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With Labor Market Only Halfway Back, Too Soon for Rate HikeNicole Woo
The Hill, June 15, 2015
CEPR and / June 15, 2015
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Rich People’s Rules and the TPPDean Baker
Truthout, June 15, 2015
Dean Baker / June 15, 2015
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Financial Transactions Taxes and Logic 101 for Fred HiattI've been speaking and writing on financial transactions taxes for close to a quarter century. Most people don't find the concept that difficult to understand, but apparently Fred Hiatt does. In a column bemoaning the sidetracking of Obamanomics, Hiatt tells readers that Obama:
"has a targeted version of the left’s beloved financial transactions tax, too: a levy on the largest banks proportional to the riskiness of their liabilities."
Actually, the bank tax has nothing to do with a financial transactions tax. The bank tax is intended to compensate for the implicit subsidy given to large banks that markets view as too big to fail. Since investors assume that the government will bail the banks out if they get into trouble they are willing to lend to them at a substantially lower interest rate than would otherwise be the case. The tax is intended to offset this subsidy although the size of the tax proposed by Obama is an order of magnitude smaller than size of the implicit subsidy, which the I.M.F. recently estimated at $50 billion a year.
In contrast, a financial transactions tax is intended to reduce the excessive amount of trading in financial markets. While this trading uses economic resources, it contributes nothing to the productive economy. A recent analysis from the Bank of International Settlements found that countries with very large financial sectors, like the United States, experience slower growth. A financial transactions tax would go far toward reducing the amount of excessive trading in the financial sector.
Dean Baker / June 15, 2015
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Protectionist Pact Crashes: House Votes Down Fast-Track AuthorityDean Baker / June 13, 2015
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Don't Let the Fed Halt the RecoveryNicholas Buffie
Real Clear Policy, June 12, 2015
CEPR and / June 12, 2015
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Germany is Bluffing on GreeceMark Weisbrot / June 12, 2015
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Obamacare Has Been Even More Successful Than ExpectedDean Baker
The New York Times, June 11, 2015
Dean Baker / June 11, 2015
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George Will Argues for TPP Because After a Decade We Can Regain Half of the GDP Lost in the First QuarterDean Baker / June 11, 2015
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Setting the Record Straight on the TISA LeakDeborah James / June 10, 2015
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The Latest on TPP: The Folks Who Want to Cut Medicare Want Medicare to Spend MoreDean Baker / June 10, 2015