By now, you’ve probably heard all about the “Let Wall Street Pay for the Restoration of Main Street Act of 2009,” a trading tax of 0.25% on all trades you make in a given year, with the first $100K exempt (and as most of us know, to hit that level, you don’t have to be a fatcat, just a middle class investor or day trader — e.g., you could buy/sell $10K worth of stock 10 times). It’s not likely to go anywhere, so we mostly just ignored it until Jim Cramer got some panties in bunches by coming out as, well, at least not vehemently against it:
“Look, I take an unpopular stance, but you know I think the deficit’s bad and someone has to do something,” the 54-year-old former hedge fund manager told CNBC host Erin Burnett on Tuesday. “If it comes down on us we probably. . . deserve it.”
This, of course, inspired a full round of “I didn’t do it” as individual traders threw fits at the idea of being lumped by Cramer into a ‘royal we’ of sorts:
The cable TV star’s support for the so-called “trader tax” outraged Wall Street and Cramer followers, who argued that they weren’t responsible for the financial meltdown.
“I don’t see why if banks made bad loans and created all these problems why I have to pay for this rescue,” one trader told The Post.
“I don’t know exactly who ‘we’ might be but individual traders who make a living in the market sure did nothing to deserve it,” wrote one Florida-based investment manager and contributor to Cramer’s Web site, The-Street.com.
Cramer did respond, pretty much saying he’d back any tax that would help create jobs, a nice idea in theory, but one that requires you to believe giving the government more money to spend is actually going to create jobs, and I think a lot of people are having problems with that piece of logic right now:
I repeat, I am not so stupid as to want taxes to cut into profits.
However, for those who are not willing to sacrifice in order to create employment in this country, I say to you that you do not recognize what goes wrong if we don’t get employment going in this country.
For those of you who say that I stabbed you in the back by saying that I could live with this tax, let me remind you of something: I can live with any tax IF it helps create jobs.
Traders are of course more likely to say it’s going to erode small profit margins than it is to generate any kind of real economic growth. And, as we said, the general wisdom is that it isn’t going to go anywhere in Congress. But it got some press because it fits into that “Hit Wall Street to help Main Street” paradigm, and then Cramer opened his mouth, so I figured might as well write about it.
And besides, it gives me an excuse to use this picture of a cute kid on the floor of the NYSE, yanked from today’s WSJ/photos of the week. She’s probably charting support/resistance levels for $XOM or something too, we just know it.