Speculation Proponents

I came across this very interesting article about how former IBM CEO Louis Gerstner suggests that short-term investment gains should be taxed at 80%. I have long opposed short term speculation so his comments just about had me jumping up and down. He admits that there would be a great deal of opposition to such a proposal since profits for many are tied to the volume of transactions. That got me thinking about all the groups that have a direct vested interest in maintaining the status quo:

1) The gamblers. People actively involved in speculation who feel they can strike it rich. It has been well established that playing the lottery in a serious manner is ridiculous, but lots of people still do so. Speculation is a lot less obviously a bad idea.

2) The upper end of the bell curve. People who managed to make a bundle playing the markets. Of course they admire the system that made them wealthy, and they have the political contributions to make their voices heard. Overexposure of their successes fuels the hopes of group #1.

3) Inside traders. Speculation serves as a fantastic cover for the use of illegal information.

4) The infrastructure. All the businesses who support the speculative markets, from the trading companies, to the rating agencies, to the financial news services. The house always wins.