Putting stock market reform at the center of reform conservatism

The FT reports that the “FBI has joined securities regulators to tackle the potential threat of market manipulation posed by sophisticated computer trading strategies that have taken markets beyond the scope of traditional policing.”

So more law enforcement and more regulation. But if this is indeed a problem, would not some sort of transaction tax be the more efficient and market friendly remedy to deal with any negative externalities? In the past, I have written about a 0.01%-0.02% Pigovian tax on trading stocks and bonds and a 0.05% tax on...