By CHRIS POWELL
Does Connecticut really want to be a conspirator in financial market rigging?
That's the question raised by the data center development legislation just approved by the General Assembly and signed by Governor Lamont. The legislation will exempt data centers from sales tax on the transactions they process and commit the state not to tax them.
New York and New Jersey, where the financial markets are concentrated, have noticed the explosion of transactions there in recent years. So those states are thinking about taxing transactions. While the tax would be tiny, it might raise hundreds of millions of dollars each year because there are now so many transactions. This threat of taxation has prompted financial exchange operators to ponder whether they should move out of New York and New Jersey. Connecticut state government is salivating over the possibility.
But the explosion in transactions arises mainly from what is called “high-frequency trading,” the super-fast placing and withdrawal by major brokerage houses and banks of so many orders in a particular market that ordinary investors are disadvantaged in price. The big traders have invested heavily in computer systems and microwave transmission towers that profit by shaving fractions of a second off order execution. Trading so much faster, the big traders become the market and can cheat everyone else.
That's what data centers are about, and what the General Assembly and the governor plan to facilitate.
The few legislators who voted against the bill note that data centers employ few people once their construction is complete. Indeed, if, to lure data centers, Connecticut is to forswear any financial transactions tax, it's hard to see how data centers would generate much revenue for the state.
But whatever revenue was generated, most would come from market rigging. Connecticut should not facilitate that. Instead, as Ralph Nader and others urge, the federal government should impose a tax on high-frequency trading to make market rigging less profitable.
Lately news organizations have been full of commentaries disparaging conspiracy theories and theorists, even as news organizations should be taking many of them seriously.
Of course some are ridiculous on their face, like the QAnon stuff, but since government grows larger and increasingly conducts important business and implements policy in secret, government itself is by definition a conspiracy. The accusation leveled for years against Donald Trump about collusion with Russia, concocted in secret by this country's own intelligence and law-enforcement agencies, was a conspiracy that news organizations declined to expose until long after the damage was done.
Every day the Federal Reserve and the central banks of other major countries confer secretly to decide how they will intervene in markets, usually surreptitiously. Often they consult secretly with the executives of the biggest investment banks, to which the Fed has been making secret loans totaling trillions of dollars.
Those loans are for market rigging.
The banking conspiracy is vast. It determines the valuation of all capital, labor, goods, and services. It is not conspiracy theory but conspiracy fact - and the news organizations that lately have derided conspiracy theory never inquire about it, maybe because the conspirators buy a lot of advertising.
THE TEACHERS OF OLD
Two major causes of the decline of American education are widely understood - the collapse of the family, which has diminished parenting and led to social promotion in schools, and the unionization of teaching and school administration, which has reduced accountability.
But there is a third factor in education's decline - women's liberation. Until about 50 years ago women were prevented or discouraged from pursuing many professional jobs. Back then most women aspiring to careers beyond the secretarial pool were more or less limited to nursing and teaching. So schools had their pick of the smartest, most talented, and most caring women.
Now that women have a full range of employment options, schools have to compete much harder for the best teachers. Inevitably they don't do as well as they used to.
Of course there is no going back to injustice. But education has been the loser.
Chris Powell is a columnist for the Journal Inquirer in Manchester.