Cheeks Precinct Resolution in Support of Rep. DeFazio’s Proposed "H.R. 4191: Let Wall Street Pay for the Restoration of Main Str

At its meeting on March 9, 2010, the Cheeks precinct adopted the following:

Resolution in Support of Rep. DeFazio’s Proposed "H.R. 4191: Let Wall Street Pay for the Restoration of Main Street Act of 2009"

Whereas, U.S. Representative Peter Anthony DeFazio (D-Oregon) has introduced "H.R. 4191: Let Wall Street Pay for the Restoration of Main Street Act of 2009" to impose a small tax on of around one half of one percent on all transactions in U.S. financial markets ("Wall Street") (1), and

Whereas, the dollar volume of trading in U.S. financial markets is now some fifty times larger, as a multiple of Gross Domestic Product, than it was in the 1960s (2); and

Whereas, less than five percent of the dollar volume of trading in U.S. financial markets represents actual activity undertaken to provide funding to real companies providing real services or producing real goods (3); and

Whereas, 95 percent or more of the dollar volume of trading in U.S. financial markets is created be various trading schemes, such as arbitrage, program trading, or high-frequency trading, which would immediately be recognized as “churning” if done to an individual’s account by that individual’s broker (4),

THEREFORE BE IT RESOLVED, that we call upon our elected representatives in the Congress to co-sponsor and support "H.R. 4191: Let Wall Street Pay for the Restoration of Main Street Act of 2009."

REFERENCES

(1) Wikipedias has an excellent overview of H.R. 4191, including arguments against the tax by a number of financial market participants.

(2) See “Financial turnover compared to gross domestic product” on the Wikipedia page on Financialization.

(3) The New Rules Project notes:

In 1970 more than 95 percent of currency trades were for activities linked to what many call the "real economy" -- investment, tourism, foreign aid, trade. Today only two percent are. The volume of currency trading is now some 50 times greater than the volume of trade in goods and services. We trade more than $100 worth of stock and bonds for every dollar raised for investment in new plant and equipent, a ratio almost four times greater than 30 years ago.

(4) See The Benefits of a Financial Transactions Tax (pdf file), by Dean Baker, The Center for Economic and Policy Research, December 2008.