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Sunday, May 29, 2011

Preventing the Next Flash Crash

The op-ed by Ed Kaufman and Carl Levin (Preventing the Next Flash Crash, New York Times, May 6, 2011) calls for increased regulation of the financial markets to reduce the chances of a catastrophic fall in the stock, bond, and derivative markets.

Another way of slowing the amount of speculation in those markets is to institute a financial transactions tax. Doing this with a corresponding reduction in corporate income taxes would be a boost for Main Street at a cost to Wall Street.

That would be a winning trade off.

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