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by pgayed 6y ago

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AnimalMuppet 6y ago
Suppose we stop assuming that. Then what? Do you have a concrete proposal or position or something to advocate? If so, what?
- pgayed 6y ago
  [ retracted ]
  - CincinnatiMan 6y ago
    I'm a taxpayer and have no idea how to assess the risk held by a bank haha.
    - pgayed 6y ago
      Then you shouldn't entrust your money to that business. The problem is the false sense of safety implied by regulatory control. Rather than inducing market incentives for transparency and increasing consumer intelligence over time, regulatory bodies want you to “just let us handle the tough stuff.”
    - CryptoPunk 6y ago
      But you have a way to assess the effectiveness of politicians at appointing the heads of regulatory agencies? Consumers know more about the TV they're going to buy than the bank they're going to deposit with, and that's due to the moral hazard created by taxpayer subsidized risk management by regulatory agencies and deposit insurance. The FDIC's risk socialization function increases systemic risk: https://www.nber.org/papers/w22223 https://www.nber.org/papers/w22223
      - pgayed 6y ago
        Thank you. I am getting destroyed in this thread. I thought this was hacker news. I don't understand the level of confidence being accorded here to centralizing bodies.
        CryptoPunk 6y ago
        To the layman, theories on the efficacy of free markets sounds like a type of fundemantalism, and economists who promulgate it are suspected of being coopted to promote the interests of a corporate elite. Anti-free-market-ism is the anti-vaxxerism of the intelligentsia. To this group, anti-free-market-ism is seen as a form of contrarianism, that open-minded/free-spirited people engage in.
        sgt101 6y ago
        "Anti-free-market-ism is the anti-vaxxerism of the intelligentsia." It isn't - the fact is that the "free market" is in fact a market shackled to whoever has the capital to manipulate it. That's seen in every market in history sooner or later. The time and extent of capital dominance is determined by regulation - the more regulation, the later and less rigged in favour of the richest participant the market is. These are just facts - free markets aren't free, they aren't efficient and they aren't good. Unfortunately the known alternative is a fudge.
        deleted 6y ago
        [deleted]
        CryptoPunk 6y ago
        >>These are just facts It's no such thing. It's quackery rejected by experts.
        sgt101 6y ago
        You can see it; under stress markets fail to clear because the actors stop acting rationally. This leaves market participants holding assets that in theory they should have been able to offload. This is because free market theory depends on rational actors working without friction and with perfect information. In reality the actors are irrational, the process has friction and information is horded and distributed unequally with noise.
  - AnimalMuppet 6y ago
    How many taxpayers do you think are more capable than the regulatory boards at assessing bank risk? Sure, the number is not zero. But it's not very high. If that's your answer, it's basically "good luck, suckers", which is not a very good answer at all.
    - pgayed 6y ago
      You're assuming consumer intelligence is a static property. You're also arguing a false dichotomy. (“Either taxpayers have to get smart, which they aren't, or we have to use regulators.”) Getting screwed is part of any learning process, and lessons about individual cases can be encoded at large; I'm just arguing that regulatory bodies are one of the worst ways to do that. I'd rather have 1,000 independent pen testers examine a bank[0] (and be compensated for it) than some operating manual–laden bureaucracy applying the same standard test every shark working at a bank knows how to side-step. An infinite regress of regulation is a waste of human intellect and creativity. ----------- [0]: Imagine a bank in the style of an Open-Access Startup where the books and assets are laid bare, either to the public at large or their clients. This is no longer practically infeasible in the era of the crypto-ledgers but what engineer in their right mind would willingly enter the total regulation shitshow that is today's American banking industry? The best engineers have choice, so they go elsewhere.
      - awat 6y ago
        In fair turn I would say you are assuming if enough people are “screwed” they become interested in learning instead of turning to violence or some other sort of retribution.
        pgayed 6y ago
        No, I'm assuming some minority of screwed users will build instead of "destroy". Building something fixes knowledge and know-how into something others can benefit from, at scale. Destruction does not scale. People do not side with destroyers. They side with people who build alternatives. (No one said it has to or will be perfect. It just has to be better than whatever preceded it.)
- pgayed 6y ago
  The thing that reveals the most about voter bias on hn is that the thread that spawned the most replies has a source comment with score = 0. (It would have been less than zero if not retracted.)

