The Tobin Tax Proposal 2 Weeks Later: Still a Bad Idea; The Presidents Cup

I woke up Saturday morning in Blackhawk ready to focus on college football, The Presidents Cup in Harding Park and an afternoon round of golf on The Lakeside Course, where two weeks ago the LPGA held the CVS/pharmacy LPGA Challenge, which was won by Sophie Gustafson. While the morning fog was dense, I knew that the afternoon would yield a beautiful fall San Francisco/Bay Area day in the low ’70s. I brewed a special blend of morning coffee and moved to the Wall Street Journal Online. Within minutes I was greeted by the headline, Democrats Weigh Tax on Financial Transactions, by John D. McKinnon. (WSJ October 10-11, 2009) I had assumed that we had moved on when Lord Turner’s proposal did not get a serious discussion at the G-20 meeting and his own Labour Party did not endorse the idea. Our financial institutions, which are just starting to recover, looked certain to be spared an idea that would have a negative impact on them and certainly on job creation for an industry that has been very hard hit, both in The City and on Wall Street. I had not realized that Congressman Barney Frank, chairman of the House Financial Services Committee, was a supporter of a Tobin Tax. As the Wall Street Journal reported, the idea has significant support from large labor unions, and House Democrats are clearly growing more enamored with the idea.

If this bill advances to the Senate, we can hope that Senator Chuck Schumer, the senior senator from New York and a member of the Senate Finance Committee, will remind his colleagues from around the country, as he has before, how important the financial services industry is to New York’s economy and that a regressive tax will have a very negative impact on the overall region’s economy. I would also hope that Mayor Bloomberg would weigh in on why this type of tax is not what is needed during a recovery.

I finished my first cup of coffee, moved on to my second one and started to watch the early match play from Harding Park. Harding Park opened in 1925 in San Francisco and offers a classic tight design and views of the Pacific Ocean. Unfortunately, as a municipal course it fell on hard times over the years through neglect. Several years ago the city of San Francisco made a commitment to restore the course as a championship venue. Together with Bethpage Black on Long Island and Torrey Pines in San Diego, these are the three best municipal courses in the country and each of them is committed to hosting major professional events. The Presidents Cup is relatively new compared to The Ryder Cup, where the best U.S. golf professionals compete with the best European golf professionals. The Presidents Cup inaugural year was in 1994, and it alternates every two years with The Ryder Cup. The golf professionals that play for The Presidents Cup International squad are all from outside the U.S. and Europe. This year Australia’s Greg Norman is the International team’s captain and the ever-likable Fred Couples is the U.S. captain.

As I write this on Saturday evening, the U.S. team holds a 3-point lead, 12.5 vs. 9.5, as they enter the final day and Sunday’s single matches. The U.S. seems well positioned to win its sixth Presidents Cup. Their record is 5 wins, 1 loss and 1 tie since the tournament began. The next Presidents Cup will take place in Melbourne, Australia in 2 years.

Mary Claire and I will return to New York City this week and I will hold a strategic off-site for Asset International with the theme of “One Company” as we move to expand globally.