From: Brian Atkins (brian@posthuman.com)
Date: Sat Jul 06 2002 - 15:11:35 MDT
Harvey Newstrom wrote:
>
> On Saturday, July 6, 2002, at 09:41 am, Brian Atkins wrote:
>
> >>> Plus, why would you buy stuff from misleading people -- be they
> >>> members
> >>> of a corporation or your local mom and pop store? Don't you think
> >>> on a
> >>> truly free market, the problem would take care of itself?
> >>
> >> Just like Enron. Why would people buy stock from a company that lies
> >
> > Some people will always buy the stock if they think it looks cheap
> > enough.
> > Worldcom is still trading, and some people are still interested in
> > buying
> > it, albeit at a much reduced price.
>
> You miss the point. If people don't know they are lying, they can't
> avoid them. This argument seems to say it is OK to try to defraud
> customers or cook the books, because the market will choose not to do
> business with such crooks. It doesn't work that way. The market must
> be a true free market or it doesn't work right.
I'm not sure how your suggestion of even more coercive government
regulations makes the market freer. As I said below I think over time
markets will evolve to adapt to various frauds and schemes. The
companies that prove to investors they are not part of such problems
will garner the vast majority of investment dollars.
>
> > I disagree, and think the problem would take care of itself even without
> > organizations like the SEC (who so far did a piss-poor job, something I
> > don't expect to change significantly) to force them to do things a
> > certain
> > way.
>
> You just contradicted yourself. You agree that they didn't do a good
> job historically, and you don't expect them to change. Why do you think
> the problem will take care of itself? You seem to have just argued my
> point.
I haven't been reading the whole thread, so correct me if I'm wrong. You
are taking the side that companies should be forced to label products
(ala how the SEC forces publishing of various financial info) in a certain
way, and the oversight of whether this is done correctly will also be
enforced by the government (ala the SEC). I am taking the alternate side
of letting companies do whatever the heck they want, and the consumers
(or stock buyers) will do what they will.
If you reread what I said, I said the /SEC/ did a piss poor job, and the
only likely way the situation will change is not by even more knee jerk
government attempts (remember, when was the SEC formed?) to fix what ain't
really broken. Remember, the people who really got hurt here were the
ones who were blindly trusting that the government had everything in hand.
They are always the ones who get hurt, and I don't believe the answer to
the problem is to have the government run out and make up even more laws,
regulations, etc. to make this group of investors feel more confident
again, when in the end what is likely to happen is the government will
screw up as usual when the badly run companies find ways to route around
the new rules, leaving the complacent and government-trusting investors
holding the bag.
Why attempt to create a culture of complacency and government reliance?
>
> > What I think would happen is that in an "ecology" of companies, what
> > they would soon learn is that to achieve the best stock price for
> > themselves
> > (and the insiders) they would have to voluntarily submit to plenty of
> > openness and fact checking by outsiders. The ones that didn't would
> > suffer
> > a lower stock price or even be completely unable to go public.
>
> This sounds like a perfect argument for food labeling to me. You agree
> that companies need to disclose their accounting statements and submit
> to external audits of their internal finances. If we did the exact same
If they choose to, yes they "need to". It should be left up to them.
Myself, I would definitely have a strong preference to spend money on
labeled and tested food rather than other choices. But perhaps, as WCOM
demonstrates, there are people out there who would like to have the choice
of eating untested food (it would likely be cheaper), using drugs untested
by the FDA (they would be available sooner and more cheaply), or buying
stock in companies that don't publish verified financials (gambling, etc.).
> thing to food manufacturers, we would have the food labeling I want.
> Food contents would have to be disclosed. External auditors would
> confirm the contents, This sounds like what I am asking for. I don't
> know why you explain this as if it refutes my statements.
Reread what I said. I am against coercive techniques that have the
government "making choices for me" (as you claim to not like).
>
> > As for how to discover that the books don't match reality in a young
> > market with few debacles under its belt, what you have to do is wait for
> > the company to go broke. Eventually it will not be able to pay its
> > bills,
> > and word will leak out.
>
> That is too late. By the time they go broke, all the investors have
> lost their money. We want a system to evaluate companies before fraud
> takes place.
No, only the stupid investors who bought into a company without any way
of really knowing what was going on lose money. Anyone who had all their
retirement savings in Enron stock (even if they were an employee) was
an idiot, and they deserve what their complacency and lack of critical
thinking got them. I also took a lot of financial lumps myself for stupid
decisions, but I am willing to learn from it.
-- Brian Atkins Singularity Institute for Artificial Intelligence http://www.singinst.org/
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