High frequency traders tend to provide higher liquidity to the markets that they trade in, which is objectively better for the marketplace as a whole. As evidence of this, I submit the fact that a number of exchanges actually pay traders to increase liquidity, while charging traders to decrease liquidity.

This is the real problem with the current system. Market makers that have the ability to see incoming trades and place their own trades ahead of them have a huge unfair advantage over everyone else. This behavior is what I would call "basically stealing" as it allows some participants in the market to see the future before everyone else does. And I don't just mean because they have a fast connection to the exchanges. Allowing these people to see incoming bids/offers before they are executed is tantamount to allowing them to see everyone's poker cards before they are played.

So in summary, high frequency trading is a good thing, unless it is coupled with incoming bids/asks before they are executed on the market. Taxing high frequency trades penalizes both the good and the bad, so the tax is a bad idea. Instead we need to eliminate the information asymmetry by prohibiting trading based on incoming bids/asks.

Analogy fail.

What you describe is exactly what we want to have happen. The idea is to make the action that causes harm expensive, and the action that does not cause harm cheap. Thus, molestation should be made expensive (illegal) while possession should be made cheap (legal), discouraging people from causing harm to others.

Where your analogy fails is that murder is exactly the problem we are trying to prevent by making it expensive (illegal). The GP is making the distinction that possession of child porn is not the actual problem, molestation is.

That's a step in the right direction, but the actual proper way to use the tax code to influence behavior is to tax pollution.

Imagine if we could magically get electricity from sources that have no external costs. Then we would not care how much electricity people used because nobody is harmed by the use of electricity. It just so happens that we get most of our electricity from sources that have huge external costs in the form of pollution. So tax the emission of pollutants and the actual harm to society either stops or is paid for by the tax revenue.

Note that this tax is not designed to raise revenue just for the sake of raising revenue. If all electricity was generated by solar power (which has minimal external costs), only a small amount of revenue would be generated. In the case of photovoltaic solar power, only pollution generated from creation and disposal of the panels and electronics would generate revenue.

In a completely free market, this is when a third producer of widgets will enter the market and compete with the monopolistic widget seller. The ability for anyone to enter a new market and compete with the existing players in that market is one of the keys to having a properly functioning capitalistic economy, yet this freedom is often overlooked by many. In your example, consider what would happen if the two original widget makers were evenly matched. After a while, they might both become complacent and the price of a widget might start to rise. As soon as an outside entity sees the widget market and decides that they can produce a better or cheaper widget, they will enter the market regardless of how many producers of widgets exist already.

The real problem with capitalism as currently implemented in the United States (and many other places) is that some markets have significant barriers to entry that new competitors must pass. The market for cell phones and mobile internet is a great example of these types of barriers. In order to enter the market, each competitor must have the use of some chunk of electromagnetic spectrum for their devices to use. Suitable spectrum is limited by simple physics so the number of competitors is clearly limited. Also the government has allocated some spectrum for other uses, so the available spectrum is even more limited. Without the ability for new competitors to freely enter the market, a natural oligopoly forms based on whoever has control of the spectrum, and competition is limited.

Note that the existing competitors in the cell phone market don't necessarily even need to collude to drive prices up. They can each independently examine the market and determine that since the market has become controlled by a limited number of entities, each competitor's profits will be maximized by keeping prices high. It might be true that in the long term, the most efficient competitor will do better by lowering prices to capture the entire market, but that will take years or decades to accomplish. And in the meantime, their profits could have been higher by keeping prices higher. We've all seen the obsession with next quarter's results, so it is no surprise which path is taken.

Wired internet services have the same problem, but with slightly different barriers. Many communities have exclusive franchise agreements limiting competition. But even without those governmental limits, future competitors face increasing resistance from residents because many people in a community do not enjoy having roads torn up to put in parallel infrastructure. Another problem is that geographically large competitors can artificially lower prices in areas where new competition happens to pop up. They may even take a loss in these areas for a short time until the new competitor is driven out of business. The large competitor is able to do this because they have captive areas where the prices remain high and can use the profits from these areas to subsidize the losses in the competitive areas.

