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Entries tagged "wall street"

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Emerging Economies Join G20 Coalition to Tax Speculation

November 4, 2011 ·

Talk about piling on. Bill Gates, the Pope, Michael Moore, the Archbishop of Canterbury, 1,000 parliamentarians, 1,000 economists, the world's major labor leaders, Occupy Wall Street protesters, Oxfam and other major development groups, thousands of nurses, the World Wildlife Fund and other major enviros…It might be easier to list who didn't come out didn't come out in support of a Wall Street tax in the lead-up to this week's G20 summit in Cannes.

At an action this week, Robin Hood visited G-20 leaders. Photo and action by Oxfam International.The outcome? No home run, but some measurable steps forward.

No one expected a G20-wide agreement on taxing financial transactions at this summit. Despite rising support, opposition from the United Kingdom, Canada, and the United States, among others, is still just too strong. But there were high hopes that a subset of European and non-European G20 countries would launch a "coalition of the willing" in support of the tax.

This goal was achieved. In his concluding press conference, summit host French President Nicolas Sarkozy announced that South Africa, Brazil, and Argentina were joining the list of current supporters, including France, Germany, Spain, the European Commission, and several other European governments. Sarkozy said he hopes to move towards implementation in early 2012.

Sarkozy and German Chancellor Angela Merkel have been the strongest supporters of taxing financial transactions for nearly two years. A few months ago, the European Commission also reversed its earlier opposition and released proposed legislation for such a tax in the European Union. But while Europe appears likely to move forward, the addition of several emerging market countries to the supporter list is significant for several reasons:

  • The increased revenue that can be generated.
  • The reduced potential for tax avoidance.
  • The enhanced chances that revenue won't just be plowed into European bank bailouts, but instead spent on human needs in both the global North and South.
  • The strengthened legitimacy through the backing of rising powers in the Global South.

For U.S. advocates, there was another modest victory. Over the past two years, Treasury Secretary Timothy Geithner has made no secret of his aversion to the tax. In September, Geithner angered some of his European counterparts by objecting to proposals to raise funds to address their deficit problems through an EU-wide tax on financial transactions.

In Cannes, the Obama position shifted from active blocking to friendly neutrality.

"The president made clear that he shares the objectives that Chancellor Merkel and President Sarkozy have in ensuring that the financial sector contributes an appropriate share to the resolution of crises," said Michael Froman, the White House's G20 point person. "I think there is broad consensus between the Europeans that the president met with this morning and ourselves about the ability of each to pursue this in their own way, whatever way they see to be most effective."

The final communiqué of the G20 leaders was a disappointment, however.

The only relevant line in it is a typical diplomatic non-statement: "We acknowledge the initiatives in some of our countries to tax the financial sector for various purposes including a financial transaction tax inter alia to support development."

But with the likelihood of a critical mass of countries coordinating taxes on financial speculation, this kind of mumbo jumbo may disappear in the coming years. Once other governments start generating massive revenues by taxing speculation, even the most closed-minded economic advisers in this country may see the issue anew.

Sarah Anderson directs the Global Economy Project at the Institute for Policy Studies.

The 99 Percent Have Found Our Voice

November 4, 2011 ·

Could any of us have imagined that in six short weeks, the people of this country would have found our voice? Most of you reading this have likely participated in Occupy activities in your town or city. IPS board member Barbara Ehrenreich worked with IPS interns to create a massive list of phone numbers of mayors of Occupied towns. They came up with over 400 places where people are standing up to be heard.

Doctors for the 99 Percent march from Zuccotti Park to St. Vincent's Hospital to demand its reopening and health care for all. Photo by Sunset Parkerpix.These are days of action. I've just returned with a group of IPS colleagues from the U.S. Treasury Department where National Nurses United led thousands of us in a protest for a measure that IPS has been advocating for years: a Wall Street tax that would curb financial speculation and generate tens of billions of dollars that can be used to create jobs and help the environment. Tomorrow night, IPS and the Other 98% and thousands more will march from Occupy DC to protest a gala dinner backed by the Koch brothers

On Saturday, tens of thousands will join in a "move your money" day that uses our power to defund Wall Street banks and build up Main Street banks. And, on Sunday, thousands more will create a human chain to surround the White House to demand an end to an oil pipeline that would despoil land and water from Western Canada to the Gulf of Mexico. 

