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<channel>
	<title>The Undercurrent</title>
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	<link>http://the-undercurrent.com</link>
	<description></description>
	<pubDate>Tue, 13 May 2008 20:18:22 +0000</pubDate>
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	<language>en</language>
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		<title>All Plants are Created Equal?</title>
		<link>http://the-undercurrent.com/blog/all-plants-are-created-equal/</link>
		<comments>http://the-undercurrent.com/blog/all-plants-are-created-equal/#comments</comments>
		<pubDate>Tue, 13 May 2008 20:18:22 +0000</pubDate>
		<dc:creator>Noah Stahl</dc:creator>
		
		<category><![CDATA[Blog]]></category>

		<category><![CDATA[animal rights]]></category>

		<category><![CDATA[Ayn Rand]]></category>

		<category><![CDATA[ethics]]></category>

		<category><![CDATA[ethics panel]]></category>

		<category><![CDATA[moral right]]></category>

		<category><![CDATA[morality]]></category>

		<category><![CDATA[plant rights]]></category>

		<category><![CDATA[plants]]></category>

		<category><![CDATA[Rights]]></category>

		<category><![CDATA[swiss government]]></category>

		<guid isPermaLink="false">http://the-undercurrent.com/?p=342</guid>
		<description><![CDATA[Put down that salad!  Have you considered the dignity of the vegetables you’re about to crush into easily-digestible pieces?  Have you no concern for their inherent worth as living beings?  Have you made sure to carefully justify the moral necessity of harming those plants for your own ends?
Those are the topics recently [...]]]></description>
			<content:encoded><![CDATA[<p>Put down that salad!  Have you considered the dignity of the vegetables you’re about to crush into easily-digestible pieces?  Have you no concern for their inherent worth as living beings?  Have you made sure to carefully justify the moral necessity of harming those plants for your own ends?</p>
<p>Those are the topics recently under serious consideration by a Swiss governmental ethics panel.  Their conclusion?  Plants do indeed possess “inherent worth” and must be protected “for their own sake” from human destruction. The report, replete with sympathy-evoking photos of beautiful, dignified flowers on every page, can be found <strong>(<a title="Report" href="http://www.ekah.admin.ch/uploads/media/e-Broschure-Wurde-Pflanze-2008.pdf" target="_blank">here</a>)</strong>.</p>
<p>The disastrous consequences of an idea like “plant rights” are easy to imagine.  Put aside for now the human need to eat plants for sustenance, which would presumably be allowed by the panel given a proper application for an eating license citing an approved moral justification to feed oneself.  Consider all the less-necessitated ways we use plants for our ends.  How could you justify “decapitating” (the panel’s word) a beautiful rose for such a superficial human occasion as Valentines Day?  Imagine the outrage of mowing one’s lawn, which amounts to severing the bodies of thousands of individuals for purely aesthetic reasons.</p>
<p>Clearly, this idea of respecting the “inherent worth” of plant life is utterly incompatible with human life.  This raises an important question – how did a panel of Ph.D.’s, the most educated members of society, reach such an absurd conclusion after extensive and highly complex discussion?</p>
<p>The answer lies in the flawed view of morality accepted throughout modern academia.  In their report, the panelists profess a “biocentric” view of morality which holds that ethical questions pertain to all living things.  However, it is important to note that the only living things the panel is urging to exercise moral restraint are human beings – they aren’t demanding that bears consider the dignity of salmon before snatching them from the river, nor that mosquitoes observe the inherent worth of their fellow creatures before sucking their blood.</p>
<p>This double standard is a crucial clue to the mistake of the moral philosophy that underpins faulty ideas like animal “rights”, and now, plant “rights”.  Any rational idea of morality necessarily applies only to things that have the capacity to conceive of and exercise moral choices.  The reason it sounds strange to think of a rock, flower, or groundhog as moral or immoral is because such entities are incapable of thinking about or making the kinds of choices morality involves.  Only one kind of being is – human beings.</p>
<p>Only in the works of Ayn Rand can one find a fully rational view of morality, one that shows why ideas like “plant rights” are as absurd as they sound.</p>
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		<title>The Helpless French Mind</title>
		<link>http://the-undercurrent.com/blog/the-helpless-french-mind/</link>
		<comments>http://the-undercurrent.com/blog/the-helpless-french-mind/#comments</comments>
		<pubDate>Tue, 22 Apr 2008 03:50:24 +0000</pubDate>
		<dc:creator>Rituparna Basu</dc:creator>
		
