Comments on: A Windfall Profit Tax for Wall Street?

By: Larry Doyle

Larry Doyle — Thu, 14 Jan 2010 14:57:07 +0000

Additionally, feel free to visit my site, read and review my body of work and then get back to me rather than offering gratuitous self-serving comments here.

You’ll be busy.

By: Larry Doyle

Larry Doyle — Thu, 14 Jan 2010 14:55:02 +0000

Dare I suggest we start by exploring the high frequency trading activities of the major Wall Street banks.

AM…what word within major Wall Street banks didn’t you understand?

By: AM

AM — Thu, 14 Jan 2010 14:26:46 +0000

Again – causal link between high-frequency trading shops and TARP is missing in the analysis. Why not tax the real culprits – banks making bad loans, then getting bailed out, and using that money to buy treasuries that pay interest and then pay bonuses to their top management for fleecing the taxpayer twice-over! High-frequency trading is a red-herring brought up by “know-not-a-lots” (or as is said in India, “a half-full container makes a lot of noise compared to a filled one”.

By: Larry Doyle

Larry Doyle — Wed, 13 Jan 2010 18:10:22 +0000

Well, I knew a comment such as that from AM would be forthcoming which is why I wrote,

I guess it would have been too much to expect the Washington crowd to proactively address the topic of repayment from its incestuous partners on Wall Street. In fact, we should expect to hear the Wall Street establishment bellow that they have paid back the TARP funds and that should be sufficient. Wall Street should not be so naive. The American taxpayer bailed out the entire industry as much as it bailed out any single specific firm. Washington should not be so cute in structuring a repayment program where the costs are conveniently passed along to the American public. American taxpayers should not be easily placated.

I repeat, the industry was bailed out as much as any single firm.

By: AM

AM — Wed, 13 Jan 2010 15:13:54 +0000

Really – where did the writer get the idea that high-frequency trading firms were the ones getting TARP money and that TARP money was then used for high-frequency trading? Ever heard of CDOs? How about bad real-estate loans? What did they have to do with high-frequency trading and why should high-frequency traders be the ones to pay when it is the stupid banks that led to the crisis and had to be bailed out? Cause/effect is outright missing in the analysis in the article.

By: Larry Doyle

Larry Doyle — Wed, 13 Jan 2010 12:48:56 +0000

Anders,

From that standpoint, it sounds as if you agree with my premise.

By: Anders

Anders — Wed, 13 Jan 2010 08:06:47 +0000

Profits generated via high frequency trading is nothing but a tax on the civilian users of the financial markets; the resulting revenues, though, accrue to banks and hedge funds, not the government. This activity serves no social purpose, and the imposition of a 0.01% transaction tax (Tobin tax) would very rapidly relegate this to the bin where it belongs. Taxing the profits alone does not achieve the joint purpose of raising revenues and reducing one of the most obvious negative utility activities in the financial sector; just tax every single trade a basispoint tax and see banks start to concentrate more on the real business of providing financial services to the economy and less on proprietary trading.