In September of 2008 the New York Federal Reserve gave the U.S. insurer American International Group (AIG) an $85 billion loan as part of the bailout of Wall Street. The NY Fed told AIG to pay big banks in full the $62 billion AIG owed for credit default swaps. In addition, the NY Fed told AIG not to tell the public how much they owed or who they were paying off. The government bailout of AIG has been increased three times since then and now totals more than $180 billion.
The corporate-owned mainstream media has been crowing about the ‘success of the bank bailout as the biggest banks have repaid their Troubled Asset Relief Program (TARP) funds. But little mention is made of how these same big banks that have repaid their TARP moneys got this secret bailout via AIG.
Current Secretary of the Treasury Timothy Geithner was president of the New York Federal Reserve when AIG and big banks were given the secret bailout. The editors of Fight Back! say that Geithner should resign, or be removed from the post of Treasury Secretary.
The federal government should also have tax on financial transactions. A small tax of one-half of one percent or less could raise more than $100 billion a year. Representative Peter DeFazio (Democrat-Oregon) has recently reintroduced a bill to tax financial transactions. Unfortunately, many Democratic representatives who are in bed with Wall Street have opposed this, calling it a “huge new tax burden.” In fact, a financial transactions tax could crimp the profits of big Wall Street firms and big banks, but since they helped create the economic crisis, why shouldn't they pay?
Working people are facing higher state and local taxes and severe service cuts, while the official unemployment rate is still above 10% nationally. People are now paying five or even ten percent sales taxes on the goods that they buy, why shouldn’t there be a small tax on the financial assets that Wall Street sells? This money could be used to cover the costs of the bank bailout and be spent by the government to create jobs.