Maggie's Farm

Excellent, sane article: Scandal Street. A quote:

Democratic institutions have strong incentives to flatter the feelings of the ignorant and greedy among us, who are a large voting constituency. For this reason, Congress and the regulatory agencies treat the inevitable parting of fools and their money as a deficiency in the marketplace. When Granny puts all of her money into baht-denominated commodity swaptions and then loses it, the fault cannot possibly be hers: Surely there is something wrong with the market, surely those marginally employed and penniless borrowers were tricked into thinking they could afford half-million-dollar suburban spreads, surely companies with no profits or assets would have been outstanding investments if only we’d had the right regulations, etc., and we have to figure out a way to give people their money back. But when JPMorgan makes a boneheaded sort-of-a-hedge-sort-of-not investment and takes a $5 billion (and counting) lump, obviously JPMorgan is at fault, and it’s a national scandal.

Aren't investments all about risk? Who is too dumb to know that?