GOP votes for another recession

by: Michael Marsh

Sat Dec 12, 2009 at 08:27:33 AM EST
(Michael Marsh knows a great deal about financial issues, tax policy and similar subjects. He makes this stuff understandable, and was a wonderful resource and asset to the state during his time as a representative. - promoted by Jennifer Daler)

This week the U.S. House passed a landmark bill that gives the government the power to better regulate the banking and financial industries. (Remember them- the guys who brought us this wonderful recession?) The bill includes meaningful consumer protection provisions,  creates controls on the derivatives market (the thingies that got Bear Stearns, Lehman and AIG in such deep doo-doo in 2008) and gives the government the power to wind down too-big-to-fail banking firms whose collapse could destroy the entire financial system (this was a power we lacked last year when AIG was in such big trouble).
 
The legislation puts a cap on executive compensation, creates a regulatory structure to control systemic risk, and deals with the lack of transparency and honesty in credit-ratings agencies (an underlying cause for the derivatives debacle).  One long overdue provision changes the tax code so income that hedge fund managers make will be treated as personal income rather than as capital gains. This means  that hedge fund manager John  Paulson, who earned $5.7 billion in fees in 2007/2008 without risking a dime of his own money will have to pay the same tax rate you and I pay on our income, rather than a flat 20%. If this had been in place, he would have paid about a billion-with-a-B dollars more in taxes these last two years.

While this legislation is clearly a case of locking the barn door after the horses have left, it will finally give the government the power to rein in Wall Street, something they gave up over the past 8 years. Hopefully this will prevent  financial sector led recessions like we are currently experiencing from happening again.

Without question, this bill is a victory for common sense, the middle class, families who are struggling, and Main Street.

I am proud that our representatives, Carol Shea-Porter and Paul Hodes, voted for the bill. Needless to say, but I'll say it any way: the bill did not receive a single vote from a single GOP member of Congress. Not one. I can't explain why. My guess is they hate the President more than they hate a recession, and the mere fact that the President is for this bill is sufficient cause to oppose it.
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