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AP Says a Financial Speculation Tax Could Lead to an Attack By Martians

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Wednesday, 28 September 2011 20:34

Close, but not quite; citing no evidence whatsoever, an AP article on plans to impose a financial speculation tax told readers that:

"though the tax could dent growth and employment, it has won a fair degree of support across the 17-country eurozone, including France and Germany, the EU's two biggest economies."

This should have caused readers to scratch their heads and some people at AP to get fired.

Okay, we know that rich and powerful people don't like the idea of taxing financial speculation. A serious news article would just tell us that rich and powerful people don't like taxing financial speculation, it would not just make things up about the tax slowing growth and job creation as this piece does.

The reality is that the tax rates being discussed would just raise the cost of financial transactions back to where they were in the 80s or even the 90s. Perhaps AP's reporters/editors don't have any knowledge of these decades, but we had plenty of growth and job creation back then. If the lower transactions costs of the last 15-20 years have helped growth it would be hard to find evidence for this in the data.

Comments (6)Add Comment
Absence of Martians Proves Lower Transactions Cost Creates Jobs
written by izzatzo, September 29, 2011 3:22
If the lower transactions costs of the last 15-20 years have helped growth it would be hard to find evidence for this in the data.


Exactly. Any economist knows even though a per trade tax would overwhelm computers and slow transaction volume by forcing traders to increase the unit size of trades to the point where computers don't crash, the higher transactions costs would not slow job growth by choking off investment in smaller trades.

Stupid liberals.
...
written by liberal, September 29, 2011 4:53
I see some idiot who doesn't understand izzatzo writes spoof has already downgraded his/her post...
A Suggestion
written by Tyler Healey, September 29, 2011 9:41
"It would have been appropriate to remind readers that ... tax increases slow growth by pulling money out of the economy." - Dean Baker
Taxing financial speculation
written by Joe Emersberger, September 29, 2011 11:26
Speculation not only diverts money from priductivs uses - it also leads to major crises. Incredible that people miss that after all the financial meltdowns around the world since 1997 - to say nothing of the depressed growth rates around the world since the 1980s.

How many speculative bubbles have to burst - with disastrous consequences - before some people pull their heads out of the sand?
...
written by bmz, September 29, 2011 12:22
@Liberal--other than using sophomoricly larger words, izzatso sounds pretty much like other Republicons. How do you know he is spoofing?
any economist knows isthatso's schtick
written by frankenduf, September 29, 2011 1:15
yo bmz- how do u know that it's a spoof?- read his title- duh

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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