From: Technotranscendence (neptune@mars.superlink.net)
Date: Sat Sep 07 2002 - 11:14:38 MDT
On Saturday, September 07, 2002 11:59 AM Olga Bourlin
fauxever@sprynet.com wrote:
> What's the difference between these executive
> thugs and an ordinary pickpocket who helps
> himself to some of your money? Seems to me
> there haven't been *enough* arrests (and still
> much too much built-to-specifications second-
> home-heavenly-mansion-in-the-snooty-hills
> housebuilding going on).
>
> Granted - it's all "alleged" for now. We'll see what
> happens. If they executives didn't give anyone a
> stick to hit them with ... no problem, right?
First, the arrests on TV are for one reason alone: to make politicians
and bureaucrats -- who are very skilled at stealing and wasting money --
look good. (These are also the same guys who attend the dinner parties
and except big campaign donations from executives.)
Second, if it's alleged, then you really have to wait for evidence and
judgment before convicting. If not, then you're convicting based merely
on your sentiments and that's no different than arresting the Black man
when a TV set is missing merely because he's Black.
Third, I don't think most of these people will get a fair trial given
the degree of politicization of this issue and the fact that the public
and the Press are looking for easy scapegoats for the recession. Rather
than examine the record of government intervention here -- IMF bailouts
throughout the 1990s creating a moral hazard in overseas investment, the
Fed's low interest rates during the late 1990s and again in the 2000s
fueling more risk taking, and the like -- it's easy to blame it all on a
few rich people.
This also helps fuel the myth that investing in stocks is not a bit like
gambling. A lot of my friends who lost big in the market have admitted
to me, they did not know what the heck they were doing. One who didn't
get burned, admitted to me that all his gains -- quite substantial,
since he bought his first house with money he made during the upturn
merely through buying, holding, then selling on IPOs -- were just luck,
since the market kept going up and up. Granted, this does not excuse
fraud or deception, but you really have to be fatally stupid to invest
your retirement money in one stock or not to pull it out once you start
to lose like 10% of your capital. (Serious investors usually risk far
less -- closer to 2% of their capital. They don't just enter a trade on
a hunch and exit on a whim -- at least, not if they want to make money
in the long run. Needless to say, most people are not serious and just
thought anyone can make money. A lot of people also don't seem to
realize that in stocks (or options or futures or any such thing) you're
betting that your view of the market is correct or more correct than the
guy you're buying from or selling to.)
Lastly, I generally agree with the author that if you're defrauded,
civil action is best here. If you were pickpocketed would you want your
wallet back (with perhaps something extra do damages) or would you
rather have the pickpocket in jail? I'd go for repairing the victim
over punishing the crook, especially if the latter involves the victim
and others paying taxes to house the crook. That's like being
pickpocketed, then being mugged afterward.
In this respect, there's no need for new laws or regulations. Fraud is
already a crime and has been one since time immemorial. In fact, in
terms of fraud, if some executives are defrauding investors, it's not
even a new wrinkle on fraud. That's been going on for decades anyhow.
Cheers!
Dan
See "Finding Good Art: A Challenge for Objectivists" at:
http://uweb.superlink.net/neptune/ArtFree.html
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