You what?

The full amount of this tax would be borne by the financial industry, and not individual holders of stock or pension funds and other institutional investors. Evidence suggests that trading volume is elastic with respect to price, meaning that any drop in trading volume resulting from the tax would reduce costs for end users by a larger amount than the tax would increase them.

What the fuck has Dean Baker been smoking?

Trading volume falls, liquidity falls (same statement), bid ask spreads widen trading becomes more expensive.

WTF?

8 comments on “You what?

  1. ‘Reining in Wall Street to Benefit All Americans’

    All Americans have no right to benefit from Wall Street.

  2. The real question here isn’t what Dean’s been smoking, it’s why Timmy would take anything Dean Baker says seriously.

    Yeah, he’s an economist… But that isn’t the point. The point is that he’s a bad economist. And that’s because first and foremost, he’s a political shill.

    At best he’s Krugman Lite. Blah.

  3. I haven’t made it past the introduction yet but:

    The revenue raised through an FTT would easily be large enough to cover the cost of free college tuition (among other social programs), although if nothing were done to stem the growth rate of college costs, it would eventually prove inadequate.

    And what is the easiest way the government could lower college costs today? End tax credits and guaranteed loans. You would think that someone who claims to be an economist would be able to spot how the government is manipulating the college tuition market.

    I’m not bothering to read any further. Can someone let me know if there is a good reason to?

  4. Sorry for sounding dumb but why would the transactions occur in Wall St.

    Why not in US dollars in Canada, UK or Hong Kong?

    Isn’t all you need is a reliable legal system?

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