Comments about ‘Mark Weisbrot: Yes, Congress should start taxing financial transactions’

Dumb idea. The cost would fall largely on individuals and middle class people
Volatility in the stock market would increase as trading volume decreases, producing larger price swings.
Would banks be exempt of the tax on their overnight transactions? That would not go over well with average Americans.
Sweden tried a financial transaction tax in the 1980s. It was a failure. Trading volume moved elsewhere and the tax produced only 3% of the expected return, less than the cost of collection. If Europe implements a financial transaction tax, trading would move to the US, benefiting our markets.
This is a populist Robin Hood remedy, being sold to a gullible American public by hucksters. Our economy is sick. Why make it sicker? The Stock Market is a way for companies to raise money. We need to encourage transactions not put a damper on them.

I have a hard time believing the opposing arguments to this tax. Three cents per hundred dollars is nothing, and so what "if the transactions accumulate." The purpose is to reign in speculation, reducing the number of purely speculative transactions.

The whole financial sector is a woefully underregulated mess. And it has surpassed manufacturing as the largest sector in the economy. This is part of our problem. Finance as an end in itself is a scary thing. When money becomes the most sought-after product, something is wrong, for money is no product at all. Money is a tool, a pure fiction we use to ease the exchange of real products. John Stuart Mill described it as "a machine for doing quickly and commodiously, what would be done, though less quickly and commodiously, without it: and like many other kinds of machinery, it only exerts a distinct and independent influence of its own when it gets out of order."

The unregulated derivatives market is exhibit A. Last I checked, it was up to $1.4 quadrillion, or twenty times the size of the entire world economy of real goods and services.

In 1990, the total volume of financial transactions in the world was 15 times world GDP. In 2010, the volume was 67 times world GDP. Foreign exchange transactions are 70 times world GDP. By some estimates, 95 percent of financial transactions are speculative. In other words, they have nothing to do with the actual production or consumption or real goods and services.

What a great idea. Lets get it done.