Blameworthy

Larry Kudlow looks at the winners and losers from the newly announced "banker's tax" and discovers that the losers are the winners and the winners are the losers: Obama Rewards Losers, Punishes Winners

Who's being rewarded? Obama's bank-tax penalty is being used to finance the failed government takeovers of GM, GMAC, and Fannie and Freddie. And let's not forget the $75 billion failure of the so-called foreclosure loan-modification program. To this day, no one knows where that money went. But the big banks are going to be forced to finance this through a tax that will damage lending, stockholders, and consumers.

This is sheer political favoritism. Crony capitalism at its worst, with a sub-theme of bailing out Obama's Big Labor political allies. It's just like his bailout of the unions by exempting them from the so-called Cadillac insurance tax until 2018, all while the rest of us may have to suffer under that tax.

Speaking of political unfairness and favoritism, mortgage giants Fannie and Freddie will not pay a nickel of this tax. These government-sponsored enterprises were at the very center of the financial maelstrom, financing the government's quotas and targets for unaffordable mortgages.

Think about this for a second. President Obama is out there bashing away at excessive bonuses. And yet Fannie and Freddie's CEOs stand to make $6 million in the next year or two. Huh? These are big-government-owned bureaucrats. They ought to be paid like GS-18s.

Linking the bank tax to TARP might create good optics - the public hated TARP, even if Obama couldn't have voted for it fast enough. And Obama's rhetoric - "we want our money back!" is suitably butch. (Hey, hot shot why did you vote to give it away in the first place?) This is about as naked a "redistribution" of wealth as you can imagine, yet it's redistribution of $$ from one set of pot of money to another to no good effect for the economy or the voters. And, as long as they can repeat the incantation "Greedy bankers! Bush deregulation!" they can probably get away with it.

We are used to thinking of government spending and waste (but I repeat myself) as being the province of the Pentagon, NASA, and other big ticket enterprises. But the US spends more of its money on liberal initiatives like Fannie/Freddie while the public discourse focuses on relatively penny-ante matters like AIG bonuses and "trillion dollar wars." We really are doomed.