Austan Goolsbee Goes On Attack Against Banks on CNBC

Austan Goolsbee, a trusted Obama advisor, went on CNBC at lunchtime today.  He attacked the banks straight on, saying that they are profiting from the government's actions in saving them last year, and that while the government has been made whole on its investment, it has never been properly paid for the guarantees that it provided.  Goolsbee furthered that the Dodd plan should be passed to make sure that "too big to fail" never happens again and stated that a special tax should be imposed on the banks to compensate the government for the guarantees.

It is now clear that President Obama, buoyed by his recent successes, is going to try to raise capital by exacting a special tax on the banks.  Moreover, the Democrats are going to play the populist game by portraying the Republicans as promoting the banks to the detriment of the greater good in this election year (vs. the Democrats who are focused on try to fix Main Street's economy).

Banks have had an amazing run and it may continue, but it isn't going to be a straight run up.  Over the next several months they are clearly going to come straight into midterm election crosscurrents.