I just wish we had a little sales tax on stock, bond and commodity movement…say 1%…way less than the 5% we pay on all the stuff we buy and sell. Sure would do a lotta funding for paying off the Chinese and stocking up for Social Security and building up the infrastructure until the boyz and all the hot money cooled a bit.
Can anyone explain to me why this is a bad idea?

Like any tax on consumption it slightly stifles that activity. We shouldn’t mind how people play with their money any more than how they use their car. It’s theirs. They earned it (presumably). And, if you want the stock market to work properly to shift resources towards deserving companies, then you don’t want it stifled.

Of course, the same can be said of any transaction in the financial world or in real estate or art or whatever.

This explains why a consumption tax is silly and why Republicans who want a consumption tax are silly (and somewhat dangerous).

Better is to tax a person’s income less some deduction for the cost of living. That way it’s only the profits taken from the economic system which are taxed away and returned to the larger system for everyone’s benefit.

The big question which economists and OMB can perhaps answer is whether there’s enough gold in them thar hills to actually fund government. If it’s not enough, then you still have to tax into the cost of living which really sucks.

It my understanding, and Krugman has addressed this, that only supply and demand affect prices and unless a speculator buys and stores oil thus removing it from the market place his options and futures trading will have little or no effect on price. Krugman has said there is no evidence of an increase in oil storage.

I wonder if he would say the same about real estate firms trading houses amongst themselves and jacking the prices up each time.

Yes, Republicans are stalling the oil market speculation bill.
Yes, Democrats are likely to adopt some form of the Gang of 10 plan.
Yes, House Republicans are annoying.
Yes, Democrats did let the Enron loophole continue to get the farm bill.

Sigh.

I’m thinking there’s still a clear need for both a short-term semi-emergency bill to boost the economy and a longer-term bill to set the stage for and to begin the Green Revolution in real earnest. The short-term bill has to address these gasoline prices which are just killing the economy. The political race, conventions, August recess and Republicans yelling “drill drill drill” complicates matters, but shouldn’t prevent some kind of progress from being made.

OIL-RICH FUND EYEING FORECLOSED US HOMES

One sovereign fund, said to have earmarked $29 billion to purchase foreclosed residential real estate, recently hired a West Coast mortgage broker and is starting to search for bargains, The Post has learned.

I might add that even without the oil commodity subplot this kind of action on the part of some deep pocket somewhere is exactly what I’d expected once the scale of the mortgage crisis became clear, and therefore is exactly what seemed so nasty about it. Hugh, I haven’t checked your list in a while, but perhaps you’ll consider adding this somewhere as direct and foreseeable fallout of the refusal to regulate mortgage and other consumer lending.

It my understanding, and Krugman has addressed this, that only supply and demand affect prices

I like Krugman but I don’t think he has actually gone back and studied what the oil market has been doing the last 4 years. If he had, he might notice that political instability and supply and demand issues have had very little effect on how they have behaved. I have an extended item on this in my scandals list at 365 on this.

Astrologically, there is a configuration approaching that I estimate we’ll see the full effects of in 2009-2010. Last time this configuration was operative was 1930-1932 and then 1964-1967.

Of course, geopolitical events play a part as well. The drive for independence that we’re currently seeing in Ossetia vis-a-vis Georgia and Georgia vis-a-vis Russia will likely be seen in other parts of the world with likely armed conflict being the means to achieve it. The Kurds and Iraqis in general come to mind. Weak, unstable governments will likely fall.

Food and fuel are subsidized by developing countries but they have recently had to raise prices to locals since the governments cannot afford the support the subsidizes with out destroying their national debt.

I am always surprised how economist are happy that there is no price / wage spiral due to fact that wages have not risen during the current run up in commodity prices. Maybe it is good from a ivory tower perspective but if your blue collar or middle class stagnant wages are disastrous.