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One Man's Loophole
Jul 10, 2012
As the SEC produces yet more regulations, the New York Times gives us a striking quote:
One man’s loophole is another man’s livelihood.
The speaker is Bart Chilton, a Democrat on the SEC who advocates regulation and opposed this regulation for having, in a Times blogger's words, "loopholes wide enough for Wall Street to exploit."
Now, maybe I'm missing some context -- I wasn't there for the interview -- but it sounds like Chilton is actually objecting to the regulation on the grounds that too many people will still be able to earn a living under the regulation.
But whatever he wants to do about the truth he stated, it is a truth: in a regulated field, a loophole can be a livelihood. Yet loopholes often get closed. You can build a job or a business out of a loophole -- and it can vanish. Consider the fate of the roll-your-own cigarette industry.
This is one reason even those who are doing pretty well under regulation should prefer rights principles: they don't make you dependent on loopholes, or the sort of up-to-the-last-minute negotiations the Times post describes.