3 ms·

I think it comes back to Fight Club: > Narrator: A new car built by my company leaves somewhere traveling at 60 mph. The rear differential locks up. The car cr

by wand3r 5y ago

I think it comes back to Fight Club: > Narrator: A new car built by my company leaves somewhere traveling at 60 mph. The rear differential locks up. The car crashes and burns with everyone trapped inside. Now, should we initiate a recall? Take the number of vehicles in the field, A, multiply by the probable rate of failure, B, multiply by the average out-of-court settlement, C. A times B times C equals X. If X is less than the cost of a recall, we don't do one. If the cost of the fine is less than the profit that can be made by ignoring it, it will get ignored. Especially because banks seem to have privatized profits and socialized losses. So I don’t think it should be necessarily proportional to a companies size but certainly a multiple of the cost of the externality. For example, if an oil company gets caught polluting, they should pay a big multiple of the damages so that it is ALWAYS cheaper ti invest in doing the right thing. Also, the SEC is not a particularly popular organization and I think they have lost a lot of trust (if they ever really had any)

goopthink 5y ago
I think that's absolutely and cynically correct. For example: there is a concept of parking tickets with fines. The fines are set to discourage certain behaviors while also not being cruel and unusual. Some people will never park "illegally" while others consider parking tickets to be the unfortunate risk or consequence of how they live their lives and do their jobs. The same is true for all penalties, period. This cynical calculus should be separated from how we feel about the organizations that commit things that result in fines. It's really easy to hate on banks and believe that every fine is justified and should actually be way bigger. Pitchforks and burning down the barn, ya know? But someone somewhere decided that calculus of appropriateness based on a variety of factors, and it is the lowercase-p political process to push for changes based on outcomes we see. But the pendulum swings both ways. China is an example of a country where if a company goes against government rules it can be dissolved, its leaders arrested and thrown in prison, based on criteria they have calibrated politically. Or in some other countries, you may be beheaded for social infractions. Not trying to reduce this to absurd (but real) logical extremes, but highlighting that this is precisely the difficult balance folks try to find, and our sense of proportionality is often affected by the current popular conception of them as an industry or as an individual company/person. I.e., just as many people hate on banks and think they should be punished higher, they turn around express complete disbelief at "unfair" fines and laws that are broken by innovators that run faster than regulations allow (read: tesla, uber, airbnb, etc). Sometimes we collectively feel fines are justified, sometimes not, sometimes too high, sometimes too low. Your calibration may vary.
- luckylion 5y ago
  > But someone somewhere decided that calculus of appropriateness based on a variety of factors, and it is the lowercase-p political process to push for changes based on outcomes we see. Isn't it likely that this someone now works for a large bank and directly profits from their previous generous decisions?

by wand3r 5y ago

goopthink 5y ago

I think that's absolutely and cynically correct. For example: there is a concept of parking tickets with fines. The fines are set to discourage certain behaviors while also not being cruel and unusual. Some people will never park "illegally" while others consider parking tickets to be the unfortunate risk or consequence of how they live their lives and do their jobs. The same is true for all penalties, period. This cynical calculus should be separated from how we feel about the organizations that commit things that result in fines. It's really easy to hate on banks and believe that every fine is justified and should actually be way bigger. Pitchforks and burning down the barn, ya know? But someone somewhere decided that calculus of appropriateness based on a variety of factors, and it is the lowercase-p political process to push for changes based on outcomes we see. But the pendulum swings both ways. China is an example of a country where if a company goes against government rules it can be dissolved, its leaders arrested and thrown in prison, based on criteria they have calibrated politically. Or in some other countries, you may be beheaded for social infractions. Not trying to reduce this to absurd (but real) logical extremes, but highlighting that this is precisely the difficult balance folks try to find, and our sense of proportionality is often affected by the current popular conception of them as an industry or as an individual company/person. I.e., just as many people hate on banks and think they should be punished higher, they turn around express complete disbelief at "unfair" fines and laws that are broken by innovators that run faster than regulations allow (read: tesla, uber, airbnb, etc). Sometimes we collectively feel fines are justified, sometimes not, sometimes too high, sometimes too low. Your calibration may vary.

luckylion 5y ago
> But someone somewhere decided that calculus of appropriateness based on a variety of factors, and it is the lowercase-p political process to push for changes based on outcomes we see. Isn't it likely that this someone now works for a large bank and directly profits from their previous generous decisions?