		<category><![CDATA[Blog]]></category>

		<category><![CDATA[anorexia]]></category>

		<category><![CDATA[diet]]></category>

		<category><![CDATA[law]]></category>

		<category><![CDATA[personal responsibility]]></category>

		<category><![CDATA[regulation]]></category>

		<category><![CDATA[thinness]]></category>

		<guid isPermaLink="false">http://the-undercurrent.com/?p=341</guid>
		<description><![CDATA[A recent news article describes a new law in France which, if passed, will make it illegal to promote “extreme thinness.”  This ban outlaws images of excessively skinny models in the media and on websites that incite people to severely restrict the amount they eat.  The purpose of this law is to protect individuals, particularly [...]]]></description>
			<content:encoded><![CDATA[<p class="MsoNormal">A recent <a href="http://www.msnbc.msn.com/id/24126072/">news article</a> describes a new law in France which, if passed, will make it illegal to promote “extreme thinness.”<span>  </span>This ban outlaws images of excessively skinny models in the media and on websites that incite people to severely restrict the amount they eat.<span>  </span>The purpose of this law is to protect individuals, particularly children, from the saturation of unhealthy dietary habits in the culture.<span>  </span>Such regulation will purportedly reduce the prevalence of anorexia in France.</p>
<p class="MsoNormal">The underlying premise of this law is that people cannot help being influenced by these images and websites and so need the government to protect them.<span>  </span>If someone reads that “eat[ing only] an apple a day” is the key to looking thin and beautiful, he or she will helplessly eat only an apple a day.<span>  </span>Using this logic, if I demanded that everyone who reads this blog give me all their money, people would have no choice but to empty their wallets.</p>
<p class="MsoNormal">This is obviously absurd. <span> </span>People are not mindless robots; they hold the capacity to think, reason, and make conscientious decisions.<span>  </span>Seeing an excessively thin model in a magazine does not force anyone to change their dietary habits, just as reading that I want all your money does not force you to give it to me.<span>  </span>Human beings have the capacity and the responsibility to think for themselves and to decide which course of action best furthers their lives.</p>
<p class="MsoNormal">Regulating the content in magazines and websites is an insult to human nature and will not reduce the prevalence of anorexia precisely because people have minds of their own.<span>  </span>If not, then the next logical step is to ban excessively thin individuals from walking the streets.</p>
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		<title>Jimmy Carter Embraces Terrorism</title>
		<link>http://the-undercurrent.com/blog/jimmy-carter-embraces-terrorism/</link>
		<comments>http://the-undercurrent.com/blog/jimmy-carter-embraces-terrorism/#comments</comments>
		<pubDate>Mon, 21 Apr 2008 16:16:02 +0000</pubDate>
		<dc:creator>Dan Edge</dc:creator>
		
		<category><![CDATA[Blog]]></category>

		<category><![CDATA[Hamas]]></category>

		<category><![CDATA[Jimmy Carter]]></category>

		<category><![CDATA[Terrorism]]></category>

		<guid isPermaLink="false">http://the-undercurrent.com/?p=339</guid>
		<description><![CDATA[Former President Jimmy Carter, already famous for surrendering America&#8217;s interests to militant Islamists during the Iran Hostage Crisis in the late 70&#8217;s, is yet again betraying America. Last week, Carter met with Nasser Shaer, a senior Hamas politician, under the pretense of promoting &#8220;peace&#8221; in the region. Hamas, internationally recognized as a terrorist organization, has [...]]]></description>
			<content:encoded><![CDATA[<p>Former President Jimmy Carter, already famous for surrendering America&#8217;s interests to militant Islamists during the Iran Hostage Crisis in the late 70&#8217;s, is yet again betraying America. Last week, Carter <a href="http://www.msnbc.msn.com/id/24128928/">met with Nasser Shaer</a>, a senior Hamas politician, under the pretense of promoting &#8220;peace&#8221; in the region. Hamas, internationally recognized as a terrorist organization, has continued to fire rockets at Israeli towns and send suicide bombers to slaughter Israeli civilians.</p>
<p>During their meeting, Carter literally embraced Shaer as a friend and ally, and he later placed a wreath at the grave of life-long terrorist Yasser Arafat. Hamas, Carter says, must be engaged in any discussions to &#8220;lead to a final peace.&#8221; But the only &#8220;final peace&#8221; acceptable to Hamas is the same &#8220;final solution&#8221; proposed by the Nazis during WWII. Both the PLO and Hamas have the explicit goal of eradicating Israel and all of its civilians.</p>
<p>By embracing the Hamas leadership, Carter has sanctioned some of the bloodiest savages in human history. He should be vilified and damned for what he is: a traitor and an enemy of freedom.</p>
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		<title>A Tale of Two Economists</title>
		<link>http://the-undercurrent.com/blog/a-tale-of-two-economists/</link>
		<comments>http://the-undercurrent.com/blog/a-tale-of-two-economists/#comments</comments>
		<pubDate>Fri, 18 Apr 2008 04:35:20 +0000</pubDate>
		<dc:creator>Laura Mazer</dc:creator>
		
