Whilst the Great Leader beauty debate continues to divert attention away from policy to every nuance and twist of personality politics, we shouldn’t allow that to overshadow far more fundamental reforms now at last beginning to address the global financial meltdown.   The IMF, no less, the inner sanctum of capitalist orthodoxy, is now proposing not one, but two, taxes on the banks.   One is an annual insurance fee against the risk of future bail-outs, and the other is a financial activities tax, driven by the universal outrage at the vastness of bank profits and colossal bonuses in the last two years when the rest of the economy is in deep recession.

Bully for Obama, for it was his attack on the iniquities of Wall Street that precipitated this holding the banks to account.   But there are still serious downsides to these latest IMF proposals.

An annual insurance fee is no substitute for what is really needed – the separation of  extremely risky and dangerous casino investment banking from needed High Street banking which is the lifeblood of the economy.

No mention is made by the IMF of the actual size of the annual fee, but since it is estimated that the global fall-out from the financial meltdown totalled over £4 trillions, it is highly unlikely that the political-financial nexus that effectively runs the capitalist world will pitch the fee at anything like an adequate level.

The financial activities tax (Fat tax, more likely to be known as Fatcat tax) will be based on the size of the banks and what they pay their staff.   It’s still not what is really needed – a Tobin tax on all financial transactions, which even at an exceedingly modest level of 0.005% would still raise £30bn a year.

But again this Fat tax still doesn’t get to the root of the problem.   Instead of outsize bonuses being taxed, they should be banned.   Not only are they immensely provocative to the rest of society, they are also so enormous as to generate the recklessness and greed that caused the crash in the first place.   Better to surgically remove the cause and stop another crash from occurring at all than merely mitigating the cause but still leaving it rampant.

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