Tyler Durden has pointed out several reasons why HFT is a bad idea here and here.  Also see my recent diary, where these and others links appear.  

A Tobin tax on just HFTs could effectively make it unprofitable and/or generate ~$100 million per month in tax revenues, as they might be willing to pay that for the combined advantages that the current system provides them.   The greater crime is renting millisecond  "look ahead" privileges to insiders who have super computers co-located on exchange floors and are able to use the time advantage to game the market.

One of Tyler's later articles shows how our TARP money is enabling, and perhaps encouraging, the recipients to engage in a massive short squeeze that punishes the bears, drives up prices of squeezed stocks, and benefits TARP recipients, but may be having the effect of driving some of the big institutional investors out of both lending stocks to short sellers and other financial market investments.  

 

"It is not necessary to have hope in order to persevere."