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Something New under the Sun? Not!

The FT of 9.30.2015¬†in an article credited to Mr. Skapinker¬†described the Volkswagen scandal as a new form. A common error in reasoning, whether based in forensic analysis or hearsay review, is to describe and classify an event that, absent this erroneous reasoning, would clearly (assuming the allegations are true) fall into pre-existing forms of corporate corruption and white-collar crime: The gaming of regulators, whether at the U.S. Food and Drug Administration, the U.S. National Highway Traffic Safety Administration, etc., is hardly something without precedent. To treat an event as novel when it is not is to mischaracterize the problem, which is more widespread and hazardous than alluded to in the FT. Gaming, including insider trading, pump-and-dump schemes, etc., may be a tactic to create enormous income and wealth, if not detected and controlled administratively. Gaming is not and has never been limited to traders. The treatment of the VW scandal as something that no one could have foreseen, or ‘who would have thunk?,’ or a once-every-hundred-year storm, or a discovery akin to the development of the hydrogen bomb, etc. is at best wrong and at worst deceptive.

FT: Ask any COO how he / she could increase profitability if the laws and regulations in place could be ‘defeated’ without detection and administrative sanction.