As World Oil Prices Shoot Up, It’s Time To Hit Banks With A Super Levy To Cushion The Impact

February 25, 2011

Dan Majestic writes from Washington: As the world oil prices go through the roof, supposedly pushed up by concerns about the instability spreading throughout the Middle East and North Africa, but in reality inflated by speculators, politicians across the world are expressing their concerns that this may undermine the economic recovery. They shake their heads and sigh, as if there is nothing anyone can do about it. Speculators are showing two fingers to the world, making a quick buck on other people’s sorrow, while governments pretend they have no means at their disposal of helping out millions of struggling people and businesses that are hit by growing fuel prices. That’s what the free market is all about, politicians say, the creeps. Free competition and all that.

But there is a very obvious way of solving the current oil crisis, and it is staring governments right in their faces. Yes, it is time to force the big banks, bailed out by the taxpayers, to chip in and help to cushion the effect of outrageously high oil prices. Western governments should introduce an emergency rolling levy on big banks, with immediate effect, to cap the level of prices on fuel until the situation in the Middle East and beyond is resolved. It has to be a substantial levy, and when the banks start screaming and shouting that it would kill them, they should be told to go and, you know, f..k themselves.

The motto ‘we’re all in this together’ that Western governments used so cunningly when they introduced austerity budgets needs to work both ways. It can’t just be a one-way street thing, helping banks to stay afloat and not getting anything in return. It needs to work for the little people as well. Especially as banks have been so blatantly abusing the trust of millions, paying themselves huge bonuses for their incompetence. (Wall Street alone paid itself something like $90 billion in bonuses for last year’s performance.)

Now, the moment they hear about the emergency measure, banks will start blackmailing their respective governments, threatening them with another financial crash and predicting that ‘experienced staff’ would move to other countries where the pay is higher. But no one should pay any attention to that. The next crash is coming anyway, caused by the money men continuing to blow vast amounts on risky operations and hiding their true liabilities – so there is no point in getting all wound up about it. And as for staff fleeing to better pastures – good riddance I say. There’ll be no problem in finding replacements for them, as it’s no big deal to be a banker. There is simply too much hype around banking, but once you get down to the basics, you find there is nothing special about it.

And let me tell you another thing about banks: a lot of their so-called ‘investment deals’ are actually loans to finance oil and other commodity contracts. Yes, big banks themselves operate as speculators, funding oil deals and making a lot of money on them. They may be reluctant to lend money to real businesses, but they sure as hell jump at the chance of getting their nasty fingers into big oil contracts. So they might as well be forced to help overcome the current oil crisis.

So, once the emergency super-tax is introduced and the banks are forced to start paying, central banks can release their funds immediately, securing a temporary cap on fuel prices until the situation in the Middle East improves. And that would allow hundreds of thousands of businesses to survive and millions of people to be saved from some serious financial trouble.

And that is how it should be under proper capitalism. Not the pseudo-capitalism that banks and financial markets have invented for themselves – with the politicians’ blessing.

– End –

Category: Angry Rants · No Comments »
Tags: big banks, Oil prices, rolling levy