I was struck this week by a word that is showing up recently in everything I see and hear. It is a term that has now reached an iconoclastic status in the American Lexicon … “Misled”.
The use of this word has recently spread its wings far beyond its usual roost in the political realm in the heat of the mortgage, housing and credit crisis. The proliferation of this word and its use is troubling in many respects.
The first is its ability to abdicate personal responsibility and accountability. The word “misled” is being used today as a verbal shield and sword; a shield to deflect blame from one’s individual decisions and actions to another individual or to another group of people and a sword to slit the bag of money they may steal from the people that “misled” them or from taxpayers whom they expect to cover their bad decisions.
A few current, shining examples are:
- Investors, including very sophisticated money managers, were "misled" about the risks and the value of their MBS investments
- Borrowers were "misled" about the dangers of adjustable rate mortgages
- CEOs "misled" the public and shareholders (pick your topic)
- Homeowners were "misled" when they received a loan for 100% of the value of their house at the time they bought it
- Home buyers were "misled" about the value of their house by appraisers
- Municipalities and the wide range of reasonably well-off investors trying to take advantage of that wealth were "misled" when they were “steered” into Auction Rate Securities
- Depositors were "misled" about the strength and capital underpinnings of IndyMac bank and others
The very dangerous result of this massive cleansing is that it washes off the dirt of the individual’s responsibility for making their own informed decisions. If the individual’s decisions had resulted in the mad money everyone expected, and many reaped, instead of being “misled” by others, they would be socializing the brilliance of their own incredible investment savvy around the backyard barbeque or enjoying their new promotion at work.
Our free markets and our constitution insure the individual’s right to strive to attain their piece of the American dream. It does not guarantee that people will achieve this dream. It does not say if they reach out their hands and they come back with money, hoorah, but if those same hands come back burned they can put on the salve of public tax dollars or use legal thuggery to achieve the same.
Yet, we are allowing people and companies to sprint like track stars under the umbrella of being “misled” to socialize the losses wrought by their bad decisions.
We have turned the old saw that “victory has many fathers and defeat is an orphan” into the uniquely new American version that “victory has one father and defeat rests on the backs of others”.
The very freedom to contract for investment, to buy a house, a car or anything else comes with an individual duty for gathering facts and information being accountable for those decisions.
So, you might ask, “what if the information is bad or tainted?” “What if they didn’t explain it fully, correctly, or provide the proper warnings?”
In every example listed above, each of these transactions is highly regulated, requires disclaimers, disclosures, contracts and a customer’s signature that they understood the risks and rewards. Where companies took risks and subsequently failed one has to consider that these are their businesses and professions. If these professionals don’t understand the risks they are taking, and take the loss (their own job, business failure or both), they should get into a different business.
As far as receiving the “right” information … what information is ever certain when produced by another individual or group of people? When has information produced by human beings ever not been slanted by their ability to gather facts, process those facts within the context of their education, experience, cultural background and personal biases?
When money is involved, should you assume any person at either end of the transaction is looking out for your best interest? Or should you consider that there could possibly, just possibly, be some taint of their desire for their own economic gain?
Unless we are talking about math where 2 + 2 = 4, this pristine and precise information cannot be found. In fact, the use of math in the complex models used to provide much of the information today is so steeped in assumptions, that include those same individual biases that in this new math 2 + 2 can end up equaling 7, 25 or 100, depending on the individual modeler.
The financial statements of publically traded companies are probably the most historically scrutinized results of addition and subtraction and weighty regulation and audit, yet the allowance for management variance and categorization leaves even these additions of apparently simple 2 + 2 equations to varying sums.
The old “Caveat Emptor” or “buyer beware” is the mantra. The right to participate and the opportunity for gain, brings with it the risk of loss. If people don’t have the desire, ability or will to be informed enough to understand the risk of their undertaking, is it someone else’s responsibility to be sure they do?
If they subsequently leave the thinking and advice to others when their economic viability is at risk, is it someone else’s problem?
But if I hadn’t been “misled “(lied to), I would have made a different decision.
Really?
When dollars seem to be falling from heaven on your friends and neighbors in a market boom and the press is touting the incredible economic miracle, are your ears open to the cautionary tales and explanations of the risks?
Would your investigations be deep and wide to make an informed decision or would you perhaps skip over the pesky warnings for a reach at the pot of gold at the end of the rainbow? That’s your right for sure, one way or the other.
Hindsight’s 20/20, and many lawyers make their living peering through the perfection of hindsight’s 20/20 glasses. So many lawyers, so many pairs of expensive glasses, and so many Americans rushing to empower them to get back their stolen money from those that “Misled”. Join these with so many of their fellow lawmakers and lawyers in congress who are all trying to keep their jobs as the panicked and distressed line up at the public and private trough to be remunerated or saved for being “misled”.
I have to admit, I must have misread the constitution when it seems to guarantee my fellow Americans and I the right to pursue life, liberty and happiness without the interference of government or of other people! That we would have this right as free individuals to make personal choices that would benefit me if made correctly and be my problem if they were wrong.
But for this right, this right to participate in this grand experiment in the right of the individual to make independent, free decisions, I wouldn’t have the right to shift the burden of my bad decisions to others under any umbrella… but I guess I was MISLED.
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