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It's better to describe regulators as captured rather than complicit. Regulators have no chance when the people they are supposed to regulate have hundreds of

It's better to describe regulators as captured rather than complicit. Regulators have no chance when the people they are supposed to regulate have hundreds of times more power than the regulators. Allowing unlimited wealth concentration guarantees that the most powerful private interests are always more powerful than government regulators.

smsm42 14y ago
Power would matter a lot if regulators knew exactly what to do, but lacked power to enforce it. Unfortunately, most frequently regulators have very little idea about where the next crisis would come from (count how many times "unexpectedly" is featured in economical reporting) and what to do to prevent it, and there are many contradictory opinions on these subjects. Often they even have very little idea about what exactly major players are doing and why, and lack the ability to foresee all the risks. Moreover, since regulators are appointed by politicians (there's no other way to do it in democratic society) they of course would be heavily influenced by political considerations, which may be not to the best of the regulated industry - e.g., if politicians want more people have access to certain loans, regulators would force banks to accept more risk on such loans, even if it doesn't make financial sense to them. And then if such loans blow up, the bankers would have a valid claim to be bailed out - after all, didn't regulators ask them to accept such risks?
- forensic 14y ago
  All of these are solvable problems. 1. Regulators lack visibility? Give them investigatory powers. 2. Regulators can't predict the next crisis? Maybe with bigger budgets they would have higher quality employees. All the talent works for the hedge funds who pay them literally hundreds of times more. If the person being regulated makes $1M/year the regulator needs more pay than that or there will be talent asymmetry. Obviously, the key issue here is that the financial sector gets paid way too much, way more than the value it produces. The profits are based on a rigged financial system. 3. Regulators appointed by politicians due to democracy? Cancel democracy and implement meritocracy. Require positions of power to be filled by civil servants with proven skill who have to pass tests, rather than politicians elected by the stupid hordes. If the masses are going to elect people that are provably useless, the masses should be stripped of their voting privileges for their own good. Democracy is not a panacea. Meritocracy is better. 4. Banks upset that the gov causes them to fail? Nationalize the fucking banks, duh. Banking is not high tech and should not be high tech. It should be a public utility that is the most conservatively run thing in the economy. Banks should be separated from investment entirely. Government should invest in high tech but only using the judgment of highly qualified meritocrats with proven knowledge elected by their specialist peers to oversee government investment within that specialty. Private investors should have no connection to banking. The root of all social problems is the fact that the most qualified and knowledgable academics and technologists have zero political power, while Chrstian pseudo-preachers hold all of it. Intelligent people (e.g. Those on hacker news) should be pushing technocracy and meritocracy and disempowerment of the idiot hordes who don't even know how to act in their own self-interet.
  - smsm42 14y ago
    1. They should know what to investigate. In most cases, they don't until it's too late. Amount of financial transactions in average bank is tremendous, and unless you know exactly what to look for it's beyond shadow of possibility to make sense of all of this data and see if there's any problem somewhere there. You'd need regulatory agencies with personnel 10 times more than whole personnel of all banks. Who'd pay for that? 2. It's not a question of budgets. Somehow some people got the idea money is all-powerful and enough money solves any problem. That's BS. Nobody knows that. And yes, bankers don't know that too - do you think they enjoy being nearly bankrupt? If they could properly predict such things, they would. They can't, however, so instead they do what they can - dance on the line as long as they can and cry for help when the time comes. 3. Yeah, right. And who will be determining "merits", you? No, thanks. I'd rathe take my chance with the stupid hordes - at least they are not so swollen with self-importance as to deny everybody who disagrees with them basic human rights of self-rule and control over their own destiny. All these arguments that some people should be slaves "for their own good" and have no rights except the right to be ruled by kind masters - we are way past that. Sorry, those times won't return, abandon that dream. 4. Nationalized industries work really great, duh. Of course, being controlled by the state gives people superpowers, so industry that was badly managed and corrupt as private, of course will become clean and well-managed as government enterprise. After all, government enterprises are universally known for their excellent management and total lack of corruption, especially when it comes to managing billions of dollars. Duh. >> The root of all social problems is the fact that the most qualified and knowledgable academics and technologists have zero political power, while Chrstian pseudo-preachers hold all of it. This is completely stupid and false. The social problems have multiple roots, and very little of them have anything to do with technologists and academics having little power. Academics, technologists and social engineers of all kids have huge powers and access to enormous budgets and overwhelming regulatory powers. Most of their social engineering enterprises, however, meet with disastrous results, exactly because every complex problem has cheap, obvious, easy to understand wrong solution. And people like you grab at it and yell "oh, that's simple, let's nationalize all banks and appoint more bureaucrats to run financial industry, that would guarantee us eternal prosperity". No, it won't, sorry. The "idiots" are acting exactly in their self-interest when they are ignoring advice like yours - because what you are advising is a recipe for disaster and this was proven by history many times. Unfortunately, they don't always do that - sometimes the simple wrong solution is too tempting. They - we - always pay dearly for that.