The 99 percent have found our voice and at IPS we are devoting every ounce of our energy to filling this new public space with the true picture of the obscene inequality that our corporations and U.S. policy have created over the past three decades. We have a team at IPS, led by Chuck Collins, that is both putting out daily facts and figures on inequality and is steering people toward creative action. Chuck himself is now working on a book to trace the gap between the 99 percent and the 1 percent (help us decide on a title for the new book).

And, working with allies at YES! Magazine and elsewhere, we have built up a New Economy Working Group that is illuminating the path from this failed Wall Street economy to a green Main Street economy – an economy that is ecology balanced, that eliminates extreme inequality, and that nurtures the democratic expression that is blossoming across this country. IPS is producing fact sheets, leading workshops at Occupy sites, sending op-eds to papers all over the country, and giving voice to the rising tide of moral outrage.

The Occupy outpouring is changing the entire debate in this country. Newspapers are reporting on inequality. Politicians are being forced to respond to the charge that their policies lavish favor on the 1 percent. Banks are canceling outrageous fees on consumers. Conservative officials in Ohio and Wisconsin are feeling more heat to maintain protections on workers and communities. As we change the national conversation, we can dismantle the barriers to change.

This is your moment and IPS is proud to walk down this path with you. Sign up to receive our Unconventional Newsletter every two weeks.

All Money Trails Lead to Wall Street

October 25, 2011 ·

Federal Reserve data shows that mortgage and consumer interest charges eat up around 15 percent of the average household income. Photo by  wwarby.How much of our income goes to Wall Street? Anthropologist David Graeber, a specialist in the study of debt, recently set out to find out how much of an average American income ends up “appropriated” by the financial industry “in the form of interest payments, fees, penalties, and service charges.”

Graebner would quickly find that no government agency is actually compiling all that exact information. But mortgage and consumer interest charges alone, he discovered from Federal Reserve data, are eating up 15 to 17 percent of average household income, and that figure doesn’t include either student loans or “penalty fees” on bank and credit card accounts.

Overall, Graebner estimates, at least one dollar of every five Americans earn is “now likely to end up in Wall Street’s coffers in one way or another.” That’s substantially more than average Americans pay in federal income tax. Maybe we need some “tax reform” on all the levies Wall Street imposes on us.

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New Report Exposes Wall Street Lobby Against CEO Pay Reform

July 21, 2011 ·

Remember the big Wall Street showdown? Thought that ended a year ago, when President Barack Obama signed the Dodd-Frank financial reform legislation? Think again.  Wall Street lobbyists don’t give up so easily.

What Congress voted on was a broad outline for reform. Now that the law is moving through the rulemaking process, armies of financial industry lobbyists are working to water down every line.

In a report released today, Public Citizen analyzes the assault on one particular rule, a provision designed to discourage the reckless behavior that got us into the crisis. Specifically, Section 956 of Dodd-Frank requires large financial institutions to report their incentive-based pay arrangements to federal agencies and prohibits pay formulas that “encourage excessive risk.”

Dodd-Frank mandated changes on how CEO compensation is disclosed, but the Wall Street lobby is not giving up its desire for secrecy. Photo by Office of Speaker Nancy Pelosi.

Like the other compensation reforms in Dodd-Frank, this is pretty modest.  No rigid pay ceilings, no bonus bans, no meaningful cap on the tax deductibility of exec pay.

And yet, according to Public Citizen’s analysis, 30 financial industry groups have weighed in on the proposed rule. In a fine display of lobbyist creativity, they have come up with every conceivable argument to justify exemptions for their firms or certain executives within their firms.

For example, Nationwide Mutual Insurance Company asked for a pass because it is an insurance company -- even though it happens to own a bank that has nearly $4 billion in assets, well above the $1 billion threshold for inclusion.

They also trotted out the argument that if regulators have the power to prohibit pay that encourages excessive risk it will make it hard to recruit top talent (oh yeah, like the talented bunch that got us into this mess).

