Friday, April 4, 2014

High-frequency trading is minor con. Wall Street is the real scam.

Here's my latest Baffler post. In it, I take a look at Flash Boys, Michael Lewis's new book about high-frequency trading. As I note, I'm puzzled by the parade of notables who have come forward vying for the Captain Reynault Memorial Award to declare how shocked (shocked!) they are about the corrupt practices of the high-frequency trading sector. In fact, these practices are well-known and have been covered in the financial press. 

I argue that the most serious problem isn't high-frequency trading so much as it is more systemic problems with the entire financial sector, which specializes in wealth appropriation, does a crap job at efficiently allocating capital toward investments (allegedly its primary function), and is a huge contributing factor to soaring economic inequality. That said, anti-Wall Street populist outrage is welcome. Let's just hope it doesn't stop there.


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