Leading Liberal Economist Endorses DeFazio’s Wall Street Transpo Tax

Few liberal-leaning economists have a higher profile in Washington than Dean Baker, co-director of the Center for Economic and Policy Research. His critiques of the Obama administration's Wall Street bailout as a glorified taxpayer subsidy have made Baker a must-read -- as is his latest column for the Guardian.

Its headline is "Banks own the US government," but Baker's real thesis is transportation-related: Rep. Pete DeFazio's (D-OR) proposed 0.02 percent tax on oil speculation is an affordable, sensible way to rein in Wall Street while paying our infrastructure bills.

I'll let Baker's words take us out for the holiday weekend. Enjoy the Fourth, everyone ...

This tax can best be thought of as a tax on gambling. Gambling is heavily taxed in every state that allows it. DeFazio's [plan] is effectively a tax on gambling in the oil markets. It will not stop it, but it would discourage it, and in the process raise a huge amount of money that could go to productive purposes.

... [I]t is important that people know about the DeFazio bill. First, DeFazio deserves a place on the honour roll for standing up to Wall Street.

Also, it is important for the public to know that there is a relatively low-cost way to make up the shortfall in the highway trust fund. When Congress raises some other tax and/or cuts a useful programme, people should know that there was a better alternative. It just didn't happen because, as we know, the banks own the place.