Here are two early takes on the matter from John Stossel and Bryan Caplan. I eagerly await Robin Hanson's take on the matter.
To me this is a prime example of government regulatory failure. It is also an argument for Principals-Based Regulation. The law will always be slow to recognize and respond to market evolution and innovation. As a result, we fight yesterday's war by applying rules designed around past practices and transgressions to new creations. Instead of considering or even looking for victims, the regulators look for breaks in the pattern where similar activities are not being equivalently regulated.
In this we also find the arrogance of the aristocratic regulator. But for the watchful eye of the regulator, we the naifs and fools would wonder helplessly into harm. Here is the quotable example from the CFTC rationalizing their actions:
The requirement for on-exchange trading is important for a number of reasons, including that it enables the CFTC to police market activity and protect market integrity.We continue to live in a world less than what it could be all for our own good. The CFTC gave a conclusive prediction to prediction markets that ran something like this: I'll give you a winter prediction: It's gonna be cold, it's gonna be grey, and it's gonna last you for the rest of your life . . . or at least until we stop bluntly applying invasive regulation to every strange thing we see.
No comments:
Post a Comment