Wall Street's irresponsible bankers caused this economic crisis. It's only fair that they pay to clean up their mess

The deficit hawk crew, famous for missing the $8tn housing bubble that wrecked the economy, is now on the warpath, pressing the case for a big, new, national sales tax. They claim that the United States badly needs additional revenue to address projected budget shortfalls.

While we may need additional revenue at some point, it makes far more sense to impose a financial transactions tax, which would primarily hit the Wall Street banks that gave us this disaster, than to tax the consumption of ordinary working families. We can raise large amounts of money by taxing the speculation of the Wall Street high-flyers while barely affecting the sort of financial dealings that most of us do in our daily lives.

The logic of a financial transactions tax is simple. It would impose a modest fee on trades of stocks, futures, credit default swaps and other financial instruments. For example, the UK puts a 0.25% tax on the sale or purchase of shares of stock. This has very little impact on people who buy stock with the intent of holding it for a long period of time.

We are rapidly returning to the uncivilized Law of the Jungle. We will soon live in a world where brute force rules. It is not only the disabled, widows, children and orphans who are vulnerable to the cruelties of this jungle. We all are. We have been brainwashed with incessant slogans like "Get the government off your back," and "Keep more of your own money... oppose all tax increases." Our dominant, false ideology tells us that every function of government must be privatized, so that governmental functions can be performed with business-like efficiency. (We are not told that the real reason for privatizing is to give capitalists yet another opportunity for making short term profit.) The very concept that we humans might work and cooperate together to protect ourselves from Jungle dangers and to meet our common needs is shunned as "socialism," as if that were something evil. The capitalists have brainwashed themselves, and they have brainwashed us. They along with the rest of us hope and assume that the common good will somehow automatically take care of itself, if they think about the common good at all. Each capitalist must be concerned only with his own private profit and cannot be concerned with the common good lest some competitor captures his profit making opportunity. We are a nation of millions of brainwashed individualists, living, working, and acting under false perceptions of reality as if we were all "Manchurian Candidates." We have forgotten that government is the only effective institution that we have to protect us from the brute force of the Law of the Jungle. If we do not very quickly awaken from our trance, and act together in a cooperative human community, millions of us will perish.

Ironically, most wealthy capitalists will themselves be destroyed in this looming Jungle.

The Obama administration promised to reform the financial system and make it safe for the rest of us, but recent Congressional action is more likely to reset the fuse for another explosive calamity. The time bomb in this case is that arcane financial instrument known as derivatives--the hedging devices that the big banks sell to investors, corporations and other banks to reduce risk or evade the requirements to hold adequate capital on their books.

As the financial meltdown demonstrated, derivatives do not reduce risk. They amplify it and spread it around interlocking networks of unwitting investors. That house of cards collapsed worldwide a year ago. It would be tragic to let the bankers build a new one. Some reformers think all but the simplest, most visible forms of derivatives should be prohibited by law. The president prefers instead to regulate them. Derivatives, his advisers explained, would be less dangerous if they were traded openly in financial markets, just like stocks and bonds. Regulators could then put the brakes on dangerous excess if they saw it developing. Anyway, that was the theory.

But the "reform" legislation approved by the House Financial Services Committee on October 15 is a fiesta of exemptions, exceptions and twisted legalese that effectively defeat the original purpose. Only experts can divine the actual meaning of the bill's densely worded provisions, and many of them have reacted with disgust. The "entanglements of derivatives exposures" among oversize banks "is the equivalent of the San Andreas Fault of our financial system," veteran financier Robert Johnson testified at an October 7 hearing on the draft bill. If Congress does not disarm derivatives, he warned, it could lead to another cascade of failure that would give regulators no choice but once again to rush to the rescue of the banks dubbed "too big to fail."

In the official record of the historic House debate on overhauling health care, the speeches of many lawmakers echo with similarities. Often, that was no accident.

Statements by more than a dozen lawmakers were ghostwritten, in whole or in part, by Washington lobbyists working for Genentech, one of the world's largest biotechnology companies.

E-mail messages obtained by The New York Times show that the lobbyists drafted one statement for Democrats and another for Republicans.

The lobbyists, employed by Genentech and by two Washington law firms, were remarkably successful in getting the statements printed in the Congressional Record under the names of different members of Congress.

Genentech, a subsidiary of the Swiss drug giant Roche, estimates that 42 House members picked up some of its talking points - 22 Republicans and 20 Democrats, an unusual bipartisan coup for lobbyists.

In an interview, Representative Bill Pascrell Jr., Democrat of New Jersey, said: "I regret that the language was the same. I did not know it was." He said he got his statement from his staff and "did not know where they got the information from."

US President Barack Obama came under fire Saturday from Asia-Pacific leaders for backsliding on free trade at a regional summit devoted to driving the world economy out of crisis.

"President Obama is facing severe political constraints that run counter to free trade," Mexican President Felipe Calderon said, complaining about US foot-dragging on full implementation of the NAFTA pact for North America.

"The cruel paradox is that within a global economy, what really kills companies is inefficiency and lack of competition. Therefore protectionism is killing North American companies," he said in a speech in Singapore.

"So I think this has to do with the fact that the US government is under strong political pressure that really is not being counteracted from the political perspective" of the Obama administration.

The US Congress has turned even more sour on free trade after the worst economic crisis since World War II. One landmark pact with South Korea is languishing and critics say the White House has done little to revive it.