These types of problems don't happen in markets without significant barriers to entry. Take the production of pencils. Anyone can start a company producing pencils if they wish. You can even make one at a time in your basement if you wish. Because of this freedom, pencil prices are driven close to the cost of production by existing competition, along with the threat of more competition if the existing competitors become inefficient.

In summary, I think the problem to which you refer is not one of capitalism itself, but of the current implementation. "Unbridled capitalism" does work in free markets, but not in markets with significant barriers to entry.

Actually you gain weight when falling off a building. Your mass m = E/c^2. When falling, the energy contained in your body has increased by the amount of kinetic energy you mention. So the mass of your body has increased by the amount of kinetic energy added to your body divided by the square of the speed of light.

Your weight has thus increased assuming a constant gravitational acceleration. Since you're falling toward the earth, you will actually experience even more weight gain because the gravitational acceleration due to the earth's mass gets larger the closer you get to the Earth. The increasing gravitational acceleration will have a much larger effect on your weight than the small amount of mass gain.

Not such a good weight loss plan.

FYI - 1 oil barrel (bbl) is 42 US gallons

I don't think it's really fair to say that nuclear and fossil fuels have the same problem of limited supply. Technically it's true, but the limits are so much different. With fossil fuels we might have on the order of 1,000 years of fuel left at earth's current power usage. But with nuclear fission (including thorium reactors and seawater uranium extraction) we might have on the order of billions of years of fuel available at our current power usage. Even if we were to sustain exponential growth in power output, nuclear fission might be able to get us through on the order of 10,000 years.

That said, I like your forward thinking, and I wish more people would consider the future beyond next quarter's financial report.

Of course it is absurd that the Texas school board is even considering such changes, but it really is up to the people of Texas to fix their school board.

On the other hand, if an education in Texas gets bad enough, universities and employers might start to pass over applicants from Texas because they are under qualified. This seems like a good thing as it is basically the free market sorting out the educated from the ignorant.

If only we were so lucky as to have the choice between scientists and government bureaucrats. As it stands now, we have the choice between government bureaucrats and marketing shills, executives, or shareholders. One group is arguably incompetent, while the other group is actively trying to rip as much money off the population as possible, while providing as little value as possible. Thus, it becomes somewhat less clear which side is better.

Sure, it's $2.6 billion dollars directly spent on advertising, but how much of the "shipping and handling, information technology and non-manufacturing employee compensation" expenses were related to marketing product. For example, how many of the non-manufacturing employees are actually only employed because of the advertising Pfizer does? I think we can agree that more than $2.6 billion goes into Pfizer's marketing budget, but that we really don't know for sure how much.

I have no doubt that Pfizer is a well run company, that is looking out for its own best interests (making as much money as possible). My point is that those best interests are not the same as the best interests of the USA as a whole.

If we had an entity that had deep pockets, no need to profit directly from its inventions, and could just exist solely to turn R&D money into drugs which were then released into the public domain for anyone to produce, we would have a more efficient system precisely because this entity would have no need to market its products. Competition on the manufacturing side would drive margins down to very small levels (exactly as a free market should) because any drug manufacturer could produce these drugs. Where would this entity get money if it just put its developments into the public domain? That's why it's not a for profit company. The only way this will happen is if it is a charity, or if the government funds this research. And realistically charities are not large enough to support this kind of operation.

So I don't think I could run Pfizer better than it's being run now. I think that Pfizer's goal is to produce as much money as possible, but that the country as a whole would be better served by an entity whose goal is to produce as many drugs as possible. Which is how this entire argument gets back to government funded R&D.

If your competitor develops the next generation of AI bomber drones and then decides not to sell any to you, what happens then?

That's some great Big Pharma shilling you've got there.

Fact is, these companies spend more on marketing and administrative overhead than on R&D. In some cases, much more. But don't take my word for it. Check out Pfizer's 2008 Financial Report or Merck's 2008 10K filing.

