| The politics of punishment are tricky. Take the | | | | burgeoning balance sheets. Even as President Obama |
| playground, for example. The boy in the striped shirt | | | | defends the necessity of the bailout in the first place, |
| not only pushed your child out of the way at the top | | | | he has criticized the banking industry for proposing |
| of the slide, but also gives your child a good kick for | | | | nearly record-breaking bonuses. According to the |
| his efforts when he reaches the bottom. You can | | | | Associated Press, "Six of the biggest U.S. banks are |
| comfort your own child, but you can't truly punish the | | | | on track to pay $150 billion in total executive |
| boy in the striped shirt; he is a stranger. You can | | | | compensation for 2009, slightly less than the record |
| hope that his parents have a vigilant eye on the | | | | $164 billion in 2007 before the financial crisis struck, |
| playground and will step in and say something, but | | | | according to the New York state comptroller's |
| that doesn't always happen. | | | | office." |
| It's even trickier to punish adults who are acting | | | | The President is strongly suggesting that banks pay |
| within legal parameters, if not moral ones. President | | | | the fee out of the bonus pool, rather than find ways |
| Obama would like to create a tax to punish banks | | | | to pass the cost of the fee down to the customer. |
| for effectively taking the bailout money and running. | | | | However, it is more likely that banks will keep the |
| He is calling it a fee, but the proposal is actually for a | | | | bonuses and find ways around the tax. Some of |
| 0.15 percent tax on the liabilities of large financial | | | | those solutions could involve risky loans, which is |
| institutions. The tax only applies to companies with | | | | what started this whole mess in the first place. |
| assets of more than $50 billion, a rather intimate | | | | While the President is insisting that Congress will pass |
| group of about 50. (Reuters) | | | | the proposed bank tax, it is hardly a foregone |
| The tax is proposed to last 10 years and estimated | | | | conclusion. Republicans, not to mention the financial |
| to generate about 90 billion for the government, the | | | | industry, is opposing it. And just what will the bankers |
| majority of that from the ten largest banks. The | | | | spend all those billions in bonus money on? According |
| question is who will really be paying? In all likelihood | | | | to CNNMoney, at the top of the list is real estate. |
| the banks will use creative accounting to sidestep the | | | | Bank execs will spend money on swanky New York |
| tax, as well as share the pain with bank customers in | | | | apartments and European vacation homes. Also on |
| higher fees and tighter rules. | | | | the banking bonus wish list is private school tuition, |
| The idea behind the tax is that the Obama | | | | expensive vacations, boats, cars and Botox. Yes, |
| administration hopes this fee will give banks and | | | | Botox. Apparently big time bankers need to look |
| other companies an incentive to whittle down | | | | wrinkle-free to stay competitive. |