There Oughta Be A Law!

[xthread]

In another venue, someone argued 'the people who caused the mortgage meltdown be in jail?!'

I don't know if any of you, dear readers, happen to hold that view, but, if you do, would you be so kind as to tell me, in general terms, who you think ought to be in jail, and in specific terms, what you think they should be in jail for?

Let me note two important things at the outset: remember that lying to people is usually only against the law if you're doing so to cheat them out of money (which is why Bernie Madoff is in jail), and it's unconstitutional to make laws that make something retroactively illegal.

Got your moral outrage ready? Go!

Comments

[kest]

Just for the record, I think it's kind of fascinating that a subsection of the (mostly conservative) population conceives of this instead as 'the percentage of loans given to stupid people must have been substantially higher than in previous decades.' In other words, where I tend to conceive of the problem in the regulations as making *kinds of loans* legal and *kinds of investing* legal (and especially in having the same people in charge of both), they conceive of the problem being in the *kinds of people* being offered the loans. Specifically, if they are trying to sound smart about it, rather than just saying that people shouldn't have taken loans they couldn't afford (without looking at any other factors about why people may have taken such loans), they pin it on the CRA, although almost all reputable experts disagree that this had anything to do with the problem.

[xthread.livejournal.com]

And I see a feedback system with busted control mechanisms spinning out of control, just like any other speculative bubble. We should presume that there are bad actors running around in the system, because, duh, lots of opportunities to appropriate large amounts of money, of course there will be bad actors, but I don't expect that the bad actors caused the system to spin out of control because it doesn't require them to do so - any system that only has positive feedback controls will blow up. So I tend not to impute the presence of bad actors, even though I expect that there are some.

[kest]

Ok, yes, but. Who/what busted the controls is what we're talking about here, not (just) who took advantage of the situation once the controls were busted. (I understand the point I'm making here, but I'm not sure if I'm clear, so feel free to say so if I'm not.)