		<category><![CDATA[Blog]]></category>

		<category><![CDATA[economics]]></category>

		<category><![CDATA[healthcare]]></category>

		<guid isPermaLink="false">http://the-undercurrent.com/?p=338</guid>
		<description><![CDATA[The New York Times recently published an op-ed by Paul Krugman on McCain’s healthcare plan. Krugman, an economics professor at Princeton University, describes what he sees as the ‘voodoo’ economics of healthcare:
“…the foolish claim, refuted by all available evidence, that the magic of the marketplace can produce cheap health care for everyone.” 
The alternative, of course, [...]]]></description>
			<content:encoded><![CDATA[<p class="MsoNormal">The New York Times recently <a href="http://www.nytimes.com/2008/04/04/opinion/04krugman.html">published an op-ed </a>by Paul Krugman on McCain’s healthcare plan. Krugman, an economics professor at Princeton University, describes what he sees as the ‘voodoo’ economics of healthcare:</p>
<p class="MsoNormal"><span>“…the foolish claim, refuted by all available evidence, that the magic of the marketplace can produce cheap health care for everyone.”<span> </span></span></p>
<p class="MsoNormal"><span>The alternative, of course, is that the <em>government </em></span><span>can provide cheap health care for everyone.<span>  </span>Which of these two claims has really been refuted by all available evidence?</span></p>
<p class="MsoNormal"><span>Capitalism Magazine has just <a href="http://www.capmag.com/article.asp?ID=5108">published an article </a>on the same issue.<span>  </span>Richard Ralston discusses the current state of the British National Health Service, a universally available, free healthcare plan that should make Krugman swoon.<span>  </span>Except that the plan is failing.<span>  </span>The article discusses the burgeoning ‘medical tourist industry,’ as patients flee to third world countries to obtain timely care, and the British government’s attempt to integrate more market forces into their system.</span></p>
<p class="MsoNormal"><span>The articles present a disturbing picture of America’s desire for socialized medicine, set against the backdrop of the failure of socialized medicine abroad. The irony, apparently, is lost on the New York Times.</span></p>
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		<title>Consumer Protection in a Free Market</title>
		<link>http://the-undercurrent.com/blog/consumer-protection-in-a-free-market/</link>
		<comments>http://the-undercurrent.com/blog/consumer-protection-in-a-free-market/#comments</comments>
		<pubDate>Fri, 11 Apr 2008 04:43:00 +0000</pubDate>
		<dc:creator>The Editors</dc:creator>
		
