers who inflicted the pain.

Punishing an institution, and the share holders and bond holders for the sins of the bank managers is totally wrong.

The Fee should be levied on the managers after they have announced their bonuses. They must be forced to present the bonuses to be paid before the fee is levied.

If anyone thinks the Fee is going to affect the bonuses they have to be joking. The bonuses will almost certainly be paid on the profit BEFORE the President’s Fee.

I’m sure there will be some managers who did not do the wrong thing and are innocent of  involvement in the financial crisis. I’m sorry about that but nothing is fair.

If it was, then millions of innocent workers would not have lost their jobs. Millions of innocent citizens would not have lost their homes. small business would not have gone bankrupt. I cannot imagine what it might be like for people in the poorer countries at this time who might well be starving due to the bad behaviour of the bank managers.

A Bank Fee levied on the banks and not the bank managers is an easy option as it does not hurt any individual directly. No behaviour is likely to be modified.

Punish the bank managers NOT the bank. The bank is innocent.

Take money from the managers, NOT the shareholders and other investors. That’s the hard thing to do. Doing it will do far more to curb risk-taking than trying to set up regulations to catch the bank managers out next time.

Making regulations to protect against what happened is useless. The bank managers will find new ways to take unprecedented risks which will not covered by new regulations aimed at stopping their old tricks.

Prison terms and confiscation of unearned and undeserved assets is the only thing that will modify management risk taking behaviour.

Do the hard thing Mr President.

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