LPS5,
I'm a ravenous libertarian who thinks that businesspeople of all varieties are out to get your money, and that their doing so is rational and ethical...and, that if by being asleep --at the figurative wheel you let them, they deserve it.
Standing on its own, this statement suggests that there are no limits to the tactics used by businesspeople in the course of their endeavors. It, and other things you have written (the caveat emptor theme) come across to me as absolving businesses from any sense of morality or ethics, making the phrase "honest businessman" irrelevant. I have a few libertarian tendencies of my own, but I can't defend the notion that people should be permitted to take advantage of others faith in human integrity, even if it is their own gullibility that makes them susceptible. There has to be limits on how far one person can go in pursuit of personal gain at the expense of others.
One of the realities of my life is that I don't have the time to do everything myself. Most people do not and they rely on the expertise and integrity of others to do things for them. Most businesses function based on this premise. If I am a middle manager I assign people jobs to do that might involve many hours of detailed work. When they report to me, I don't need or want to hear from them every detail of what they did to get the job done. All I want is the results and an overview sufficient to make their findings credible if their job happens to involve some sort of research or analysis. And the managers above me generally want to know even less about those details; all they want to know is that I am doing my job to ensure the people under me are performing in a manner that is conducive to the health of the company. None of this could ever work if everybody had to verify all the inputs they received by reviewing all the details.
Stock analysts exist for this very reason. Their job is to do the detail work necessary to make an assessment of a company on behalf of others who might want to invest. Who those "others" are can perhaps be debated, but the fact is that the analyst's findings are made public and there is every reasonable expectation on the part of everyone who sees these reports that they represent factual truth and valid opinions, as best understood by the analyst at the time. I cannot accept the idea that because all the information available to an analyst is also available to me (if that were indeed true- not likely) then it is my responsibility to verify everything the analyst concluded by doing the analysis myself, especially if I find concurring opinions from several supposedly independent analysts who have looked at the same information.. If the purpose of the analyst is to create a spin to entice people to invest in a company, then if that is all they delivered to their own employers their efforts would be worthless. If their purpose is to deliver two sets of analyses, a truthful one for the benefit of their employers, and a distorted one to present to the firm's clients and the public at large, then if that's not fraud it is at least manipulation and unethical.
Freedom cannot survive without responsibility. We probably agree for the most part that government and regulation should not be expanded any more than what is really necessary to maintain civil order and national security. There are many government activities that I think would be better carried out in the hands of private citizens and organizations, assuming that within those organizations there is a genuine atmosphere of integrity. Organizations that have no integrity from within, and place no limits on serving their own interests at the expanse of anyone and everyone on the "outside" simply cannot be immune from regulatory process. As much as I dislike many aspects of big government, and hate the tendency of all institutions to respond to every "problem" with more regulations that apply equally to the innocent and the "guilty", the fact is that most regulation has emerged in response to some activity that was clearly unfair or predatory in the eyes of most members of society. Like you, I would far prefer to see a response that targets the wrongdoers instead of sweeping regulation that makes it more difficult for legitimate enterprise to function, but I find the notion that if I can trick somebody into giving me their money under false pretenses, and then turn around and say it's all their fault because I was just doing my job, unacceptable. I don't care if it's a salesman, or an evangelist, or a charity, or a borker/dealer/analyst.
I'm sorry to say that it has been my personal experience that the financial industry has demonstrated little integrity from within. Mine is of course a relatively small sample, so perhaps it is not an accurate representation of the industry as a whole, but it is sufficient to lend credibility to the accusations I hear coming from the likes of the NYAG and others now joining the party. I can hope for a targeted response, even though it looks like the typical institutional response is emerging from this, making all well by adding a few rather meaningless lines of disclosure to analysts reports
Dan |