		<category><![CDATA[Blog]]></category>

		<guid isPermaLink="false">http://the-undercurrent.com/?p=334</guid>
		<description><![CDATA[An article in the latest issue of the Undercurrent examines the cultural vilification of Big Pharma. The piece argues that pharmaceutical companies deserve their profits because they invest a tremendous amount of time and energy researching and developing their products. In this post, we look at the oft-made criticism that the only reason pharmaceutical companies [...]]]></description>
			<content:encoded><![CDATA[<p class="MsoNormal">An <a href="http://the-undercurrent.com/paper/praise-big-pharma/">article</a> in the latest issue of the Undercurrent examines the cultural vilification of Big Pharma. The piece argues that pharmaceutical companies deserve their profits because they invest a tremendous amount of time and energy researching and developing their products. In this post, we look at the oft-made criticism that the only reason pharmaceutical companies engage in R&amp;D, and more generally the only reason corporations engage in honest practices, is that the government requires them to do so.</p>
<p class="MsoNormal">Many people believe that without government regulation, pharmaceutical companies will dupe consumers and cut corners in order to make a quick dollar. They believe that the regulatory restrictions imposed by the Food and Drug Administration (FDA) are necessary to reign in companies whose greed would otherwise lead them to engage in a range of unscrupulous practices.</p>
<p class="MsoNormal">This view fails to recognize that the free market already has a means of rewarding integrity—the profitability of a good reputation.</p>
<p class="MsoNormal">Reputation is a crucial business asset. Companies work for years, sometimes, decades, to earn a reputation for providing quality products, impeccable service, customer care, timely delivery. The hint of a bad reputation—that a software company’s programs are liable to crash, that a delivery company damages fragile goods, that a bank overcharges on service fees, or that a pharmaceutical company releases medication hastily—can be fatal for a company. In a free market, a competitor is ever ready to exploit such weakness.</p>
<p class="MsoNormal">Alan Greenspan [writing in Ayn Rand’s essay collection <em>Captialism: The Unknown Ideal</em><span>] notes: &#8220;[I]t is in the self-interest of every businessman to have a reputation for honest dealings and a quality product. Since the market value of a going business is measured by its money-making potential, reputation or &#8216;good will&#8217; is as much an asset as its physical plant and equipment…“ </span></p>
<p class="MsoNormal">The idea that profit could incentivize moral behavior sometimes strikes people as counter-intuitive. What about all the cases in which it would be more profitable for a company to deceive customers, distort earnings, cut corners? Without government regulation, what would check a pharmaceutical company seeking profit in situations where profit required immorality?</p>
<p class="MsoNormal">These questions equivocate short-term and long-term gain. It is possible for a company to benefit short-term from unscrupulous practices. A company can misrepresent its product or service to generate some immediate interest or revenue. But then what will happen? Dissatisfied customers will take their business elsewhere; the media will criticize; affiliates will distance themselves; honest employees will seek out other employers. The price for that immediate gain was real damage to the company’s reputation, and thus to its long-term gain.</p>
<p class="MsoNormal">The fact that short-term deceit is possible is an argument <em>for</em><span>, not against, the role of the profit motive in protecting consumers in the marketplace. It is precisely the fact that companies can be motivated by earning a quick dollar, rather than providing a real value, that makes reputation such an important asset. How many of us invest in the Nigerian businessmen contacting us via spam? How many of us buy medical products from infomercials? We don’t do these things because the seller has not earned a reputation with us. </span></p>
<p class="MsoNormal">As Greenspan puts it: “[I]t requires years of consistently excellent performance to acquire a reputation and to establish it as a financial asset. Thereafter, a still greater effort is required to maintain it: a company cannot afford to risk its years of investment by letting down its standards of quality for one moment or for one inferior product; nor would it be tempted by any potential &#8216;quick killing&#8217;…””</p>
<p class="MsoNormal">Over the long term, the only way for a company to achieve success is honesty and integrity.<span>  </span>Deceiving customers to make money simply isn’t practical. As historical example after example shows, sooner or later, one way or another, such deception comes back to haunt a company. </p>
<p class="MsoNormal">[<em>In this post we’ve presented, in brief, the positive argument that the free market rewards integrity and honest practices, and therefore serves consumer interests. For more on this argument, and also the negative argument that government regulation does not </em><span><em>protect consumers, see the aforementioned Greenspan article, “The Assault on Integrity”, in Rand’s Book &#8220;</em></span><em>Capitalism: The Unknown Ideal&#8221;</em><span><em>.</em>]</span></p>
<p><!--EndFragment--></p>
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		<title>Girls Gone Mild</title>
		<link>http://the-undercurrent.com/blog/girls-gone-mild/</link>
		<comments>http://the-undercurrent.com/blog/girls-gone-mild/#comments</comments>
		<pubDate>Wed, 09 Apr 2008 01:12:14 +0000</pubDate>
		<dc:creator>Guy Barnett</dc:creator>
		
