Sometimes even a blind squirrel finds a nut

But, beware; pigs will root around in a forest looking for nuts

“Sen. Charles Schumer told regulators that sophisticated electronic traders should bear the cost of monitoring their dealings, with special fees assessed to firms that issue and then rapidly cancel securities orders.” (Fee Pitched for Fast Firms, Senator: High-Speed Traders Should Bear Cost of Oversight, WALL STREET JOURNAL, 5/9/2011)

Well, Chuckie may be on to something. Back in January 2010, well before the flash crash, The Hedged Economist pointed out that a trading fee could benefit financial markets. But, as “Efficient capital allocation doesn’t require perfect liquidity” pointed out, the great danger is Governments’ addiction to other people’s money.

After the flash crash of May 6th , a number of the postings in May 2010 also mentioned fees as a remedy. Throughout The Hedged Economist’s discussions of fees, the emphasis has been on the functioning of the financial markets. Unfortunately, Chuckie has other ideas as borne out by statements like: “bear the cost” or “such charges could defray the expense of building a new system to track in real time the orders.”

Clearly, Chuckie is more akin to the pig rooting around for grub than a squirrel that discovered a treasure. It’s scary that a Congressman thinks of the economy as just an instrument for supporting Government. Why build a new system for tracking orders in real time when a properly designed fee structure, one designed with market functioning in mind, would eliminate the need for the tracking?

Chuckie seems more interested in tracking problems than avoiding them. It’s enough to cause reasonable voters to abandon good ideas in order to keep people like Chuckie from perverting them.