There are three central assumptions built in to the opposition to this tax:

1. The more trading you have, the more arbitrage, the more derivatives, the better it is for the firms, and thus the economy.
2. Taxes that redistribute wealth are a bad idea.
3. Traders cannot be controlled.

No. 1 is the foundation of securities regulation since the days of Ronald Reagan and is the central credo of the Permanent Government of Alan Greenspan-Bob Rubin-Henry Paulson-George Bush-and-now-Timothy Geithner-and-Larry Summers. Trading is like fish. It is good for you. The more trading, the more efficient the markets are. And, dagnabit, you want efficient markets. Why? After all, if markets were perfectly efficient, wouldn’t traders have to go into another line of work? Never mind. Efficient markets are a good thing, and that’s all there is to it. Besides, trading in everything, including derivatives and derivatives of derivatives, helps the economy (when banks are not making foolish bets in them so that the derivatives unravel when the housing bubble bursts, which then does a pretty good job of destroying the economy).

No. 2 has been the way of things for three decades. Few people appreciate that back in the “good-old days,” the tax laws were written by Robin Hood. The top marginal tax rate hit 90 percent during the heroic days of World War II, stayed that way through the Eisenhower and Kennedy administrations, and lingered at 70 percent until Kemp-Roth put an end to it all in 1981. Since then, taxes that take from the rich and give to the poor have been a nonstarter, to put it politely.

No. 3 is probably true. That’s not because it has to be true, but because regulators don’t have the will, the regulations, or the resources to keep traders in line. It can happen—the floor of the New York Stock Exchange was a den of iniquity practically since it was founded, but there have been no major scandals over the past few years because of toughened-up enforcement and changes in the rules. Even if evaded, a stock-transfer tax would provide the socially useful—indeed, indispensable—affect of giving the rest of us a direct financial stake in the trading activities of the big banks, whether they are as nice as the banks say they are or “useless.”

Certainly not everybody in the Obama administration buys into all of this, particularly No. 2. No, just the people who count: Tim Geithner and Larry Summers. As long as they have the president’s ear, it will be “Status Quo You Can Believe In” time and time again.