		<category><![CDATA[Blog]]></category>

		<category><![CDATA[chastity clubs]]></category>

		<category><![CDATA[commitment]]></category>

		<category><![CDATA[promiscuity]]></category>

		<category><![CDATA[sex]]></category>

		<guid isPermaLink="false">http://the-undercurrent.com/?p=337</guid>
		<description><![CDATA[An article in the New York Times titled &#8220;Students of Virginity&#8221; reports on the surprising number of &#8220;abstinence clubs&#8221; popping up on university campuses all over the country. These clubs try to discourage students from engaging in pre-marital sex.
According to the article, a growing number of students that have been exposed to similar clubs in [...]]]></description>
			<content:encoded><![CDATA[<p>An article in the New York Times titled <a href="http://www.nytimes.com/2008/03/30/magazine/30Chastity-t.html?_r=1&amp;oref=slogin" target="_blank">&#8220;Students of Virginity&#8221;</a> reports on the surprising number of &#8220;abstinence clubs&#8221; popping up on university campuses all over the country. These clubs try to discourage students from engaging in pre-marital sex.</p>
<p>According to the article, a growing number of students that have been exposed to similar clubs in their high schools, called &#8220;chastity clubs&#8221;, are now entering university. They are alarmed by the prevalence of promiscuity on campus. Harvard abstinence club member, Janie Fredell, for example, said: &#8220;The hookup culture is so absolutely all-encompassing. It&#8217;s shocking! It&#8217;s everywhere!&#8221; Many of these students have created or joined these clubs in response to what they see as an immoral &#8220;sexualized culture&#8221;.</p>
<p>Presumably in order to have a balanced perspective, the article presents the opposing view, represented by another Harvard student, Lena Chen. Chen is a sex blogger who doesn&#8217;t see any problem with meaningless sex: &#8220;to say that I have to care about every person I have sex with is an unreasonable expectation. It feels good! It feels good!&#8221;</p>
<p>By the end of the article the reader is left with a very clear picture of the two disparate positions. As one blog puts it, you have Jezebel, on the one hand, and the Virgin Mary, on the other. Demonstrating this alternative, the article compares the miniskirt wearer that leaves nothing to the imagination versus her modestly dressed counterpart. Even their eating habits are compared in the article. While Fredell overcame her cravings for a sinful &#8220;chocolate explosion&#8221; dessert, Chen indulges her every desire &#8220;including a ginger cake with cream-cheese frosting and raspberry compote.&#8221;</p>
<p>The article leaves us with the choice between self-deprivation or indulging every whim one happens to feel. Are these really the only options?</p>
<p>A third alternative, which the writer does not mention, is that two people might value each other and engage in pre-marital sex. Such couples do not fall into either of the categories presented in the article—neither self-sacrificing nor hedonistic. They are not senselessly &#8220;sleeping around&#8221;, nor are they depriving themselves of the immense emotional/psychological benefits and pleasure that come from sex. To deny oneself these benefits, if one has found a worthy partner, is worse then senseless. If sex is a celebration of one&#8217;s life and existence, as Ayn Rand believed, then the self-denial of sex is one of the worst forms of abrogating one&#8217;s life.</p>
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		<title>Bad Science for Worse Philosophy:  The &#8220;Ruthlessness&#8221; Gene</title>
		<link>http://the-undercurrent.com/blog/bad-science-for-worse-philosophy-the-ruthlessness-gene/</link>
		<comments>http://the-undercurrent.com/blog/bad-science-for-worse-philosophy-the-ruthlessness-gene/#comments</comments>
		<pubDate>Tue, 08 Apr 2008 15:39:25 +0000</pubDate>
		<dc:creator>Laura Mazer</dc:creator>
		
