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As world leaders head to France for the the G-20 economic summit in Cannes, labor leaders from around the globe will gather nearby to represent the needs of the world’s workers. Among their demands is a Robin Hood tax on banks and financial institutions that would exact a nano-percentage of each financial transaction to the tune of 0.5 percent. (See video.) That’s one half of 1 percent on every bond or derivative traded, stocks sold and a host of other “financial instruments” bought and sold by the very institutions bailed out by the world’s taxpayers.

Also known as a financial speculations tax, or a financial transactions tax, the idea is catching on in the United States through the activism of unions, especially the National Nurses United (NNU), which has been joining with Occupy protesters to support the Robin Hood tax. The idea has already gained significant momentum across the pond, where British activists are using creative means, such as this video, to sell the public on the Robin Hood tax.

Sharan Burrow, general secretary of the International Trade Union Confederation (ITUC), explains it this way:

Banks don’t come with an internal switch that says “Enough! Let’s slow down a little.” Or “Let’s just share this wealth around for the benefit of the community now.”…We need a new political contract. The G-20 leaders’ meeting…is a chance for leaders to set a new direction for their governments and to re-establish a fractured trust with their citizens.

AFL-CIO President Richard Trumka will join union leaders at the Labor Summit in Cannes to call for governments around the world to focus on creating jobs and to raise much-needed revenue from financial speculators via a Robin Hood tax. As the AFL-CIO has stated:

In the U.S., a tiny tax on financial transactions could raise hundreds of billions in revenue that could fund education and create jobs rebuilding our country, while discouraging speculation and encouraging long-term investment. Both Warren Buffett and Pete Peterson have urged Congress to consider a financial speculation tax.

Nurses in Cannes also will lead a press conference at the G-20 calling for governments worldwide to implement a Robin Hood tax.

While the global labor leaders and heads of state convene in France, working people and Occupy activists will gather with the AFL-CIO and members of the NNU at a rally in Washington, D.C., Nov. 3 to demand a Robin Hood tax that will make financial institutions pay their fair share to help put Americans back to work.

For more on the Robin Hood tax, click here.

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This is republished from the AFL-CIO Now blog.

Taking the stage in Lafayette Park across from the White House in front of nearly 1,500 union members and Occupy D.C., supporters, a not-quite  Treasury Secretary Timothy Geithner look-alike vowed “Never, Never, Never” to impose a Robin Hood (or financial speculation) tax on Wall Street.

He then launched into a nearly undecipherable litany of financial jargon, before German Chancellor Angela Merkel, who supports such tax, snatched the microphone away and accused Geithner of spouting “Avant garde financial psychobabble.”

(more…)

If anyone still questioned who owns Washington, the Congressional supercommittee charged with reducing projected deficits by $1.2 trillion seems determined to end any doubts. According to press accounts, both the Republicans and Democrats on the committee support a plan to reduce average Social Security benefits by 3 percent.

While whacking our parents and grandparents with a big cut in Social Security benefits apparently draws bipartisan support, the supercommittee will not even score a plan to tax Wall Street financial speculation. No committee member from either party is prepared to make a simple request to the Joint Tax Committee of Congress that would allow a speculation tax to be one of the items considered in the mix.

It’s hard to know which part of this picture is worse. The plan to cut Social Security benefits at a time when seniors are more dependent than ever on them is incredibly pernicious. The people who would see their benefits cuts under this proposal paid for their benefits contributing to Social Security over their entire working career.

Most retirees have little other than Social Security to support them in their retirement. In large part, this is due to the economic mismanagement of the supercommittee types. If they or their friends, like former Federal Reserve Board Chairman Alan Greenspan, actually had been doing their jobs, we would not have had the huge housing bubble that wrecked the economy. The collapse of this bubble caused most of the wealth that retirees and near retirees had accumulated in their home to disappear, leaving them with nothing other than Social Security to sustain them in retirement. Now, they want to cut Social Security as well.

This particular cut is especially pernicious since it will hit the oldest and poorest beneficiaries hardest. A person who is in their 90s and has been getting benefits for 30 years would see a reduction in benefits of close to 9 percent under the new cost-of-living adjustment formula apparently supported by members of the committee.

The benefit cut is being justified by claiming that the current cost-of-living adjustment exceeds the true rate of inflation. In fact, the Bureau of Labor Statistics index that measures the cost of living of the elderly indicates that the current adjustment understates the rate of inflation experienced by retirees. There should be no doubt, this is a proposal for cutting Social Security benefits; it has nothing to do with making the cost-of-living adjustments accurate.

While the supercommittee has plenty of time to think of ways to make life more miserable for seniors, it won’t even countenance the idea of taxing Wall Street speculation. In spite of the repeated pledges that everything is on the table, taxing Wall Street speculation is absolutely off the table.

In order for a tax bill to be considered by Congress, it must be scored by the Joint Tax Committee (JTC). While many members, including some very senior members from both houses, have requested a score from the JTC of a bill taxing financial speculation, the supercommittee has the JTC completely tied up meeting its requests. By refusing to include a financial speculation tax (FST) in its scoring request, the supercommittee is preventing this idea from even being included in the discussion. (more…)

 By Richard Trumka
President, AFL-CIO

So, $9 million in stock options as a 2009 bonus for Goldman Sachs CEO Lloyd Blankfein is now considered a big concession from Wall Street–a way of recognizing that the rest of the nation isn’t sharing in the Big Bankers’ party. Before we all start applauding, let’s take another look at what’s really happening on Wall Street. Over at Bank of America, a top CEO is raking in $29.9 million. Chairman and CEO Jamie Dimon is getting $17.6 million at JP Morgan Chase. And at Goldman? Bonuses total $16.2 billion.

