10 ms·

The regulations put in place by the SEC are not to help companies, but to protect U.S. citizens from being scammed all the time. Sure, the wild west is fun, bu

The regulations put in place by the SEC are not to help companies, but to protect U.S. citizens from being scammed all the time. Sure, the wild west is fun, but if you are in an economic ecosystem where a large percentage is comprised of scammers/fraudulent companies, then it will be detrimental to long term success.

m777z 9y ago
Which is why most publicly-traded companies would get the SEC seal of approval in my hypothetical scenario--institutional investors (which I think own most of the U.S. stock market) would demand it.
Jabanga 9y ago
>but to protect U.S. citizens from being scammed all the time. US citizens shouldn't be treated like children that need to protected from their own stupidity.
- isubkhankulov 9y ago
  history has proven this sentiment wrong
  - Jabanga 9y ago
    This is not a sentiment that can be proven wrong. It's a statement on basic rights. And history shows that attempts to control complex industries with cookie cutter rules imposed from on top create the most dysfunctional industries in the economy, namely finance, pharmaceuticals, and healthcare.
    - jnwatson 9y ago
      Much like vaccines, meat inspection, and building codes, we've forgotten what it's like without them. We (Great Britain and USA) have been making securities regulations for 400 years. The important lesson of securities regulation is that it helps the "good" guys more than it hurts the bad guys. When I buy 100 shares of PZZA, I want to be reasonably confident that Papa Johns is cooking pizza and not the books. That confidence, or trust in the system, reduces friction that helps both buyers and sellers of securities.
      - Jabanga 9y ago
        A case for mandatory vaccination can be made, as it addresses public health threats, which are negative externalities. Meat inspection cannot. You can choose to eat only government certified meat and not suffer any ill effects from non-certified meat being available on the market. Just because you want products certified by a government body to be safe doesn't mean you have a right to force others to live according to your standards.
        dragonwriter 9y ago
        > A case for mandatory vaccination can be made, as it addresses public health threats, which are negative externalities. Meat inspection cannot. Meat inspection deals with a different failure of ideal markets than direct externalities, to wit, information asymmetry. However,the market inefficiency produced by information assymetry itself has negative externalities, so it's not unrelated.
        Jabanga 9y ago
        People, left to their own devices, manage complexity effectively. For example, most people don't understand how microprocessors work. But this is addressed through an effective and spontaneous process of delegating responsibility. The government can play a positive role in helping manage this complexity, by providing certification programs, and freely available public information. What it should not do is constrain the actions of individuals, by mandating that a particular standard be used.
        throwaway2048 9y ago
        There is a massive negative externality for allowing scammers to run free in a situation where the upfront ability to assess fitness-of-goods is lacking. https://en.wikipedia.org/wiki/The_Market_for_Lemons https://en.wikipedia.org/wiki/The_Market_for_Lemons the money quote being The cost of dishonesty, therefore, lies not only in the amount by which the purchaser is cheated; the cost also must include the loss incurred from driving legitimate business out of existence.
- Cshelton 9y ago
  Very smart people are scammed and conned all the time.
  - Jabanga 9y ago
    Of course. We don't restrict the rights of the entire population to engage in voluntary interactions to preempt crime. We punish actual criminals to deter other would-be criminals, and leave everyone else to be free. We don't require a publishing license because someone might use their right to free speech to libel someone else. We punish the libeler.
    - dgacmu 9y ago