Pfizer's 2008 Financial Information:
Revenue: $48.296 billion
SI&A expenses: $14.537 billion
R&D expenses: $7.945 billion

So as you can see, Pfizer spent 83% more on marketing and administrative overhead than on research and development.

Merck's 2008 Financial Information:
Sales: $23.850 billion
Marketing and administrative expenses: $7.377 billion
R&D expenses: $4.805 billion

Merck spent 53% more on marketing and administrative expenses than on research and development.

You're delusional if you think that these companies are the most efficient way of getting money spent on the research and development of new drugs.

The Fair Tax is a bad idea because it is a consumption based tax, and consumption taxes are known to be regressive. I'm pretty confident that most rational people can agree that regressive taxes are bad for the country as a whole.

How about a flat income tax? Make it extremely simple. Sum up all ones income and multiply it by X%. Allow no deductions of any kind. Remember, this includes ALL income, so there are no loopholes like lower capital gains taxes.

Also, eliminate all federal excise and other taxes. The only things that should be taxed other than income are things that have external costs associated with them (costs not borne by the producer or the user). A good example of this is pollution. But there are other ways of dealing with these external costs, one of which is regulating them. If it is determined that taxing something is the most efficient way of forcing the external costs into the price of the product, then maybe some of these taxes should be brought back.

In addition, I propose that we eliminate taxes on corporations and other businesses. All of the money is either put back into running the business (this is what we want, as this grows the economy), or distributed to the owners/employees/etc of the business. When those distributions occur (whether by paycheck, dividend, bonus, or whatever) the recipient will be taxed at X%.

Social Security should not be a separate tax. If we decide as a country that it is not good to let old people starve in the streets, the welfare program should be equipped to deal with that. A mandatory retirement plan is the essence of big government. Even though it is ostensibly for a good cause, the government should not get involved with anything unless it is clear that the free market cannot solve the problem in the most efficient way possible for the most people. If it can be shown that a majority of the population would end up starving in the streets or on welfare, then Social Security or similar might be reasonably reconsidered.

As I said earlier, I believe most rational people are opposed to regressive taxation schemes. That said, there are some of you that would prefer a progressive tax rather than a flat tax. I am not convinced that a progressive tax is necessary, but if it is, this "Simple Tax" scheme that I have outlined could be easily adjusted to include a progressive tax rate. Instead of everyone paying X%, you could insert whatever brackets or power function or whatever instead of a flat rate.

Instead of allowing Congress and the President to spend money with little consideration of its future costs, the current tax rate should be adjustable based on the size of the budget and the size of the national debt. The government should have two variables to control: the size of the budget, and the size of the outstanding debt. Each year, the size of the debt should be set at some percentage of GDP. The amount of spending (budget) should then be determined. The tax rate would then automatically adjust to keep the national debt at the determined level. In this way, the trade-off between spending now and spending later becomes readily apparent.

One final mostly unrelated note: Please read up on what a Condorcet method is and under what scenarios Condorcet methods are superior to a plurality system. Pay particular attention to the example given about choosing the capital city of Tennessee. Changing our voting system will go a long way to removing the cruft that has built up in Washington D.C. over the years.

By the way, I'm from the USA if that hasn't become apparent. :)

France: 640,000 km^2
USA less Alaska: 7,443,000 km^2
GDP France: 2,978 Billion USD
GDP USA: 14,330 Billion USD

France: 4.65 million USD per km^2
USA: 1.93 million USD per km^2

While these numbers indicate that France will theoretically have an easier time building a rail network than the USA, its not as clear cut as you indicated. Also, if you cut out many of the sparsely inhabited areas in the contiguous United States where nobody is suggesting a rail line should be built, the numbers look even better for the USA.

Boeing 787 Dreamliner: 98 passenger miles per gallon
TGV Duplex trainset: 632 passenger miles per gallon (gasoline equivalent)

There are very real reasons for preferring energy efficient rail travel over faster plane travel