Public Citizen tallied up how much these firms have spent on their efforts to defend their freedom from CEO pay and other financial reforms: $242.2 million since the beginning of 2010. They have also donated $15.6 million to federal political campaigns in the 2010 cycle.

This week Treasury Secretary Timothy Geithner wrote in the Wall Street Journal that he would urge the president to veto any legislation to repeal Dodd-Frank provisions. That’s encouraging.  But it likely means the lobby will re-double their efforts to influence the rule-making process, where the action tends to happen out of the spotlight – unless groups like Public Citizen bring it out into the open.

U.S. Nurses Bring Global Call to Tax Speculators to Wall Street

June 22, 2011 ·

Nurses from across the United States rallied on Wall Street today, calling on the financial industry to pay their fair share of the costs of the economic crisis. 

Coming from the frontlines of the suffering, the nurses had some gut-wrenching stories to tell. Sandy Falwell, who has worked in an intensive care neonatal unit for 20-plus years, told one of the most painful: After a woman gave birth to a 2-pound baby, the woman told Falwell that she blamed herself for her baby’s premature birth. During her pregnancy she had been unable to afford insulin treatments for her diabetes — in part because she was taking care of her elderly parents.

Nurses rally for a financial transaction tax. Photo by Marlee Blasenheim.How does the nurses union that spearheaded the rally propose to raise the funds necessary to cover the costs of such urgent needs? National Nurses United Executive Director Rose Ann DeMoro explained:  “There’s a financial transaction fee that we’re going to have Wall Street pay. They have paid it here in the past. It’s very American. These yo-yos who buy and sell and buy and sell our country should have to pay a tax on that.”

The way such taxes work is they place a small fee on each trade of stocks, derivatives, foreign exchange, and other financial instruments, with the goal of raising massive revenues while also discouraging reckless speculation.

As DeMoro mentioned, the United States had a transactions tax from 1914 to 1966, which levied a 0.20 percent tax on all sales or transfers of stock. In 1932, Congress more than doubled the tax to help financial recovery and job creation during the Great Depression.

The Wall Street rally was part of a global day of action on financial transactions taxes involving more than 35 countries. The actions were timed for the eve of a meeting of leaders of European Union nations, where the debate over such taxes is much further along than in the United States. There are high hopes that Europe will implement them in the near future, which would give a big boost to U.S. advocates.

Here are a few highlights from other countries, where many of the campaigns have taken on a “Robin Hood” theme:

  • In Berlin, Robin Hoods rolled giant Euro coins down the street to Chancellor Angela Merkel’s residence, where someone who looked an awful lot like her (except with a head four times as large as a normal human) received the money as she prepared to depart for the European Council meeting.
  • In Lebanon, the League of Independent Activists did a direct action on the Central Bank, opening a banner in English and Arabic that states: "Big Day for a Tiny Tax," before delivering a statement to government officials.
  • In Brussels, activists met the Belgian Prime Minister Yves Leterme, who assured them that his government will support a Europe-wide transaction tax.
  • In Nepal, activists met their Deputy Prime Minister and Finance Minister and delivered a lobby letter before taking their message to different historical sites in Kathmandu.
  • In Norway, a casino/stock exchange installation was set up alongside a “Robin Hood forest” in the center of Oslo.
  • In New Zealand, activists with 350.org and Oxfam did an action at a shopping mall, resulting in this not-to-be-missed short video of a break-dancing Robin Hood. 

For more on these actions and continued coverage of the global day of action, click here.

Karen Higgins, a co-president of National Nurses United, told the crowd on Wall Street, “Around the world, we’re calling for a more fair and just economy. The finance tax we’re talking about comes from the trillions of trade of stocks and bonds sold here every day. The revenue is badly needed in our communities.”

The nurses union was joined on the street by a long list of other unions and organizations, including the Amalgamated Transit Union, Vocal NY, AFSCME, UNITE HERE Local 100, Community Voices Heard, Transport Workers Union Local 100, United Steam Workers, and PSC-CUNY.

A big theme of the day was that the New York rally was just the beginning of what they're hoping to be a growing movement. Minnesota nurse Jean Ross, clearly angered by the role of the financial industry in creating the current crisis, said, “Wall Street should be happy that we’re just talking about a financial transaction tax. We could be talking about restitution.”

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