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Assuming this comment is a response to what the article said, your reasoning is circular. Lessig blames both the change in laws/regulations and Goldman going pu

Assuming this comment is a response to what the article said, your reasoning is circular. Lessig blames both the change in laws/regulations and Goldman going public for the issues. We can't nail Goldman with fraud under the existing laws. That's his point: laws and regulations should be reverted/changed to criminalize some of their current behavior. Professional Companies are companies that provide professional services. These are companies that are hired because they are licensed to do something. They need to be licensed because their field is sufficiently complex or opaque that their clients cannot evaluate their competence or trustworthiness. He suggests these company should not be able to go public because this class of companies cannot be fairly evaluated by the market without creating perverse incentives.

twoodfin 15y ago
I'm sorry, Lessig didn't name a single repealed regulation in his piece, nor how maintaining such a regulation would have concretely affected some action that Goldman took. As I said, it's hand-waving.
- Hubbert 15y ago
  Aside from the rule against incorporating, the Glass-Steagall Act was very helpful in preventing the Too Big To Fail bailouts for many decades. While the author may have omitted some specifics (in part due to column length), to those who follow the industry even casually, it's hard not to consider the changes self-evident, like a statement "CPUs are more powerful today than in 1990". Even if the regulations were unchanged, top levels of government are almost 100% Goldman alumni and/or future Goldman people, so enforcement is comical. Imagine if Ford and GM executives had been running the EPA for the last 20 years.
anamax 15y ago
> These are companies that are hired because they are licensed to do something. What fraction of GS biz actually involves licensed activities? Yes, stock brokers are licensed, but bankers aren't. Most types of financial advisors aren't licensed. Are any traders licensed?
- hncommenter13 15y ago
  This is not quite correct. Senior bankers (and certainly senior institutional salespeople, of which Greg Smith was one) are typically required by their firms to be licensed by FINRA. Certainly not all investment bankers or traders are required to be licensed (and I don't think they should be), but a significant fraction are. Also, fwiw, mortgage brokers and lawyers are required to be licensed in almost every state. Licensing--or lack thereof--has little to do with ethical behavior.
  - Drbble 15y ago
    Licensing almost always includes a legal commitment to specific ethical behaviors, fiduciary duty and the like. That is one of the main differences between licensed professionals and flea market vendors. Doctors, lawyers, and engineers all make specific ethical commitments in order to win authorization to practice.
    - hncommenter13 15y ago
      That's true, almost every license for any profession (including everything from accountants to sports agents to, in some states, interior decorators and hair braiders) has an ethics component. My point is that it's trivial to find examples of unethical behavior by folks with licenses, so clearly the license alone isn't sufficient. Many bankers are already licensed, and licensing won't change the behavior of the ones inclined to take huge risks. Maybe it helps at the margin, but it's not a cure all by any means.

twoodfin 15y ago

I'm sorry, Lessig didn't name a single repealed regulation in his piece, nor how maintaining such a regulation would have concretely affected some action that Goldman took. As I said, it's hand-waving.

Hubbert 15y ago
Aside from the rule against incorporating, the Glass-Steagall Act was very helpful in preventing the Too Big To Fail bailouts for many decades. While the author may have omitted some specifics (in part due to column length), to those who follow the industry even casually, it's hard not to consider the changes self-evident, like a statement "CPUs are more powerful today than in 1990". Even if the regulations were unchanged, top levels of government are almost 100% Goldman alumni and/or future Goldman people, so enforcement is comical. Imagine if Ford and GM executives had been running the EPA for the last 20 years.

anamax 15y ago

> These are companies that are hired because they are licensed to do something. What fraction of GS biz actually involves licensed activities? Yes, stock brokers are licensed, but bankers aren't. Most types of financial advisors aren't licensed. Are any traders licensed?

hncommenter13 15y ago
This is not quite correct. Senior bankers (and certainly senior institutional salespeople, of which Greg Smith was one) are typically required by their firms to be licensed by FINRA. Certainly not all investment bankers or traders are required to be licensed (and I don't think they should be), but a significant fraction are. Also, fwiw, mortgage brokers and lawyers are required to be licensed in almost every state. Licensing--or lack thereof--has little to do with ethical behavior.
- Drbble 15y ago
  Licensing almost always includes a legal commitment to specific ethical behaviors, fiduciary duty and the like. That is one of the main differences between licensed professionals and flea market vendors. Doctors, lawyers, and engineers all make specific ethical commitments in order to win authorization to practice.
  - hncommenter13 15y ago
    That's true, almost every license for any profession (including everything from accountants to sports agents to, in some states, interior decorators and hair braiders) has an ethics component. My point is that it's trivial to find examples of unethical behavior by folks with licenses, so clearly the license alone isn't sufficient. Many bankers are already licensed, and licensing won't change the behavior of the ones inclined to take huge risks. Maybe it helps at the margin, but it's not a cure all by any means.