I guess we shouldn’t celebrate President Obama’s back-bench status at the G20 Summit. As further proof that he’s leading from behind, look no further than the latest Wall Street Journal editorial. The leader of the free world is now under pressure from the Europeans to impose on us a “transaction tax,” and it’s quite likely that he’ll go for it.
Enter Barack Obama. The U.S. government is desperate for revenue to pay for Mr. Obama’s spending sprees. But the President faces a Republican-controlled House of Representatives that is highly resistant to raising taxes amid a weak recovery and a looming election.
For Mr. Obama, a tax that putatively falls on speculators, traders and bankers ticks a lot of short-term political boxes. It throws a bone to the Occupy Wall Street crowd by dinging the financiers. It brings in (on paper) a decent amount of money, thanks to the huge volumes traded in some markets. It would give the President another opportunity to claim that his opponents across the aisle were favoring Wall Street greed over Main Street need.And by banding together with the Europeans, Mr. Obama would claim that this tax wouldn’t merely drive jobs, businesses and tax revenues from Chicago, Boston and New York to London.
Read the whole thing to find out why this is a really bad idea. Unfortunately, the president is less concerned about the US economy than he is about ginning up the base.