		<category><![CDATA[Blog]]></category>

		<category><![CDATA[Determinism]]></category>

		<category><![CDATA[Genetics]]></category>

		<guid isPermaLink="false">http://the-undercurrent.com/?p=335</guid>
		<description><![CDATA[
Hebrew University recently completed a study on the genetic basis for “ruthlessness,” and it’s getting some media coverage. Nature included it on their news page, with the flattering headline, “Ruthlessness gene discovered.” The story even made it to the Drudge Report for a day or two, assuring wide-spread attention.
All of this sensational coverage, for a [...]]]></description>
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<p class="MsoNormal">Hebrew University recently completed a study on the genetic basis for “ruthlessness,” and it’s getting some media coverage.<span> </span><em>Nature</em><span> <a href="(http://www.nature.com/news/2008/080404/full/news.2008.738.html" target="_blank">included it on their news page</a>, with the flattering headline, “Ruthlessness gene discovered.”<span> </span>The story even made it to the Drudge Report for a day or two, assuring wide-spread attention.</span></p>
<p class="MsoNormal">All of this sensational coverage, for a study design that should raise some eyebrows&#8211;and some chuckles, if not for the fact that it’s being taken so seriously.<span> </span>Here’s the basic study design:<span> </span>200+ student volunteers participated in what the study calls the ‘dictator game.’<span> </span>The game is supposed to determine if the volunteer behaves like a ruthless dictator.<span> </span>Students (a class of individuals notoriously in need of funds) are given 50 shekels (about 14 dollars) and told they have the option of keeping the money, or give it to someone they will never meet, for no particular reason.<span> </span>That’s it.<span> </span>That’s the test of a dictator.<span> </span>Apparently, people with fewer repeats at their AVPR1a gene tended to give away less money.</p>
<p class="MsoNormal">There are some problems here, both with methodology and interpretation, which should jump out at the casual reader.<span> </span>The problems begin with equating a student who keeps $14 he has been given in a game with Hitler, Napoleon, and Saddam Hussein (comparisons <a href="http://www.nature.com/news/2008/080404/full/news.2008.738.html" target="_blank">explicitly drawn in the <em>Nature</em></a><span><a href="http://www.nature.com/news/2008/080404/full/news.2008.738.html" target="_blank"> article</a>).<span> </span>The problems continue with the unfortunately common “one gene, one trait” fallacy of popular genetics.<span> </span>While the pea plants Mendel first tested his theory of genetics on had a number of traits- height, flower color, etc- which were controlled by one gene, human beings have very few. Not only are diseases like cancer usually caused by multiple genes, not all genes are expressed identically in different people.<span> </span>Environmental factors can play a huge role.</span></p>
<p class="MsoNormal">This particular poor study design, with its sensationalistic and scientifically misleading press coverage, joins numerous other attempts to attribute complex character traits to genetic chance, rather than personal choice.<span> </span>The danger from this study does not stem from the fact that the ‘dictator game’ is laughably vague in its implications, or even that the association between a gene of unknown mechanism and an undefined character trait (‘ruthlessness’) is sloppy enough to make even a social scientist blush.</p>
<p class="MsoNormal">No, the real crime is that this sloppy science is used to “prove” a lack of free will.<span> </span>If a dictator kills and murders (or simply retains $14), he does it because his AVPR1a gene was just too short.<span> </span>He did not <em>choose</em><span> to overthrow a country and keep its people in chains.<span> </span>And- the implication is obvious- if he did not choose it, if he was born to that destiny, how can we condemn him? </span></p>
<p class="MsoNormal">This is biological determinism: the notion that our actions and our character are predetermined by our genetic make-up.<span> </span>This theory, whether it takes the form of the simplistic conclusions of the ‘ruthlessness’ study, or more complex genetic analyses, renders us free from fault, free from responsibility, and free from the possibility of choosing to change.<span> </span>Punishment becomes unjust, morality becomes meaningless, and eugenics or criminal convictions based on genetics become logical possibilities.<span> </span>This is not merely sloppy science.<span> </span>It is sloppy science used to defend a terrifying philosophy.<span> </span></p>
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		<title>The profit motive on trial: A look at the famous Raymond Dirks insider trading case</title>
		<link>http://the-undercurrent.com/blog/the-profit-motive-on-trial-a-look-at-the-famous-raymond-dirks-insider-trading-case/</link>
		<comments>http://the-undercurrent.com/blog/the-profit-motive-on-trial-a-look-at-the-famous-raymond-dirks-insider-trading-case/#comments</comments>
		<pubDate>Sun, 06 Apr 2008 16:48:59 +0000</pubDate>
		<dc:creator>The Editors</dc:creator>
		
