[FoRK] The Looter's War on Selfishness

J. Andrew Rogers andrew at ceruleansystems.com
Thu Mar 26 06:59:30 PDT 2009

On Mar 25, 2009, at 11:39 PM, Stephen D. Williams wrote:
> Really? "No one credible seems to be saying that..."?

That is correct. Most of the quotes you pasted here are not material  
to my assertion, which makes the few that might be seem accidental.  I  
think you missed most of what I was attempting to assert.

> Normally, a regulator audits and monitors the entity that it is  
> charged with regulating to obtain proof that regulations are being  
> followed. Then they provide feedback for gaps and alarms to Congress  
> et al when problems are likely or even present. None of that  
> happened. "Specious ... dripping with non sequitur"? Yah. Sure.

AIG's acquisition of a thrift did not magically cause regulator  
failure by the government.  It does not make logical sense.   
Furthermore, the idea that a posse of regulators constantly hovering  
over your shoulder is the definition of "regulation" does not really  
make sense either, for the obvious reason that it would be extremely  
expensive for everyone with little return on that investment.

In my own experience with regulators from a number of different active  
regulatory agencies, unless they have reason to believe you are  
violating the regulations, they rarely spend much time checking up on  
you.  This is for the same reason we do not have the police follow you  
around all day to make sure you do not speed when driving.

> It is part the job of regulators to signal when they are unable to  
> accomplish the goals of the regulations they do have.

Few people would argue that there were not gross errors in the  
regulatory system at a minimum, and many would go much further, but  
instead of looking into this the people involved recently received  
promotions.  I think that sends the right message.

> Perhaps I'm not being clear enough in identifying the "sickness" vs.  
> "creative turnover". I don't think it is too hard to identify either  
> of them. Or perhaps you don't believe that monopoly, pyramid  
> schemes, or unrestricted land grabs are bad.

All these things you mention are only arguably "bad" in certain  
specific contexts, not generally.  In any specific case, whether or  
not the context is "bad" will be subject to interpretation.  Sure,  
there are some obvious cases and those are handled in a satisfactory  
manner, but those cases are rare and most real cases are much fuzzier  
in the detail.

Maybe you do not have a hard time identifying "sickness" versus  
"creative turnover" -- I suppose you know it when you see it -- but  
codifying that into a consistent set of rules and regulations that do  
not have unintended consequences and which everyone else agrees to be  
accurate is another matter.

> I don't care about markets being sensitive, as long as they are  
> sensitive in constructive ways.

Sure, but the problem here is defining "constructive".  Constructive  
is not always going to apparent to anyone, and you risk destroying  
whole classes of constructive action out of ignorance, apathy, or  
laziness.  This is the way it normally works in fact.

> The housing bubble was an obvious sickness.

I would agree.  It was largely the side effect of perverse incentives  
created by the Federal government through laws and regulations, so I  
am not sure how it could be prevented except by less stupid governance.

> The gas bubble was another.

I would disagree, market pricing transients are not "bubbles".  The  
gas market has been hovering on the edge of a phase transition for a  
few years now, and I expect to see these kinds of price movements again.

> It is likely that we can do better. It might not be likely that we  
> can figure out how.

We could do better, but I do not expect that we will.  Far too many  
people are enamored with micro-managing such things.


J. Andrew Rogers

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