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View Diary: Open thread for night owls: A stock transfer tax makes good sense (178 comments)

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  •  Not a good argument (4+ / 0-)

    The whole "if we properly regulate, businesses will move" thing is lame.  Your logic is akin to saying "we shouldn't stop company XYZ from polluting, because if we do they'll just move to China!" or "We can't have a minimum wage, because they will undercut us in India!".

    In the end, people are pretty tied to their country.  I seriously doubt all the traders from New York will just pack up and leave the country if there is a small transfer tax.  And even for those who do, high speed trading is a segment of the industry that didn't even exist 15 (?) years ago and adds almost zero value for most people.  The world will go on without it.

    •  You analogy doesn't hold... (0+ / 0-)

      ...because pollution is a bad thing.

      High frequency trading is not bad. It doesn't hurt. It helps. It makes the market more liquid, so people can get in an out of positions with less fear.

      Remember in 2008 when the credit markets froze?  That market is a ill-liquid one, with high transaction costs.  Why do you want to make the stock market look more like the (obviously broken) credit market? Hasn't there been enough pain?

      It is true that HFT probably increases short-term volatility. But who cares? As long as we resist the urge to bail out any traders, it will be fine.

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