Larry Summers backs a Tobin tax (or at least he did in 1989)by Bob Kuttner / September 2, 2009 / Leave a comment
Published in September 2009 issue of Prospect Magazine
Now that Britain’s top regulator Adair Turner has opened the door to a forbidden subject—Tobin taxes on financial transactions—could the Obama administration embrace such an idea?
Professor Tobin first proposed his tax to address currency speculation. This was in 1972, when the fixed-rate regime of Bretton Woods had collapsed. His concern was that speculative trades were fundamentally distorting currency values and damaging the real economy. The tax that he proposed was intended to damp down the volatility in currency movements, and take much of the profit out of purely speculative, short-term moves.