Economy
Related: About this forumRobert Reich: Why Isn’t Everyone In Favor of Taxing Financial Speculation?
http://www.commondreams.org/views/2016/04/19/why-isnt-everyone-favor-taxing-financial-speculationWhy is there so little discussion about one of Bernie Sanderss most important proposals to tax financial speculation?
Buying and selling stocks and bonds in order to beat others who are buying and selling stocks and bonds is a giant zero-sum game that wastes countless resources, uses up the talents of some of the nations best and brightest, and subjects financial market to unnecessary risk.
High-speed traders who employ advanced technologies in order to get information a millisecond before other traders get it dont make financial markets more efficient. They make them more vulnerable to debacles like the Flash Crash of May 2010.
Wall Street Insiders who trade on confidential information unavailable to small investors dont improve the productivity of financial markets. They just rig the game for themselves.
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Bankers who trade in ever more complex derivatives making bets on bets dont add real value. They only make the system more vulnerable to big losses, as occurred in the financial crisis of 2008.
All of which makes Bernie Sanderss proposal for a speculation tax right on the mark.
He wants to tax stock trades at a rate of 0.5 percent (a trade of $1,000 would cost of $5), and bond trades at 0.1 percent.
The tax would reduce incentives for high-speed trading, insider deal-making, and short-term financial betting. (Hillary Clinton also favors a financial transactions tax but only on high-speed trading.)
Fast Walker 52
(7,723 posts)being the evil fucktards they are.
Hillary of course, with her Wall St ties, falls somewhere between common sense and the GOP position.
Redness
(18 posts)Why does Reich have to dig as deep as the inconsequential flash crash to find a crisis plausibly attributable to the volume of trade? Why does he have to pivot to insider information and derivative complexity, neither of which would be targeted by Bernie's proposal anyway? Because in reality, not selling (asking high) has the same price effect as buying (bidding high), and not buying (bidding low) has the same price effect as selling (asking low); all are as speculative as the expectations motivating them. Thus, it would be a mistake to take the volume of trade to be the measure of speculation, or to tax as if it were.