[ retracted ]

by pgayed 6y ago

[ retracted ]

Suppose we stop assuming that. Then what? Do you have a concrete proposal or position or something to advocate? If so, what?

pgayed 6y ago
[ retracted ]
- CincinnatiMan 6y ago
  I'm a taxpayer and have no idea how to assess the risk held by a bank haha.
  - pgayed 6y ago
    Then you shouldn't entrust your money to that business. The problem is the false sense of safety implied by regulatory control. Rather than inducing market incentives for transparency and increasing consumer intelligence over time, regulatory bodies want you to “just let us handle the tough stuff.”
  - CryptoPunk 6y ago
    But you have a way to assess the effectiveness of politicians at appointing the heads of regulatory agencies? Consumers know more about the TV they're going to buy than the bank they're going to deposit with, and that's due to the moral hazard created by taxpayer subsidized risk management by regulatory agencies and deposit insurance. The FDIC's risk socialization function increases systemic risk: https://www.nber.org/papers/w22223 https://www.nber.org/papers/w22223
    - pgayed 6y ago
      Thank you. I am getting destroyed in this thread. I thought this was hacker news. I don't understand the level of confidence being accorded here to centralizing bodies.
      - CryptoPunk 6y ago
        To the layman, theories on the efficacy of free markets sounds like a type of fundemantalism, and economists who promulgate it are suspected of being coopted to promote the interests of a corporate elite. Anti-free-market-ism is the anti-vaxxerism of the intelligentsia. To this group, anti-free-market-ism is seen as a form of contrarianism, that open-minded/free-spirited people engage in.
        sgt101 6y ago
        "Anti-free-market-ism is the anti-vaxxerism of the intelligentsia." It isn't - the fact is that the "free market" is in fact a market shackled to whoever has the capital to manipulate it. That's seen in every market in history sooner or later. The time and extent of capital dominance is determined by regulation - the more regulation, the later and less rigged in favour of the richest participant the market is. These are just facts - free markets aren't free, they aren't efficient and they aren't good. Unfortunately the known alternative is a fudge.
        deleted 6y ago
        [deleted]
        CryptoPunk 6y ago
        >>These are just facts It's no such thing. It's quackery rejected by experts.
        sgt101 6y ago
        You can see it; under stress markets fail to clear because the actors stop acting rationally. This leaves market participants holding assets that in theory they should have been able to offload. This is because free market theory depends on rational actors working without friction and with perfect information. In reality the actors are irrational, the process has friction and information is horded and distributed unequally with noise.
- AnimalMuppet 6y ago
  How many taxpayers do you think are more capable than the regulatory boards at assessing bank risk? Sure, the number is not zero. But it's not very high. If that's your answer, it's basically "good luck, suckers", which is not a very good answer at all.
  - pgayed 6y ago
    You're assuming consumer intelligence is a static property. You're also arguing a false dichotomy. (“Either taxpayers have to get smart, which they aren't, or we have to use regulators.”) Getting screwed is part of any learning process, and lessons about individual cases can be encoded at large; I'm just arguing that regulatory bodies are one of the worst ways to do that. I'd rather have 1,000 independent pen testers examine a bank[0] (and be compensated for it) than some operating manual–laden bureaucracy applying the same standard test every shark working at a bank knows how to side-step. An infinite regress of regulation is a waste of human intellect and creativity. ----------- [0]: Imagine a bank in the style of an Open-Access Startup where the books and assets are laid bare, either to the public at large or their clients. This is no longer practically infeasible in the era of the crypto-ledgers but what engineer in their right mind would willingly enter the total regulation shitshow that is today's American banking industry? The best engineers have choice, so they go elsewhere.
    - awat 6y ago
      In fair turn I would say you are assuming if enough people are “screwed” they become interested in learning instead of turning to violence or some other sort of retribution.
      - pgayed 6y ago
        No, I'm assuming some minority of screwed users will build instead of "destroy". Building something fixes knowledge and know-how into something others can benefit from, at scale. Destruction does not scale. People do not side with destroyers. They side with people who build alternatives. (No one said it has to or will be perfect. It just has to be better than whatever preceded it.)
pgayed 6y ago
The thing that reveals the most about voter bias on hn is that the thread that spawned the most replies has a source comment with score = 0. (It would have been less than zero if not retracted.)