Taxing the Banks

So we ought to tax bank profits because . . . GM is losing money just like everyone said it would.

I am all for regulation which prevents banks from taking on too much leverage–or encouraging others to do so by offering stupid loans. I would very much like to find a system of financial regulation which results in a financial structure that isn’t so utterly dominant (and bloated) as it has been for the last two decades. But I’m failing to see why the banks in particular–or rather the customers of the banks who will enjoy higher fees and lower interest rates–ought to bear the financial cost of the Administration’s ill-advised bailout of the UAW.

via Taxing the Banks – Megan McArdle.

The reason seems obvious to me. The Democratic Party is utterly dependent upon union support, so unions will get favorable treatment – even if most Americans get screwed in the process. Special interest politics will never go away until the size and scope of government is drastically reduced.

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