Dean Baker on Financial Transaction Tax

Dean Baker on BloombergBloomberg is really pushing the frontiers in journalism. In order to give readers a balanced account of a proposal by Representative Peter DeFazio to impose a 0.03 percent tax on financial transactions (that’s 3 cents on every hundred dollars) it went to the spokesperson for the Investment Company Institute, the chief investment officer from Vanguard, and an academic with extensive ties to the financial industry. It also presented an assertion on the savings from electronic trading from Markit Ltd. Based on this diverse range of sources, Bloomberg ran a headline: “Democrats assail Wall Street with plan that may hit mom and pop.” …

Most research finds that trading is price elastic, meaning that the percentage change in trading in response to a tax is larger than the percentage increase in trading costs that result from the tax. The non-partisan Tax Policy Center assumed an elasticity of -1.25 in its analysis of financial transactions taxes.

This means that if the tax proposed by DeFazio would raise the cost of trading by 20 percent, then trading volume would decline by 1.25 times as much, or 25 percent. Investors would pay 20 percent more on each trade, but would be trading 25 percent less. This means that their trading costs would actually fall as a result of the tax…

The only way “mom and pop” get hurt in this story is if they make money on average on their trades. That is a hard story to tell. If mom and pop are lucky and sell their stock when it is high then some other mom and pop are unlucky and buy the stock when it is over-valued. As a general rule, trading will end up being a wash…

Of course there is someone that gets hurt by less trading — the folks who were making money on the trades — that’s right: the financial industry… Since it may not sound very compelling to hear a multi-millionaire complain about the prospect of a pay cut, it sounds much better to make up a story about mom and pop investors.

—Dean Baker
Bloomberg Asks Wall Street How It Feels About Taxing Wall Street

My Dirty Little Blogging Secret

Frank Moraes - Webpage ImagesWhen I first started this blog, I had no idea whatsoever what I was doing. I knew computers, of course. And I set up my first web server in 1993. And I was, I guess, an expert with HTML, CSS, JavaScript. And I’m a decent enough PHP programmer. But I’d never used a content management system before. And I didn’t read blogs. In fact, I wouldn’t even call Frankly Curious a blog for the first couple of years. Most of all, I had no thoughts about it being publishing in the grand sense: there was no layout, and most of all: no webpage images.

It took me almost exactly two years, in late 2011, to start using webpage images. At first it was a now and then thing. But within a month, it was required. I am a man of habits. But it caused my writing to change. Now, since there were always webpage images in the upper-left hand cover of each article, I had to write enough text to be below it before I could quote someone.

You know what my quotes look like:

They are done inside boxes. Now they have a light grey background, but that’s relatively new. It’s slightly less readable. But I believe most people just scan display quotes.

Webpage Images Changed My Writing

I didn’t want the box to run into the image. So I had to write enough introductory material to get beyond the image so that I could quote whatever I wanted to. This changed the way I wrote. Instead of doing the standard kind of blog writing — X said: [quote]; let me add — I wrote a summary of their argument.

And I like it that way. I can normally condense a 3,000 word article down to a 100 word summary. I hate it when bloggers provide more quoted material than new material. As much as I love Digby, she will, at times, quote thousands of words. Mark Thoma does much the same, but I have to give him a pass; he does extensive edits of the material for things all his readers would know. (He writes for economists.)

But as much as I like the general style of Frankly Curious, it is still a bit embarrassing that it is the result of adding webpage images to the site. It seems like there ought to have been some grander vision. But there wasn’t. In fact, at times, I felt like a fraud, doing the literary equivalent of treading water.

There’s a very good side of this, however. Limitations often improve us, and this case was no exception. It forced me to think more deeply about the subject at hand. My freelance writers can all tell you: there is no such thing as “literary treading water.” If you need another hundred words, you need to come up with something else to talk about. I’ve seen lots of writers pad, but at most they get 20-30 extra words out of one thousand.

Sizes of Webpage Images

There’s an interesting mathematical aspect to these corner article webpage images. If they are very small, you don’t need much of anything before you start quoting. “X said the following…” is good enough. And if the images are really big — take up the entire width of the page — when you don’t need anything at all. But there are optimal image sizes for a webpage. We could do some math, but what would be the point? Just remember that it has to do with the width of the content area and the height and width of your webpage images.

With the old (pre-WordPress) site, the content area was thinner: a bit less than 500 pixels. So I thought that 150×200 pixel webpage images looked rather good. But on the new site, the content area is about 100 pixels wider. And the 150×200 pixel images looked kind of small. So I’ve increased the size of the default images to 225×300. This is the same aspect ratio.

It’s all kind of complex, but the net result has been that now I don’t need to write as many words to be past the image. Of course, I don’t even think about it anymore. But it does come up when I’m dealing with quotations pages. There, if the text is not long enough, I have to put the image on the right, or it looks bad.

Anyway, that’s my dirty little secret: I changed my writing style for the sake of making my webpages look prettier. But then, I’ve never claimed to be anything more than a hack.