Tag Archives: ethics

It’s Not A New Idea

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Adam Smith articulated it two and a half centuries ago, for instance.

The prudent man always studies seriously and earnestly to understand whatever he professes to understand, and not merely to persuade other people that he understands it; and though his talents may not always be very brilliant, they are always perfectly genuine. He neither endeavours to impose upon you by the cunning devices of an artful impostor, nor by the arrogant airs of an assuming pedant, nor by the confident assertions of a superficial and impudent pretender.

 

h/t The Wall Street Journal

“Retail Investor”

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The Left’s new obfuscatory synonym for “dumb Americans.”

US securities regulators, under pressure to demonstrate they have a handle on potential risks in the asset-management industry, are about to crack down on the use of derivatives in certain funds sold to the public, worried that some products are too precarious for retail investors.

Because us dumb Americans are just too ignorant to make our own investment decisions. We need the Progressive Know Betters to tell us how we should make some investments, and to deny us access to other investments.

[U]nder pressure to demonstrate they have a handle on potential risks in the asset-management industry: this is actually the problem. The securities regulators, themselves, have no idea of the risks of derivatives. They showed this risk all through the Panic of 2008, and they’ve done nothing substantive to correct their failure.

If these regulators were serious about the precariousness of (some) derivatives, they’d require the chaining of them and the arithmetic underlying them to be made public so that all investors—institutional and dumb Americans retail alike—could make our own assessments. Without Big Government Know Better interference.

The Pseudo-Logic of the Climatistas

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Fat Head has a piece about the climate by Tom Naughton (the head fat head); it’s well worth the read.

What’s interesting to me, though, is his comment in the comment stream of his post.

Penn & Teller got hundreds of people at a environmental conference to sign a petition to ban dihydrogen monoxide—including the “science” information officer.

The real problem with this is that P&T ignored the at least equally pervasive problem of hydrogen hydroxyl. This extremely dangerous chemical already is pervasive in our atmosphere, in our lakes and rivers, and in our oceans. If allowed to accumulate too much in our oceans, in particular, it’ll lead to relative desalination of those critical waters, poisoning salt water life, right down to the sea water dependent single-celled organisms that are the very foundation of Gaia’s life-bearing ecology.

Why didn’t that Science Information Officer call P&T on this danger, instead of meekly signing their limited petition? It’s for the planet, after all, and all the children who live on it.

More Government Overreach

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This time, by the Federal Reserve Bank. As most of you already know, the Fed runs “stress tests” to determine whether financial institutions can survive an economic dislocation of the magnitude of the Panic of 2008. Among other things, if the institution fails the stress, the Fed dictates to the institution the dividends it will be allowed to pay until the conditions leading to the alleged failure are corrected.

That’s a serious overreach; it is a government entity presuming to intrude itself into a private enterprise decision, a decision that the free market is fully capable of sanctioning or accepting without Big Government involvement.

It’s worse than that, though. Fed Board of Governors member Daniel Tarullo has exposed the more massive overreach.

Even though we do not publicly release the models, we have put systems in place to ensure oversight and accountability[.]

The Fed uses non-peer reviewed, secret models to make its assessments. Because of that secretiveness, we have no way of assessing the adequacy of the Fed’s “oversight and accountability” of those models. We also have no way of assessing the accuracy—even the legitimacy—of those models.

Tarullo’s excuse?

…disclosing the models could give banks an opportunity to game them….

Because the financial institutions don’t already game the system. Like nobody ever games any system. No, of course we do. It’s what competition does. Gaming—free market competition—is innovation, prosperity production. And, yes, the instability of creative destruction, which leads to breakout innovation and prosperity production.

It’s a disingenuous excuse for a disingenuous practice. The deliberate lack of transparency of this arm of the Big Government is of a piece with the general secretiveness of this Big Government.

It’s necessary secretiveness, however. If the public knew more about these models, knew something of how they work (or fail to work), we might do more than force corrections to them. We might do away with the Fed’s interference in private business decisions altogether, and that would reduce the power of the men in Big Government.

Awfully Decent of Him

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The Obama administration is offering to send state governors personalized reports with detailed information about refugees that have been resettled in their state so far this year.

Now, in the aftermath of 30 governors saying they’d do what they could to block resettlement of Syrian refugees in their states (because the governors don’t trust the adequacy of this administration’s vetting), President Barack Obama’s Chief of Staff Denis McDonough is saying that State will provide letters to each governor providing information “on refugees resettled in the last month and throughout the year so far.” Furthermore, State will maintain a passworded Web site on which it will make monthly updates to this information and that the updates would “break down refugees by nationality, gender and age range.”

That’s nice, but it begs a couple of questions. Why couldn’t this information have been made regularly available over the last seven years (or longer)? Why can’t those older data be provided now and kept current? Why can’t the currently promised data include resettlement location information?