Better putting some sand in the wheels than building channels that deviates the flow of capital.

Sir perhaps if there was a tax on responding an email during the first ten minutes of receiving it many unnecessary embarrassments could have been avoided. And that is primarily the role of a Tobin type like tax proposal, to slow things down, to give us a little more time, to put a lid on the trading of any small arbitrage opportunity becoming a purpose and not a tool. And, of course, in this I agree with Avinash Persaud’s “Time to put sand in the wheels of the market” August 28. Also, when you are allowed to put huge taxes on so many other goods and services, why should a minuscule tax of this nature be the source of much more dangerous inefficiencies?

But, having said that, let me point out the irony with so much being discussed about what a Tobin tax, with its little sands in the wheels of the market could do, compared to how little discussion, or none at all, there has been about the construction of the huge channel that the current capital requirements for banks made in Basel signifies, and that deviates trillions from what is perceived as risky to what is perceived as less risky. That is indeed a humongous tax, that is indeed a source of crazy structural inefficiencies, and that is what we are now paying for with the current financial crisis. Compared to that a Tobin tax is only a footnote