Government Hits Banks with Fees

From the Journal:

The Obama administration is aiming to hit banks with a fee to recoup losses associated with the government’s bailout of financial firms and the auto industry, administration officials say.

The White House hopes the fee will soothe the public’s anger at financial firms. Most big banks that received public funds have repaid the government, but the industry is seen by many as having survived thanks to taxpayer support, and is now enjoying a profit rebound as the economy struggles. This month, many large banks will resume paying big bonuses to employees.

I’m not about to defend banks for taking TARP funds, but this is inexcusable. First, the government never should have been in the business of bailing out firms — no losses to occur. Secondly, some of these firms never asked for the funds in the first place; the government simply forced them to take funds.

Finally, the fact that the White House is doing this to “soothe the public’s anger” is extremely disturbing. The government is playing with the rules of the financial industry for political reasons, not sound economics.

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