Sunday, December 14, 2008
An Extreme Solution to Fraud
Execution! Sarbanes-Oxley is nice, but what we need is something that really gives financial hucksters a reason to behave. China recently executed a businessman convicted of bilking thousands of investors out of $416MM in a bogus ant-breeding(?) scheme, state media reported Thursday. Back in 2007, they executed a former official at the Agricultural Bank of China. I have no qualms with the death penalty in principle, because though the state can and will continue to make mistakes, it would be inconsistent to allow the state to kill people in normal police actions in the process of apprehension, but not after catching them. After all, if the 'potential for a mistake' or 'the state can't morally do that' is the criterion, why let our police carry any guns? Why have a military? I'm not saying it should be used a lot, but given 300MM people, there are probably well over 500 people who deserve death in any one year.
So, perhaps crimes over $100MM in fraud can qualify for the death penalty? Surely they ruin many retirements, and most economists value a life between $4 to $9 million, so I think $100MM is beyond the pale.
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The Viscusi and Aldi paper refers to the value of life in the light of regulations. Regulators are totally inhibited by the "one life is too much" ideology and put an unreasonably high value on human life. And of course they dont pay the 7 to 9 million US$ tax they impose on the public to save one theoretical life.
A more realistic appraisal of the value of human life is assumed by insurance companies, which is about 70 - 100,000 US$ per fatality. Russian "maffia"'s price for a life (extinguished) is about 2,000$ per capita plus expenses. Indian surrogates are ready to produce a new life (baby) for about 20,000 $. In any way you look at it, life is rather cheap.
Killing in police and military actions is a byproduct of the dead's resistence or, much less so, flight (if its not, someone did soemthing wrong). Its not the objective.
Erecting a judicial process to bring a criminal now rendered harmless to his death is enormously different. Its different whether you support the DP or not.
I happen not to because I think the government sucks at everything it does, but keeps trying to do more (e.g., criminalizing normal behavior). Why would you give that type of organism the power to kill its citizens?
So you don't think getting gang raped in prison for the rest of your natural life is a more effective deterrent?
What if I kind-of-accidentally do $100 MM in damage, like I threw my cigarette out the window in LA and started a big forest fire?
On a second thought, it is not that regulators think any human life is worth 9 million US$. They dont. They think that 9 million is the maximum tax they can safely impose on the public to protect their jobs.
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