Banks must contribute
Gordon Robinson, Contributor
In Dominoes and in life, sometimes we have to give to get. One Saturday afternoon, playing against Dr S. Blank (senior lecturer in the faculty of domino) and Jimmy Hunchback (the worst yet luckiest domino player in the world), Gene Autry posed double six. Blank played six-three. Without thinking clearly (six-blank, right, Gene?) and not wanting to cut my partner's pose, I played three-five, my only trey and only five. In a flash, the game was over, and Blank, who held four fives, including six-five and double-five, was bowing his dominoes shouting repeatedly, "Heineken!"
As it turned out, Autry held only one more six and three treys. "You haffi learn fi look card, bwoy!" Blank chortled. He'd essayed his only trey in the hope that three-five would materialise, thus setting up his hand. I should've been alerted by my meagre holding in fives; left Blank to wallow in his own deceit; cut Autry's pose; and left the trey end open. Instead, I fell, hook, line and sinker, for Blank's misdirection.
Now Barack Obama has been forced, by weight of public opinion, to propose a special tax on 'big' banks which were the subject of taxpayer bailouts; are now reporting super profits; and paying huge executive bonuses. Of course, he can only propose as, in the United States, the nation's political executive can't impose any tax via rubber-stamp Parliament or TV broadcast. In America, legislation of any kind can only be passed by two independent Houses of Parliament, constitutionally and physically separated not only from each other, but also from the nation's executive.
And this is only done after fulsome public debate in which every citizen has an input. No member of the American Cabinet is present in either House of Parliament banging on desks and throwing gratuitous insults across the aisle while the people's representatives are doing their work. This is called civilisation. The rationale to be given to the House and Senate (where the vice-president sits as an honorary chairman without a vote except a casting vote) by the US Cabinet (led by President Obama) is that these banks would have collapsed but for taxpayer support; an unprecedented number of American taxpayers are now out of work; and the banks have recovered sufficiently to pay massive end-of-year bonuses to top level executives.
Banks getting off free
In Jamaica, where we still embrace 'one-don' governance by edict on TV or in a sham Parliament where incivility and totalitarianism trump good governance every time, there remain banks, "too big to fail", which were bailed out by taxpayers not so long ago and are now reporting large profits. The bailout of these banks was a significant contributor to our current fiscal disaster. Yet Driva has dismissed any suggestion of a special levy on these banks without debate, discussion or input from the out-of-work Jamaicans whose hard-earned tax dollars rescued the banks.
For its financial year ending Septem-ber 30, 2009, National Commercial Bank (NCB) reported a net profit of $10,248,000,000, up 18 per cent on the previous year. During that same period, Jamaica recorded negative growth, thanks to a crippling fiscal deficit substantially brought about by the 1990s rescue of NCB. It seems only logical that a special levy on that net profit ought to result in at least 50 per cent being returned to the people who made it possible in the first place. And, despite loud protestations, all signs point to next year being even better as, in the last quarter alone, NCB's net profits grew 50 per cent over the previous year. As an involuntary contributor, where's my share?
I believe we should have allowed floundering banks to wallow in their own banking deceptions rather than opting to resurrect them. Had we taken that tough decision, perhaps, somehow, funds would have been found (repatriated?) to ward off madding crowds, thus making current profits legally and morally theirs.
But, what's done is done, and so we are where we are with a huge hole in our national budget. Before we consider imposing $22 billion of new taxes on the same taxpayers who bailed out NCB, et al; before we collude with the margin-gatherers to default on (oops, sorry, 'restructure') our local debt to further burden the taxpayer (allowing banks to retain their margins and gain the flexibility to make higher-volume loans to the private sector at even greater margins); why not claim some of what is morally ours? Why not ask banks to contribute directly, instead of as agents?
In life, when you get, sometimes you also have to give.
Peace and love.
Gordon Robinson is an attorney-at-law. Feedback may be sent to firstname.lastname@example.org.