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Comment by wissler | Hacker News Reader

First of all, it's none of anyone's business what some individual wants to invest their money in. It's a moral obscenity to forcibly prevent him from investing.

It's not only presumptuous to say "if someone's not rich, they must not be smart enough to invest", it's a self-fulfilling kind of thing, isn't it?

Nothing prevents people from gambling in Vegas. So clearly these laws are not about protecting fools from their own foolishness. No, the laws are about only one thing: making sure that the people who are in charge of the economic system, stay in charge. And it's not just these SEC laws, there are a wide variety of laws that secure the elite from competition by the peasants.

Whenever someone claims they're keeping you from doing something for your own good, who pretends to be your parent, they really are your master.

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Corporations are afforded civil protections in return for civil responsibilities imposed on them by law. These responsibilities include restrictions on types of investment. Nobody's stopping an individual from starting a business, investing via entering a partnership, or investing by making some personal guarantee with another individuals. Corporations aren't people. When you make a deal with a corporation, you're actually making a deal with society, at least in part, so your deal will be upheld on paper. In order to reduce the risk of malfeasance and cost to itself in the form the consumption of legal resources, society imposes restrictions on corporations that include types of investment.

You can make the case that the regulations may or may not be the best for what society wants, but to say that they're somehow a moral obscenity seems silly to me.

I think it's strange to say that you're prevented from investing in a corporate structure because of legal limitations when the same legal limitations are what enable you to invest in the corporate structure in the first place. It's why I don't subscribe to this viewpoint on investing.

I agree with you on the gambling bit, to an extent. Government-backed lottery really preys on a certain class of people and I don't care for it so much. Private casino-style gambling is viewed by many as an entertainment outlet. Like drinking, for example. It's generally understood that you go to the casino to have a good time....and lose your money. Winning is understood to be an aberration. That doesn't stop people from blowing everything, though.

>Nothing prevents people from gambling in Vegas.

The only reason that people gamble in Vegas is because every other place created laws to protect fools from their own foolishness. Vegas, a city built by organized crime figures who normally had to operate illicitly, didn't.

> "every other place"

Vegas is not the only location of legal casino gambling. It is by far the largest but there is significant gambling activity elswhere in the US.

Wikipedia mentions these markets:

    1. Las Vegas Strip $5.550 billion
    2. Atlantic City $3.943 billion
    3. Chicago region $2.092 billion
    4. Connecticut $1.448 billion
    5. Detroit $1.36 billion
    6. St. Louis $1.050 billion
    7. Tunica Resorts, Mississippi $997.02 million
    8. Biloxi, Miss. $833.50 million
    9. Shreveport, La. $779.65 million
    10. Boulder Strip (Las Vegas) $774.33 million
    11. Reno, Nevada $715.23 million
    12. New Orleans, La. $653.05 million
    13. Downtown Las Vegas $523.82 million
    14. Laughlin, Nevada $492.51 million

source: https://en.wikipedia.org/wiki/Casino#By_region

There are also numerous casinos on Indian reservations across the country.

That's not what he meant, he meant Vegas as a stand-in for gambling in general.

To my knowledge, casino gambling has not actually crashed the entire economy. Multiple times.

I agree with you that the rules are not really about protecting ordinary people. At this point in history, it's about protecting one set of elites from another, with the side effect of (perhaps) protecting the entire economy from certain disasters.

We could use this argument to remove warning labels from all dangerous things.

If you want to drive your vehicle without a seatbelt, who am I to force you to? Your seatbelt choices have no impact on anyone else except you, right?!

That is exactly right. Also, if I want to ride my bicycle without a helmet, or go rock climbing, or cross the street without being wrapped in bubble wrap, that is my business too.

Although the seat-belt thing does have some legitimacy, in that it keeps the drive in front of the wheel during an accident, allowing him to potentially keep some control over the car.

If you suffer a serious accident, it imposes an external cost on society. You may get presented with a bill afterwards, but even at the point of having the accident it's highly disruptive. Consider a car accident where you're berely inured and shaken up, v. one where you are ejected through the windscreen into the road. Which one is going to disrupt traffic for longer?

keeps the drive in front of the wheel during an accident

So you think passengers should not wear them?

People without seatbelts often end up in emergency rooms at public expense. People with bad investments won't often end up on welfare from their decisions.

Can you show this to be the case, or should I just take your word for it that bad investments don't have any negative impact on society?

I don't know of any studies on the subject, I'm just reasoning that if you have enough money to do actual long-term investment you must have some form of income, so if it falls through you still have income. It's not like gambling where you can addictively throw away every dollar you have in a day. If you 'invest away' all your money, you can uninvest it the next day.

Also: It's not 'negative impact' as a binary check, but looking at the massive cost of medical bills. And seatbelts are enforced on public roads, not private land. Investment is fundamentally a private action, which should only be restricted in very serious circumstances.

> It's not like gambling where you can addictively throw away every dollar you have in a day.

It's not?

> If you 'invest away' all your money, you can uninvest it the next day.

Not if it's gone.

Actual investment (to be distinguished from day-trading) is not an addictive action. There is no feedback loop.

What crazy definition of investing are you using where you have any reasonable* chance of losing all your money in less than a day?

Compare that to the near-100% chance of losing your money if you spend a single hour betting all of it at casino games.

*let's say 1% or greater

I know for a fact that you do not have a near-100% chance of losing your money in a single hour at the casino, so the rest of your data, and your logic in general I find suspect.

Your argument would hold some weight if you could provide some source or documentation for your assertions (that investment has no feedback loop and is therefore not addictive, or that the speed at which you lose your money on an investment is something that matters for the sake of this conversation).

I didn't say walking through a casino for an hour, I said betting all your money for an hour. As in, find a game, bet all your money, rinse and repeat. If you can win dozens of times in a row please take me with you next trip.

Compare to buying and selling stocks repeatedly for an hour. Except for transaction fees you're probably not going to move more than a couple percent.

What do you want documentation for? Buying a stock for three months is about a million times slower of a feedback loop than a casino game, and that's an unarguable fact. When I search for anything about addiction to investing, all I find is articles talking about addiction to speculating, which is not the same thing.

And of course the speed matters, because the core of my argument was that you can't do something like blow your paycheck on investments. Bad investment might lessen your savings over the long term, but they're not going to turn a working adult into someone that costs society money the way a terrible car crash or gambling addiction can.

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