      You realize that's not in the slightest bit true, don't you? For example: Under contract law, there are certain rights that _you are legally not permitted to give away_. You can't actually sell yourself into slavery. You can't contractually disclaim gross negligence on your part. You can't have a contract that unilaterally benefits one party without consideration provided for the other. You can't accept a contract while intoxicated. You can't contractually agree to something that is a crime. ... the list goes on.
      - Jabanga 9y ago
        >You realize that's not in the slightest bit true, don't you? What isn't true? >For example: Under contract law, there are certain rights that _you are legally not permitted to give away_. You can't actually sell yourself into slavery. A court will void contractual provisions like this, based on a comprehensive body of case law that establishes what constitutes consent. This is a universe away from what you're defending here, which is a federal agency prosecuting individuals because they entered into some investment transaction without 'permission' from said regulatory agency.
        dgacmu 9y ago
        You wrote: > Of course. We don't restrict the rights of the entire population to engage in voluntary interactions to preempt crime. I gave one example of many of the ways in which we absolutely do restrict the rights of the entire population to engage in voluntary interactions to preempt crime. We limit the types of contracts that everyone can engage in, to prevent a subset of them that would be used abusively. As another example, we place restrictions on freedom of assembly -- voluntary interactions of groups of people -- based upon location and time of day because of the potential to create a disturbance, not the fact of having done so. And so on.
- s73ver 9y ago
  And companies shouldn't feel emboldened to scam left and right.
  - Jabanga 9y ago
    Of course. Anyone that scams should be punished. That does not require introducing a license for engaging in some consensual activity, and prosecuting anyone that does this activity without the license. This fearful attitude that will sacrifice the liberty for the promise of security will leave you with neither.
- Asdfbla 9y ago
  Extreme libertarian views like yours have been rejected almost everywhere in the world. Maybe it's your opinion that allowing scammers to manipulate people is their basic right, but no one seems to share that sentiment.
  - Jabanga 9y ago
    You're not even representing my view accurately. My view is that scammers should be punished, not the entirety of the population on the premise of preempting crime. Rejecting a person's argument on the grounds that it's "extreme [insert label]" that "everyone rejects" is not constructive.
    - openasocket 9y ago
      What punishment is being met out on the population?
      - Jabanga 9y ago
        A couple examples: restricting them from soliciting investment without going through a $6 million compliance process for gaining approval to do an IPO. Restricting people from engaging in anonymous securities transactions with each other.
  - stale2002 9y ago
    If you don't want to deal with those scammers, no one is forcing you to do so. Just don't use cyptocurrencies. The only purpose of crytocurrencies is to get rid of a central authority in charge of everything. If you don't care about the fundamental feature and premise of crytocurrencies, then you are much better off using the regular financial system.
  - clarky07 9y ago
    Can't we simply punish the scammers, so as to warn others not to do the same? Generally speaking the regulation of the markets doesn't do all that much to protect individual investors. We just (sometimes, rarely) punish people after the fact. How many regular investors got screwed in 2008 and how many people went to jail?
siliconviking 9y ago
The degree to which most people in here have faith in our institutions bothers me. Detrimental to long term success -- how do you know? I am inclined to believe the opposite.
- mstodd 9y ago
  Same here. People need to pick up a basic Economics book. The government is not here to protect people, it's here to give people of influence special privileges. People should be able to take risks, it's what life is all about. People should also be able to develop their own private institutions to handle that risk. The government is impossible to complete with. If people are unhappy about being scammed in the market, that should be an opportunity for an entrepreneur to come in an help people not get scammed. The government prevents this

