Obama: Wall Street, it’s not me, it’s you. And it’s time we broke up.

So the administration has decided it’s time to tax the banks. Why do you tax banks? Well, because that’s where the money is (with apologies to Willie Sutton, though that quote is probably apocryphal). Oh, and because you want to create the maximum amount of bureaucracy and overhead when it comes to taking money out of everyone’s pockets, because even though these are levies that are going to be assessed on the banks, there cannot be any doubt in anyone’s mind that they will be passed on to consumers via some manner or another.

Grab a pitchfork:

The president, who said his resolve in recouping taxpayer funds has been stiffened by reports of “obscene bonuses,” formally unveiled his plan for a new tax on large financial firms. The tax, which the White House calls a “Financial Crisis Responsibility Fee,” is expected to raise $117 billion over about 12 years, and $90 billion over the next 10 years. Around 60% of the revenue will come from the 10 largest financial firms.

The White House plan, which excludes small banks and auto makers that accepted funds from the government’s Troubled Asset Relief Program, reflects lingering public anger toward Wall Street and mounting unease over the billions in bonuses that financial firms are expected to dole out this year.

Bailed-out automakers are excluded for the obvious reason that they would need to actually be making profits for something like this to work.  Non-banks that have financial divisions, such as $GE, are not excluded, because they possibly have a profitable business model.

The administration is confident that the banks will bend over and take it:

Banks that “try to pass the cost on will do so at the peril of losing market share and hurting their competitiveness.”

(Uh huh. Banks that don’t try to pass the cost on will lose shareholders…)

More specifics:

If approved by lawmakers, the fee would go into effect June 30 and last at least 10 years. It would amount to 0.15% of total assets minus high-quality capital, such as common stock, and disclosed and retained earnings. Federal Deposit Insurance Corp.-covered deposits and insurance-policy reserves would be untaxed because such assets are already subject to federal fees, according to the White House. The tax would hit around 50 banks, insurance companies and large broker-dealers. Of those, about 35 would be U.S. companies and 10 to 15 would be U.S. subsidiaries of foreign financial firms.

In other words, it encourages banks to hold safe assets and not take risks (also known as leverage). And, yes, none of us really want a replay of the 40:1 leverage that was the equivalent of a trader walking into a casino, but last I checked, Goldman’s ratio of assets to capital was 15:1, and the Federal Reserve’s is 43:1, soooooo….. yeah. You know, we give the TARPbanks a LOT of crap around here, but to be honest, they have been paying the government back with interest for the most part. And when you’ve given them a lot of money to play with and an implicit backstop of all of its actions, you really can’t get all mad when they make money. I mean, if you don’t want them to make money, you should’ve just nationalized them in the first place and been done with it, unless you really don’t know what the hell you want and you’re just imposing some kind of tax because you think it will make your constituency feel better.

Memo to Obama: This isn’t making your constituency feel better, and on the off chance this nonsense does get passed, it will be passed on to consumers, and most people aren’t bright enough to figure out they can move their savings to a community bank  to avoid giving The Bandit $30 a month for their basic checking account. If you want to make your constituency feel better, why don’t you intervene in the Leno v. Conan late-night debacle? Because that is, regrettably, where the zeitgeist seems to be right now.

Pitchforking the banksters was, well, so 2009.