The new Netflix movie about Bernie Madoff’s Ponzi scheme does not shed a positive light on the Securities and Exchange Commission (SEC).
When a top honcho at the SEC erroneously cleared Bernie as not operating a hedge fund, subsequent whistleblower alerts fell on deaf ears. After Bernie could no longer pay back about $19 Billion to investors, damning post-mortem evidence was piled on with Congressmen’s blame game using the benefit of hindsight.
I cannot speak for all of the SEC and how it operates, but I have written about some smart people that work there. They are working within the powers Congress has given them. They act as regulators, not as the agency responsible for establishing the theory of finance.
To be a regulator is like being a referee in soccer. You do not establish the theory of soccer, defining the desirable outcome of gameplay. Nor do you establish the system that uses said theory to implement how the tournaments are played. You merely ensure that when a game of soccer is played, it is done in accordance with the rules.
As a soccer referee, you may suggest that others change the gameplay system when you notice certain infractions occurring frequently. You are not, however, allowed to change the theory of soccer. Such change can only be implemented by the governing body of soccer, perhaps at some point, with input from referees.
You see where I am going with this.
Our government has failed to establish the theory of finance, leading to flawed systems of finance, which leads to an avalanche of uncontrollable infractions the SEC is supposed to catch. This, my comrades, puts the SEC in an untenable situation. The SEC is supposed to enact regulation of the gameplay of finance left blissfully undefined.
You see this happening with the development of an evolutionary false positive of ESG that should have never passed the bar of finance. No finance theory hinging on sustainability is sustainable in a universe subject to the decline of available energy called entropy. The SEC, unable to stop ESG in its tracks, is now tasked with regulating a theory of finance fundamentally incompatible with the evolution of assets to which said regulation applies.
You also see this happening with our stock market’s flawed and inegalitarian workings. Fast trading options unavailable to regular consumers give an advantage to traders who take the lesser informed for a glorious ride. Never mind, the issuers of stock cannot define for themselves how their stock ought to be traded and at what times. Stock markets are not the free-markets they portray to be, are intrinsically unfair, and mislead investors on a grandiose scale.
We in the United States have failed to deploy a theory of humanity that, in the words of Albert Einstein, determines what can be discovered. EVA aims to change that. The solution to fundamentally and systemically improving finance is to establish a theory of finance that improves human adaptability to nature’s entropy, as in establishing the theory of soccer before a single game is played.
The fallout of that omission is an anthropogenic cascade cunningly covered up by the vile maxim of self-aggrandizing human solipsism. A rat race for money produces the opposite of the strength of human renewal required for the human species to do more with less.
We must establish an organization in government that establishes the theory of finance before we build the finance systems and way before we set the finance rules. Like in sports, we must develop the theory of finance to support the evolutionary objectives of humanity before a game of finance is played.
The SEC cannot be expected to improve the integrity of finance, for that is currently not within the realm of its congressional authority.
