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Friday, 14 December 2012 06:28

Where's Robin Hood? Media Ignore Wall Street Tax

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If the rhetoric about the so-called "fiscal cliff" is to believed, the United States is faced with monumental budget problems--short-term deficits and a long-term debt crisis.

Though there are good reasons to question those assumptions (Dean Baker, Guardian, 12/3/12; Paul Krugman, New York Times, 12/6/12), the consensus in the elite press is that these are indeed serious concerns, and that the solution to them must include cutting government spending and increasing revenue.

But one way to do the latter is mostly left out of the conversation: A small tax on financial transactions--otherwise known as a "speculation tax" or a Robin Hood tax.

The idea has been discussed among activists and economists, especially since the financial crash. Such a tax could raise between $170-$350 billion annually, according to the Center for Economic & Policy Research (CEPR) and the Political Economy Research Institute (12/21/09). An analysis of the bill written by Rep. Peter DeFazio of Oregon and Iowa Sen. Tom Harkin found it could generate a more modest $353 billion over 10 years. Aside from the revenue argument, proponents argue that it could serve as a check on some of the riskier forms of high-frequency, high-volume trading.

So where is the Robin Hood tax in the media discussion about increasing revenues? Almost nowhere, it turns out. Since the 2012 election, the concept has received a handful of passing mentions. It appeared just once in the New York Times (11/28/12)--only because several ACT UP activists staged a protest in House speaker John Boehner's office, chanting "End AIDS with a Robin Hood Tax." The Times explained that as "ostensibly a tax on the rich for AIDS research and treatment." The financial tax was mentioned in passing by the Washington Post (11/8/12) because Rep. DeFazio was targeted by a New York hedge fund manager's super PAC.

The tax has come up twice on MSNBC's Up with Chris Hayes ( 11/17/12, 12/9/12), and once on CNN (12/1/12). It does not appear to have been discussed on any of the broadcast networks.

The most extensive discussion came on the Washington Post's op-ed page, in a December 2 column by veteran activist Ralph Nader, who wrote that "both sides are unwilling to consider a minuscule tax on financial transactions that could be a major source of income."

If "both sides" are ignoring the idea, the same is certainly true for the nation's press. But this hasn't always been the case. As CEPR noted (11/12), several major papers like the Boston Globe, the New York Times and USA Today have voiced editorial support for the tax idea in recent years, as have columnists like the Times' Nicholas Kristof. The amount of potential revenue, Nader pointed out, makes a transaction tax a more attractive option than other fiscal proposals that receive significantly more coverage.

One thing is certain: It is decidedly unpopular among the "Fix the Debt" CEOs who many in the press consider important voices in the discussion of the nation's finances--and are the people who bankroll political careers. So it's understandable that politicians aren't eager to talk about this. What's the media's excuse?