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Or it would force people to take draconian steps to hinder any investigation. Threatening to throw individuals in prison for profitable but undesirable behavio

Or it would force people to take draconian steps to hinder any investigation. Threatening to throw individuals in prison for profitable but undesirable behavior rarely seems to get much done. Consider the war on drugs, if you want. You can make felons out of a lot of people, but if the profit motive is strong enough, that's just going to encourage people to do more to not get caught.

easyat 7y ago
This argument can apply to any means to constrain profit motivation for the benefit of society. Equating punishing why collar criminal to mainly impoverished people selling or using drugs is a massive simplification It's similar to why tax a corporation? They will just move elsewhere. Also, a dubious assertion. Not all corporation will simply pack up and move out of an economy like the USA. Or why raise minimum wage? It'll cause an equal rise in inflation. There is no law stating the inflation will be exactly proportional to rise in wages.
- SpicyLemonZest 7y ago
  Right, it's a pretty general argument. A good regulatory system can't just threaten to throw CEOs in jail whenever a bad thing happens and we think they should've stopped it. You have to keep track of the incentives you're establishing, and make sure they encourage people to do what you want and not do what you don't want.
  - easyat 7y ago
    Agreed. But to say that there shouldn't be more mechanisms to disincentive this behavior because they will simply be skirted is self-defeating. Why have any regulations?
    - SpicyLemonZest 7y ago
      Agreed, but the point is that this particular mechanism doesn't disincentivize the fraud. The CEO of Wells Fargo has pretty much no power to stop an individual sales rep from lying on an account form, and neither that sales rep nor their manager is going to stop lying because we've threatened the CEO with jail time. The only thing the CEO could do to reduce their risk of going to jail is try and stop investigations from turning up evidence of fraud.

easyat 7y ago

This argument can apply to any means to constrain profit motivation for the benefit of society. Equating punishing why collar criminal to mainly impoverished people selling or using drugs is a massive simplification It's similar to why tax a corporation? They will just move elsewhere. Also, a dubious assertion. Not all corporation will simply pack up and move out of an economy like the USA. Or why raise minimum wage? It'll cause an equal rise in inflation. There is no law stating the inflation will be exactly proportional to rise in wages.

SpicyLemonZest 7y ago
Right, it's a pretty general argument. A good regulatory system can't just threaten to throw CEOs in jail whenever a bad thing happens and we think they should've stopped it. You have to keep track of the incentives you're establishing, and make sure they encourage people to do what you want and not do what you don't want.
- easyat 7y ago
  Agreed. But to say that there shouldn't be more mechanisms to disincentive this behavior because they will simply be skirted is self-defeating. Why have any regulations?
  - SpicyLemonZest 7y ago
    Agreed, but the point is that this particular mechanism doesn't disincentivize the fraud. The CEO of Wells Fargo has pretty much no power to stop an individual sales rep from lying on an account form, and neither that sales rep nor their manager is going to stop lying because we've threatened the CEO with jail time. The only thing the CEO could do to reduce their risk of going to jail is try and stop investigations from turning up evidence of fraud.