		<category><![CDATA[Blog]]></category>

		<category><![CDATA[insider trading]]></category>

		<category><![CDATA[profit motive]]></category>

		<category><![CDATA[Raymond Dirks]]></category>

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		<description><![CDATA[An article in the latest edition of the Undercurrent analyzes the moral arguments underlying insider trading laws. In this post, we recount a specific insider trading case from the early 1980s that revealed that it is indeed the profit motive that insider trading laws exist to penalize.
Here&#8217;s the story:
Ron Secrist, an employee at an insurance [...]]]></description>
			<content:encoded><![CDATA[<p>An <a href="http://the-undercurrent.com/paper/inside-insider-trading/">article</a> in the latest edition of the Undercurrent analyzes the moral arguments underlying insider trading laws. In this post, we recount a specific insider trading case from the early 1980s that revealed that it is indeed the profit motive that insider trading laws exist to penalize.</p>
<p>Here&#8217;s the story:</p>
<p>Ron Secrist, an employee at an insurance company, learned that his company was engaged in a massive financial fraud. The company had been making up imaginary insurance policies that existed only on paper, then selling those policies to re-insurers for cash. Learning of this situation, Secrist decided to do the right thing: he quit his job, and reported the fraud to a securities analyst named Ray Dirks.</p>
<p>Dirks immediately went to the Wall Street Journal with the details. To his surprise, the Journal refused to believe that the insurance company, one of the hottest stocks of the time, could be engaging in fraud. Dirks also went to the Securities and Exchange Commission (SEC), but the officers there ignored him for the same reason. Dirks, not dissuaded, used the investigative skills he had developed as a securities analyst to gather more evidence about the fraud, confirm it in a number of ways, and make it public. While he was at it, he told his clients, the only people who would listen to him, to sell their stock in the company.</p>
<p>Dirks should have received a medal, or at least a thank you, for making public one of the most audacious frauds Wall Street has ever seen. Instead, he got a lawsuit. The SEC censured him for “insider trading,” because he had provided his clients with non-public information. Only after a protracted ten-year battle, staggering lawyer fees, and a trip to the Supreme Court did he finally clear his name.</p>
<p>The Supreme Court found Dirks not guilty, so justice was ultimately served in this case. But the Court&#8217;s reasoning did not bode well for future insider traders.  The Court argued that even though Dirks&#8217; clients had profited from his actions, Dirks was not guilty because profit had not been his intent in uncovering the fraud.  The implication of the court’s decision was obvious: Since Dirks would have been criminally liable <em>had</em> he been motivated by profit, it is the profit motive that <em>makes</em> insider trades criminal. It is the intention to make money that renders such trades illegal.</p>
<p>Just imagine if Dirks had done everything he had done, but the Supreme Court had found that his reason for doing it was to protect his clients’ investments. Imagine he had been investigating companies on their behalf, to evaluate whether they were worth investing in. According to the law, such a profit motive would constitute an admission of guilt. </p>
<p>Each year, the government prosecutes hundreds of investors who take the same types of actions that Raymond Dirks took, but whose intent happens to be to make money (or prevent loss), rather than to expose a fraud. In a nation where money-makers were once exalted as heroes for their honest achievements, they are now prosecuted for the crime of profiting from them.</p>
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		<title>Spring Issue PDF online&#8211;it&#8217;s not too late to order!</title>
		<link>http://the-undercurrent.com/blog/spring-issue-pdf-online-its-not-too-late-to-order/</link>
		<comments>http://the-undercurrent.com/blog/spring-issue-pdf-online-its-not-too-late-to-order/#comments</comments>
		<pubDate>Sat, 05 Apr 2008 00:49:56 +0000</pubDate>
		<dc:creator>The Editors</dc:creator>
		
		<category><![CDATA[Blog]]></category>

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		<description><![CDATA[Here&#8217;s a PDF of the Spring Issue.
There are a limited number of extra copies remaining, so if this is something you&#8217;d like to distribute (at  local campuses, subway stations, coffee shops, and other suitable locations), please place your order while you still can! (Orders can be placed here.)
As always, we welcome and kindly appreciate [...]]]></description>
			<content:encoded><![CDATA[<p><a href="http://the-undercurrent.com/pdf/TU_spring08.pdf">Here&#8217;s</a> a PDF of the Spring Issue.</p>
<p>There are a limited number of extra copies remaining, so if this is something you&#8217;d like to distribute (at  local campuses, subway stations, coffee shops, and other suitable locations), please place your order while you still can! (Orders can be placed <a href="http://the-undercurrent.com/subscribe/">here</a>.)</p>
<p>As always, we welcome and kindly appreciate feedback and criticism.</p>
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		<title>Spring 2008 Articles Posted</title>
		<link>http://the-undercurrent.com/blog/spring-2008-articles-posted/</link>
		<comments>http://the-undercurrent.com/blog/spring-2008-articles-posted/#comments</comments>
		<pubDate>Fri, 04 Apr 2008 05:39:59 +0000</pubDate>
		<dc:creator>Jared Seehafer</dc:creator>
		
		<category><![CDATA[Blog]]></category>

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		<description><![CDATA[In anticipation of the publication of our Spring issue, new articles have been posted to the main site. Enjoy!
]]></description>
			<content:encoded><![CDATA[<p>In anticipation of the publication of our Spring issue, new articles have been posted to the <a href="http://the-undercurrent.com">main site</a>. Enjoy!</p>
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