Securities Traders Association:
On December 3, 2009, Congressman Peter DeFazio (D-OR) introduced H.R. 4191, a bill titled "Let Wall Street Pay for the Restoration of Main Street Act of 2009." The bill would establish a "securities transaction tax [that] is applied to stock transactions (1/4 of 1 percent (0.25%)), futures (0.02%), swaps (0.02%), credit default swaps (0.02%), and options (at the rate of the underlying asset)."
The idea, apparently, is to have Wall Street pay for the reinvigoration of Main Street. The Securities Traders Association suggests that Main Street and Wall Street are not separate, in fact:
What the creators of this bill need to realize is that Wall Street and Main Street are not separate entities. Wall Street helps to build Main Street by raising the capital businesses need to operate and employ "Main Street. The vast majority of main street investors use managed accounts and mutual funds to invest their savings, the fees paid for such services help sustain Wall Street This tax would be passed through to those investors, the very people that the creators of this bill claim they are trying to protect.
C.A. Fitts call this the Red Button problem. If Main Street investors are told that there is a red button they could press that would take reform Wall Street by reducing corruption, eliminating drug trafficking and money laundering, enforcing transparency, eliminating bubbles, reducing unholy relationships with regulators and legislators, so that the market falls back to a more reasonable and sustainable level, almost no Main Street investor will push that button. We have become dependent on a system that is too big too fail, to interwoven with our pension plans, 401(k) plans, IRAs, and bank accounts to be allowed to fail. Better that the collapse come slowly, counterbalanced by bubbles, as long as possible. C.A. Fitts call this the "Slow Burn" scenario. We keep it going until, presumably, the Chinese intervene to impose a structural adjustment, as we ourselves have called disaster capitalism as we have imposed it on out of control debtor nations. Ms. Fitts memorably likens Wall Street and its enmeshment with government and Main Street to a tapeworm. The tapeworm injects chemicals that produce euphoria in the host. The tapeworm gets so interwoven with the bowels of the body politic, that to remove it could be fatal; so the pleasure-inducing parasite is allowed to grow, until it must die as its host does. Pending disaster, or Chinese intervention, perhaps we disinvest in Wall Street and put our money into local farms, businesses, and things we can personally engage with as stakeholders whose voice is heard. "There is no alternative to the current system. The corrupt banks and brokerages are too big to fail." Aren't these warnings that we had better start building alternatives from the grassroots up?