Concessions? From financial institutions saved by taxpayers in a year when more than 4 million Americans lost their jobs, largely because of the actions of these very institutions? But wait. We’re actually supposed to feel sorry for the pampered financial set–because this year they’re not getting as much in up-front bonus cash as fast as they’d like since the corporate payouts are more often in stock (another concession). So taxpayer-bailed-out corporations like Bank of America and Citigroup are doling out stock shares that employees can sell within months–much sooner than normally allowed–because as the Wall Street Journal tells us:

The new pay culture is squeezing bankers with hefty mortgage payments and private-school tuition bills–and has prompted some companies to find ways to assist cash-squeezed employees.

“I know it sounds ridiculous to Main Street, but it’s a hardship,” says Gary Goldstein, who runs Whitney Group, a financial-services job-search firm in New York.

Meanwhile, these same corporations are spending multi-millions to kill reform of the financial industry. In 2009, JP Morgan Chase spent $6.2 million in lobbying. Bank of America: $3.7 million. Citigroup: $5.6 million Wells Fargo: $2.9 million. Goldman Sachs: $2.8 million.

We’ve got an idea for these Wall Street wreckers: Instead of tucking billions of dollars away in the pockets of a handful of individuals, how about putting that money toward creating jobs–a few billion dollars can go a long way. Just $8.4 billion spent on transit would create 253,539 jobs–and generate untold positive economic reverberations throughout communities starved for dollars to keep them viable. Just $1 billion would fund the Clean Water State Revolving Fund (H.R. 2847) and result in 27,823 jobs. Another $10 billion would rebuild the infrastructure of our nation’s deteriorating schools and create the jobs to do it.

Main Street has helped Wall Street–and it’s time for Wall Street to pay the bill to create jobs and fix the economy it wrecked. From March 15-26, the AFL-CIO and our allies are holding rallies and demonstrations at branches of the Big Six Wall Street banks–Bank of America, Chase, Citigroup, Wachovia-Wells Fargo, Goldman Sachs and Morgan Stanley–across the country. We are telling the banks: Make Wall Street Pay for Creating New Jobs.

So-called ‘green shoots’ and rises in stock prices aren’t going to fix our economy. We will not be out of the recession until we are creating good jobs on a large level. We need 11 million jobs to get out of the hole dug by the recession. And we need to make sure this kind of financial crisis never happens again.

One way Big Bankers can help honestly rather than playing at responsibility is to back a financial speculation tax on securities transactions to curb financial guessing games. A modest financial speculation tax will help curb harmful Wall Street practices–and raise
$100 billion to $300 billion annually to pay for job creation. This would go a long way toward creating the jobs we need, and also would help curb churning, high frequency trading and other speculative activity that harms capital markets. I joined Warren Buffett and other business leaders who came together under the auspices of the Aspen Institute to call on Congress to consider a financial speculation tax because financial companies must not be allowed to go back to business as usual–or worse.

Another way Wall Street could act honorably is to support a strong, independent consumer protection agency that would root out the kinds of abuses that helped lead to the financial crisis and destroy jobs. Harvard Law Professor Elizabeth Warren, who heads up the congressional committee to oversee the Troubled Asset Relief Program (TARP), writes that the financial industry can regain the public trust by supporting such a program.

For years, Wall Street CEOs have thrown away customer trust like so much worthless trash.

Banks and brokers have sold deceptive mortgages for more than a decade. Financial wizards made billions by packaging and repackaging those loans into securities. And federal regulators played the role of lookout at a bank robbery, holding back anyone who tried to stop the massive looting from middle-class families. When they weren’t selling deceptive mortgages, Wall Street invented new credit card tricks and clever overdraft fees.

But as Warren points out and as the big bonus payouts show, there hasn’t been a whole lot of real soul searching among the banking class.

So far, Wall Street CEOs seem determined to stop any kind of watchdog. They seem to think that they can run their businesses forever without our trust. This is a bad calculation.

Hard-working Americans will not be ATMs for Wall Street. That’s why we in the labor movement are working to hold Wall Street, and Congress, accountable for protecting Americans who play by the rules, preventing future bailouts and job losses and laying the foundation for a financial system that promotes stability and long-term economic growth for our nation and for all.

We support President Obama’s proposed tax on the largest financial institutions to recoup the cost of their bailout program. We urge the president and Congress to make financial re-regulation a top priority by:

• Creating an independent new consumer financial protection agency.
• Regulating the shadow capital markets, including hedge funds, private equity and over-the-counter derivatives.
• Reforming corporate governance and executive pay.
• Creating a systemic risk regulator that is fully public and accountable.

But remember when President Obama announced his intention to propose a Financial Crisis Responsibility Fee? That fee would require the largest and most highly leveraged Wall Street firms to pay back taxpayers for the extraordinary assistance provided so the TARP program does not add to the deficit.

Even before the announcement, Big Bankers were squealing like stuck pigs. From Think Progress:

Edward Yingling, president and chief executive, American Bankers Association: “To impose yet another burden on the industry would obviously decrease their ability to lend.”

So it’s not looking real good that Wall Street’s change of heart is more than a wink and a multi-billion-dollar nod. That means it’s up to the president, Congress and the rest of us.