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.