When Simon Nixon published this statement in a recent WSJ piece, his words spread like wildfire through the blogosphere:

A windfall tax is blunt, arbitrary and something supporters of free markets usually instinctively avoid. Even so, following news that Goldman Sachs Group has already set aside a $16.7 billion bonus pool for 2009, the case for windfall taxes on banks that pay giant bonuses is becoming unanswerable.

This year’s bank profits are windfalls in the purest sense. They aren’t the due rewards for exceptional skill but gifts from taxpayers. Many banks are earning huge, risk-free profits borrowing from central banks at ultralow interest rates and lending back to governments at much-higher rates. If this giant, hidden subsidy was being used to support new lending, fair enough. Instead, it looks destined for bankers’ pockets.

Now hear MSNBC’s Dylan Ratigan make the case with a few distinguished guests:

When Goldman Chief Executive Lloyd Blankfein claimed (as quoted in the Times of London) he was doing “God’s work,” we should take him at his word. After all, if GS wants to serve a higher social purpose through profits, then a windfall profits tax will do exactly that.

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