smsm42 14y ago

Power would matter a lot if regulators knew exactly what to do, but lacked power to enforce it. Unfortunately, most frequently regulators have very little idea about where the next crisis would come from (count how many times "unexpectedly" is featured in economical reporting) and what to do to prevent it, and there are many contradictory opinions on these subjects. Often they even have very little idea about what exactly major players are doing and why, and lack the ability to foresee all the risks. Moreover, since regulators are appointed by politicians (there's no other way to do it in democratic society) they of course would be heavily influenced by political considerations, which may be not to the best of the regulated industry - e.g., if politicians want more people have access to certain loans, regulators would force banks to accept more risk on such loans, even if it doesn't make financial sense to them. And then if such loans blow up, the bankers would have a valid claim to be bailed out - after all, didn't regulators ask them to accept such risks?

forensic 14y ago
All of these are solvable problems. 1. Regulators lack visibility? Give them investigatory powers. 2. Regulators can't predict the next crisis? Maybe with bigger budgets they would have higher quality employees. All the talent works for the hedge funds who pay them literally hundreds of times more. If the person being regulated makes $1M/year the regulator needs more pay than that or there will be talent asymmetry. Obviously, the key issue here is that the financial sector gets paid way too much, way more than the value it produces. The profits are based on a rigged financial system. 3. Regulators appointed by politicians due to democracy? Cancel democracy and implement meritocracy. Require positions of power to be filled by civil servants with proven skill who have to pass tests, rather than politicians elected by the stupid hordes. If the masses are going to elect people that are provably useless, the masses should be stripped of their voting privileges for their own good. Democracy is not a panacea. Meritocracy is better. 4. Banks upset that the gov causes them to fail? Nationalize the fucking banks, duh. Banking is not high tech and should not be high tech. It should be a public utility that is the most conservatively run thing in the economy. Banks should be separated from investment entirely. Government should invest in high tech but only using the judgment of highly qualified meritocrats with proven knowledge elected by their specialist peers to oversee government investment within that specialty. Private investors should have no connection to banking. The root of all social problems is the fact that the most qualified and knowledgable academics and technologists have zero political power, while Chrstian pseudo-preachers hold all of it. Intelligent people (e.g. Those on hacker news) should be pushing technocracy and meritocracy and disempowerment of the idiot hordes who don't even know how to act in their own self-interet.
- smsm42 14y ago
  1. They should know what to investigate. In most cases, they don't until it's too late. Amount of financial transactions in average bank is tremendous, and unless you know exactly what to look for it's beyond shadow of possibility to make sense of all of this data and see if there's any problem somewhere there. You'd need regulatory agencies with personnel 10 times more than whole personnel of all banks. Who'd pay for that? 2. It's not a question of budgets. Somehow some people got the idea money is all-powerful and enough money solves any problem. That's BS. Nobody knows that. And yes, bankers don't know that too - do you think they enjoy being nearly bankrupt? If they could properly predict such things, they would. They can't, however, so instead they do what they can - dance on the line as long as they can and cry for help when the time comes. 3. Yeah, right. And who will be determining "merits", you? No, thanks. I'd rathe take my chance with the stupid hordes - at least they are not so swollen with self-importance as to deny everybody who disagrees with them basic human rights of self-rule and control over their own destiny. All these arguments that some people should be slaves "for their own good" and have no rights except the right to be ruled by kind masters - we are way past that. Sorry, those times won't return, abandon that dream. 4. Nationalized industries work really great, duh. Of course, being controlled by the state gives people superpowers, so industry that was badly managed and corrupt as private, of course will become clean and well-managed as government enterprise. After all, government enterprises are universally known for their excellent management and total lack of corruption, especially when it comes to managing billions of dollars. Duh. >> The root of all social problems is the fact that the most qualified and knowledgable academics and technologists have zero political power, while Chrstian pseudo-preachers hold all of it. This is completely stupid and false. The social problems have multiple roots, and very little of them have anything to do with technologists and academics having little power. Academics, technologists and social engineers of all kids have huge powers and access to enormous budgets and overwhelming regulatory powers. Most of their social engineering enterprises, however, meet with disastrous results, exactly because every complex problem has cheap, obvious, easy to understand wrong solution. And people like you grab at it and yell "oh, that's simple, let's nationalize all banks and appoint more bureaucrats to run financial industry, that would guarantee us eternal prosperity". No, it won't, sorry. The "idiots" are acting exactly in their self-interest when they are ignoring advice like yours - because what you are advising is a recipe for disaster and this was proven by history many times. Unfortunately, they don't always do that - sometimes the simple wrong solution is too tempting. They - we - always pay dearly for that.