[lend000]

Perhaps this should not be a surprising takeaway.

I hear the same arguments all the time about protecting people from themselves. The argument typically goes "well it doesn't just affect you; your decisions could impact people who depend on you, so we'll add a 'protection' that may prevent you from harming yourself and your dependents." If it is acknowledged that it is indeed the decisions of the actor which affects his dependents, not the dangers of the world that may tempt the actor, and you want to protect his family from his own ineptitude through government force, then it sounds like you would have to make it illegal for that actor to make mistakes/get conned.

But of course, the whole 'protect people from themselves' argument is flawed long before that point, because it assumes that the government can and should try to create a world without risk. This is clearly impossible and subjective, and for the government to even come close, it would have to become so oppressive as to reduce freedoms to nothing. The same exact logic is used for keeping marijuana illegal, which I would speculate many of the dissidents on this thread do not support.

So in our current system, for example, we have rich people who get to use hedge funds (of which some very very low percentage turn out to be a Bernie Madoff-type of a scheme) and poor people who are protected from themselves and get to enjoy the Fed's ultra-low interest rates as inflation eats away at their savings. Clearly not a very good solution.

Maybe a better system would allow all people to use hedge funds, and instead we could focus on preventing/prosecuting fraud.