WASHINGTON (3/20/14)--Al Lewis, who writes columns for The Wall Street Journal Sunday and MarketWatch, is watching big banks' reaction to Rep. Dave Camp's (R-Mich.) draft proposal for tax code reforms and does not seem amused.
He calls attention to the fact that "America's too-big-to-fail banks are freaking out over one Republican lawmaker proposing a tiny tax" increase for those biggest banks. They are "freaking out," Lewis points out, despite their long and inglorious recent past of accepting "unfathomable billions" in taxpayer-funded bailouts, and more.
The increase Lewis refers to is a proposed 0.035% quarterly tax on bank assets, which would apply only to bank assets in excess of $500 billion. (Editor's note: Total assets for all federally insured credit unions in the U.S. reached $1 trillion just in June 2012, according to National Credit Union Administration call report data.)
So what have big banks gotten from the government since the Fall and fallout of 2008, in addition to "unfathomable billions" worth of bailouts? Lewis calculates:
"The Federal Reserve also responded by buying trillions of dollars in illiquid mortgage-backed securities and government bonds from these institutions. This has ratcheted up the Fed's balance sheet from $869 billion in August 2007 to more than $4.1 trillion today ...
"Additionally, the Fed lowered interest rates to zero, and it has held them there for more than five years, giving these banks unprecedented access to free capital.
"Yes, zero interest rates would severely punish a whole generation of retirees and savers who didn't want to risk it all in Wall Street's casino. But the idea was that these banks would find ways to stimulate the economy. They would be so grateful to a helpful nation for saving them that they'd make loans to small-business owners who would in turn create jobs."
But that just didn't happen, Lewis notes. Bankers instead, he writes, "raised every fee they possibly could on their customers, they improperly foreclosed on millions of Americans' homes, they continually dodged prosecution for their alleged criminal activity, they fought Congress on just about every sensible idea lawmakers had for reforming a broken and corrupt banking system, and then they gave themselves bonuses."