m777z 9y ago

Which is why most publicly-traded companies would get the SEC seal of approval in my hypothetical scenario--institutional investors (which I think own most of the U.S. stock market) would demand it.

Jabanga 9y ago

>but to protect U.S. citizens from being scammed all the time. US citizens shouldn't be treated like children that need to protected from their own stupidity.

isubkhankulov 9y ago
history has proven this sentiment wrong
- Jabanga 9y ago
  This is not a sentiment that can be proven wrong. It's a statement on basic rights. And history shows that attempts to control complex industries with cookie cutter rules imposed from on top create the most dysfunctional industries in the economy, namely finance, pharmaceuticals, and healthcare.
  - jnwatson 9y ago
    Much like vaccines, meat inspection, and building codes, we've forgotten what it's like without them. We (Great Britain and USA) have been making securities regulations for 400 years. The important lesson of securities regulation is that it helps the "good" guys more than it hurts the bad guys. When I buy 100 shares of PZZA, I want to be reasonably confident that Papa Johns is cooking pizza and not the books. That confidence, or trust in the system, reduces friction that helps both buyers and sellers of securities.
    - Jabanga 9y ago
      A case for mandatory vaccination can be made, as it addresses public health threats, which are negative externalities. Meat inspection cannot. You can choose to eat only government certified meat and not suffer any ill effects from non-certified meat being available on the market. Just because you want products certified by a government body to be safe doesn't mean you have a right to force others to live according to your standards.
      - dragonwriter 9y ago
        > A case for mandatory vaccination can be made, as it addresses public health threats, which are negative externalities. Meat inspection cannot. Meat inspection deals with a different failure of ideal markets than direct externalities, to wit, information asymmetry. However,the market inefficiency produced by information assymetry itself has negative externalities, so it's not unrelated.
        Jabanga 9y ago
        People, left to their own devices, manage complexity effectively. For example, most people don't understand how microprocessors work. But this is addressed through an effective and spontaneous process of delegating responsibility. The government can play a positive role in helping manage this complexity, by providing certification programs, and freely available public information. What it should not do is constrain the actions of individuals, by mandating that a particular standard be used.
      - throwaway2048 9y ago
        There is a massive negative externality for allowing scammers to run free in a situation where the upfront ability to assess fitness-of-goods is lacking. https://en.wikipedia.org/wiki/The_Market_for_Lemons https://en.wikipedia.org/wiki/The_Market_for_Lemons the money quote being The cost of dishonesty, therefore, lies not only in the amount by which the purchaser is cheated; the cost also must include the loss incurred from driving legitimate business out of existence.
Cshelton 9y ago
Very smart people are scammed and conned all the time.
- Jabanga 9y ago
  Of course. We don't restrict the rights of the entire population to engage in voluntary interactions to preempt crime. We punish actual criminals to deter other would-be criminals, and leave everyone else to be free. We don't require a publishing license because someone might use their right to free speech to libel someone else. We punish the libeler.
  - dgacmu 9y ago
    You realize that's not in the slightest bit true, don't you? For example: Under contract law, there are certain rights that _you are legally not permitted to give away_. You can't actually sell yourself into slavery. You can't contractually disclaim gross negligence on your part. You can't have a contract that unilaterally benefits one party without consideration provided for the other. You can't accept a contract while intoxicated. You can't contractually agree to something that is a crime. ... the list goes on.
    - Jabanga 9y ago
      >You realize that's not in the slightest bit true, don't you? What isn't true? >For example: Under contract law, there are certain rights that _you are legally not permitted to give away_. You can't actually sell yourself into slavery. A court will void contractual provisions like this, based on a comprehensive body of case law that establishes what constitutes consent. This is a universe away from what you're defending here, which is a federal agency prosecuting individuals because they entered into some investment transaction without 'permission' from said regulatory agency.
      - dgacmu 9y ago
        You wrote: > Of course. We don't restrict the rights of the entire population to engage in voluntary interactions to preempt crime. I gave one example of many of the ways in which we absolutely do restrict the rights of the entire population to engage in voluntary interactions to preempt crime. We limit the types of contracts that everyone can engage in, to prevent a subset of them that would be used abusively. As another example, we place restrictions on freedom of assembly -- voluntary interactions of groups of people -- based upon location and time of day because of the potential to create a disturbance, not the fact of having done so. And so on.
s73ver 9y ago
And companies shouldn't feel emboldened to scam left and right.
- Jabanga 9y ago
  Of course. Anyone that scams should be punished. That does not require introducing a license for engaging in some consensual activity, and prosecuting anyone that does this activity without the license. This fearful attitude that will sacrifice the liberty for the promise of security will leave you with neither.
Asdfbla 9y ago
Extreme libertarian views like yours have been rejected almost everywhere in the world. Maybe it's your opinion that allowing scammers to manipulate people is their basic right, but no one seems to share that sentiment.
- Jabanga 9y ago
  You're not even representing my view accurately. My view is that scammers should be punished, not the entirety of the population on the premise of preempting crime. Rejecting a person's argument on the grounds that it's "extreme [insert label]" that "everyone rejects" is not constructive.
  - openasocket 9y ago
    What punishment is being met out on the population?
    - Jabanga 9y ago
      A couple examples: restricting them from soliciting investment without going through a $6 million compliance process for gaining approval to do an IPO. Restricting people from engaging in anonymous securities transactions with each other.
- stale2002 9y ago
  If you don't want to deal with those scammers, no one is forcing you to do so. Just don't use cyptocurrencies. The only purpose of crytocurrencies is to get rid of a central authority in charge of everything. If you don't care about the fundamental feature and premise of crytocurrencies, then you are much better off using the regular financial system.
- clarky07 9y ago
  Can't we simply punish the scammers, so as to warn others not to do the same? Generally speaking the regulation of the markets doesn't do all that much to protect individual investors. We just (sometimes, rarely) punish people after the fact. How many regular investors got screwed in 2008 and how many people went to jail?

siliconviking 9y ago

The degree to which most people in here have faith in our institutions bothers me. Detrimental to long term success -- how do you know? I am inclined to believe the opposite.

mstodd 9y ago
Same here. People need to pick up a basic Economics book. The government is not here to protect people, it's here to give people of influence special privileges. People should be able to take risks, it's what life is all about. People should also be able to develop their own private institutions to handle that risk. The government is impossible to complete with. If people are unhappy about being scammed in the market, that should be an opportunity for an entrepreneur to come in an help people not get scammed. The government prevents this