

How Washington Abetted the Bank Job - tokenadult
http://www.nytimes.com/2010/04/04/opinion/04koniak.html

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T_S_
The article reiterates the authors' position that "products having no economic
purpose except to achieve questionable accounting, tax or regulatory goals; or
that raise serious concerns that customers will use them to issue materially
misleading financial statements ... should, at a minimum, be labeled
presumptively prohibited."

Instead, I think the solution to the problem is to stop relying on financial
accounting and instead disclose the actual transaction terms on a
disaggregated basis. Accounting principles require the use of judgements by
people (accountants, regulators, bankers, controllers) whose judgements have
proven to be unreliable at best. The filters that these parties represent
should should be removed and we should be allowed sufficient information to
make our own judgements.

By disclosing the actual details of a complex transaction on a timely basis,
truly independent outsiders would be able to judge and report on the aggregate
book, built from a line-by-line analysis. I like call this Real Transparency.

This analysis has become technically feasible in recent years, thanks to
faster CPUs, and the cost of distributing this information has dropped
dramatically, thanks to cheaper storage and faster networks. Mandating this
type of disclosure would be one of the really useful things the government
could do. The current proposed reforms simply give more power to the
regulators who permitted Enron, Madoff and Lehman.

Complexity is not the real enemy of truth. It is people gaming a system with
built-in opacity. Increase the transparency and there won't be any games left
to play.

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Estragon
FTA:

    
    
      Congress needs to recognize that “regulatory capture,” in
      which an agency becomes a pawn of the industry it is
      supposed to oversee, is real.*
    

I'm sure Congress does recognize that. Congress-critters experience
"regulatory capture" on a regular basis as a personally enriching development.

~~~
stretchwithme
yeah, all the pawns in Congress know exactly how they're pwned and by whom and
whose asses they must kiss

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rms
Politics is the Mind-Killer

<http://wiki.lesswrong.com/wiki/Politics_is_the_Mind-Killer>

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stretchwithme
oh, I'm sure they were just "fostering innovation"

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startuprules
The fact that no one went to jail or even got fired for total malfeasance
suggests that both regulation and internal oversight are grossly inadequate.

Face it, the tag team of government + corporation is going to keep robbing us,
until we do something about it (move money out of US, work in shadow market,
vote out incumbants, etc)

~~~
rms
You are right that the government and corporations are going to keep robbing
us, but there isn't much we can do about it. Look at the recent case of multi-
time convicted Pfizer: the laws mandated a corporate death penalty, but a 4th
level shell company was penalized anyways, with explicit acknowledgment by the
government of the facts of the matter.
[http://www.cnn.com/2010/HEALTH/04/02/pfizer.bextra/index.htm...](http://www.cnn.com/2010/HEALTH/04/02/pfizer.bextra/index.html?hpt=Sbin)

If we can't hold Pfizer accountable for it's crimes, which have actually
directly resulted in the deaths of many people both in a direct and
statistical sense, there is no way we can hold the government and Wall Street
executives accountable.

Unfortunately, we do not have a superior political system. I think at this
point that corporations and their inseparable ties with government are going
to be here until the Singularity.

