> Taxing this decision discourages making it—even if only marginally—and makes capital markets dumber and less efficient.
Or it encourages making longer term investment decisions rather than trading like a jittery cocaine addict (which by no small amount of irony a nonnegligible number of traders are already.)
Why? We already have regulations such as circuit breakers in our markets because unlike what you are claiming, absolute liquidity is not the god you think it is. There can absolutely be such a thing as over-optimization.
They are likely suggesting that incremental, hypothetical increases in market efficiency appear to come at increasingly steep costs which primarily borne by the rest of society at large.
