Gym Teacher Surgeons
Jun 10, 2022
I want you to imagine a scenario. Imagine being sick. Not just a cold. Not the flu. I’m talking about being seriously ill and needing specialized care. You go to a hospital and meet with a doctor who schedules you for surgery. Then, on the day of your surgery, you go to the hospital, are wheeled into the operating room, hooked up to an IV and in walks the doctor. The only thing is, it’s not the doctor you met with. It’s your 7th grade gym teacher who tells you they’ll be doing the surgery today and before you can object, you’re asleep. That’s not all that different from what is happening with the SEC right now.
There are changes to markets being proposed by the head of the SEC. According to him, markets aren’t operating as efficiently as they should. Never mind the fact over the last 30 years, markets have become more efficient than ever. There’s more liquidity than ever. Costs for self-directed retail investors have never been lower. Technology has never been better. And never mind the fact that the head of the SEC has probably never traded on a self-directed trading platform once in his life. He’s going to go ahead and propose changes to markets that will impact you, me and likely put the ability of retail traders to quickly and efficiently participate in markets in jeopardy.
Gary Gensler is an intellectually intelligent guy. He’s well spoken. He’s probably pretty knowledgeable about certain topics. But your gym teacher probably knew something about physical education. They probably knew what they were doing in PE class. But that doesn’t mean you want them taking a scalpel to your body and that’s the metaphorical equivalent of what the SEC, under Mr. Gensler, is doing.
Access to markets, costs, and ways of making markets work better for everyone is an evolutionary process. Things can be improved. But if anyone is going to propose ways of making markets work better, can we please make sure it’s done by people who understand markets at an intimate level?
There is truly no better way to mess something up than to have politicians become involved. Once politicians insert themselves, sadly, it’s no longer about improving anything. More often than not, it’s simply about political grandstanding. It’s about laying the foundation for how that individual will advance their political career.
I don’t think anyone would disagree that there are market-related issues which can and should be improved. I happen to know with certainty that domain experts exist who are more than qualified to address these issues. I also know there are people unqualified who should not become involved in the process. And someone who has never acted as a self-directed retail investor has about as much business making changes to markets as that PE teacher has in the operating room.tastylive special projects writer Josh Fabian contributed to this article.
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