Re: Why "progressive" tax schemes are evil

From: Matt Jensen (
Date: Tue Mar 20 2001 - 13:41:30 PST

On Tue, 20 Mar 2001, Tom WSMF wrote:

> On Tue, 20 Mar 2001, Jeff Bone wrote:
> --]> From: "Matt Jensen" <>
> --]> > [Oh, wait. I should have made that broader. Not only are Tom and Jeff
> --]> > against laws "for your own good", they're against laws "for the good of
> --]> > others".]
> What if there were laws in place to regulate stock investment? What if
> before you made a stock trade it had to be approved for soundness, set by
> some regulatory body?

Society acknowledges that investments are risky.
And eating meat is risky. Even drinking apple juice has a risk of
coliform bacteria.

The point of regulations should be to reduce serious risks where people
can't be expected to see them themselves. So here's how I would rank

1. Eating meat. HIGH RISK of food poisoning at the packing plant, where
the consumer has no control. This was graphically illustrated in
Sinclair's "The Jungle", which led to the first meat inspection laws. It
is still true today to some degree, to judge by Schlosser's "Fast Food
Nation". Gov't regulations needed? Yes.

2. Drinking apple juice. LOW RISK of E. Coli; I never noticed a case
before Odwalla. Gov't regulations needed? I could go for requiring a
warning on unpasteurized juices; that seems proportional to the risk. I'd
like to be free to purchase unpasteurized juice if I choose.

3. Investing in stocks. HIGH RISK of loss of capital. However, when you
sign up with your online broker, they not only warn you about the risk,
but they ask you questions to see how experienced an investor you are.
This reduces investor risk, and guess what? It's there because of
government regulations. Just as people selling investments are not
allowed to lie to you about risk. Gov't regulations needed? During account
setup, yes. During each trade, no. Tom's suggestion is like a credit card
company that asks you to re-apply before every purchase.

So Tom, dropping your bogus hypothetical, tell me about *existing* gov't
securities regulations. Are you in favor of them? Insider trading, pump
and dump, margin limits, all of these things that protect investors are
proactive. Do you want to scrap them and let the possibility of a civil
suit keep brokers and IPO-hungry execs in line? Just curious.

-Matt Jensen

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