The .25% Transaction Tax (or Let's Create Jobs by Chasing 50,000 Great Ones Away))

Surprise! Nancy Pelosi has convinced Tim Geithner that ending the U.S. co-leadership in financial markets is good for the economy. In a related story, Geithner is looking for someone to remove his horse's decapitated head from his bed. I don't think this bill will ever see the committee but the idea of it is so offensive to anyone who thinks actions have consequences that I have to call the hacks in Congress out. Financial markets require liquidity. Of course this tax would chase liquidity providers (like me and 4,500 other Chicagoans) overseas (or more accurately, the jobs would go overseas. We'd still be here.), but it also would tax long term investors. An investor is going to be less likely to invest in the U.S. knowing that the secondary market is less liquid. This affects every American. The tax would not raise the revenues Pelosi claims, as trading volumes would fall drastically,but more importantly, what right does she have to shut down a legal industry? Our government is for the people by the people. When it turns its power against the people, as it has done more and more frequently for the last 9 years, it loses it's legitimacy. The backers of this tax have more or less said it's purpose is to get back some of the bailout funds given to Wall Street but that begs 2 questions: Why did you, Congress, approve the bailout of Wall Street when the majority of Americans opposed it? (if they hadn't given them our money they wouldn't have to take it back) and second, Is Congress so clueless that they don't realize this is a tax on the American people and it may make Goldman et al more profitable by eliminating their less deep pocketed competition? When smaller market making operations disappear, with some moving offshore, Goldman and friends wider markets for securities will not have the competition that leads to efficient price discovery that benefits the American investor and, indirectly, the American pensioner. I'm at a loss.