Suggested Answers to the Second Short Quiz

[johnkarls]

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Question 1

What is the origin of the term “phishing”?

Answer 1

According to Akerlof and Shiller (our authors), it came into usage in 1996 to describe the illegal activity on the internet of individuals/organizations impersonating legitimate organizations such as banks, in order to obtain personal information from victims, such as their social security numbers.

Question 2

Have Akerlof and Shiller (our authors) themselves invented the mis-spelling of fools as “phools”?

Answer 2

So it would appear.

Question 3

In considering Adam Smith’s economic theory that free markets provide “an invisible hand” that produces the best outcome, do Akerlof and Shiller make the traditional “ceteris paribus” (“everything else being equal”) assumptions such as free competition, everyone has complete and accurate information, instantaneous adjustments, etc.?

Answer 3

Probably not explicitly, but every good economist always operates on these assumptions at least implicitly.

Question 4

Would governmental regulation (such as anti-trust law to insure free competition, the Food and Drug Administration’s regulation of the safety of new drugs and its policing of the safety of food production) be good examples of how free markets must be supported for “the invisible hand” to work properly?

Answer 4

Of course.

Question 5

Do Akerlof and Shiller indict free markets as being incapable of producing the optimal result because human beings are “phools”?

Answer 5

Yes, this is the reason for their book.

Question 6

Do Akerlof and Shiller claim that “phools” come in two varieties -- “psychological” (which they sub-divide into “emotional” and “cognitive bias” which means misinterpreting reality) and “informational”?

Answer 6

Yes.

Question 7

Aren’t Akerlof and Shiller just pinning new labels on old concepts -- that “cognitive bias” is insanity, “informational” is fraud, and “emotional” as used by them encompasses both addiction and what marketers might call “taste”?

Answer 7

So it would appear.

Question 8

Hasn’t taste been around much longer than Oscar Hammerstein’s “shiny little surrey with the fringe on the top” that featured a team of snow-white horses, yellow wheels, brown upholstery, a genuine-leather dashboard, Isinglass curtains, two bright side lights and, to top it off (pun intended), a fringe made of SILK!!!???

Answer 8

Of course!!! After all, weren’t Adam and Eve “phools” for eating an apple???

Question 9

And haven’t consumers, since time immemorial, consistently “lived beyond their means” -- consciously trying to be as ostentatious as possible, whether in terms of vehicles, housing, clothing, etc., etc.?

Answer 9

It’s called “human nature.”

Question 10

Do Akerlof and Shiller provide us with a zillion vignettes illustrating such “phoolishness” in four categories -- (A) personal financial security, (B) the economy, (C) health, and (D) the quality of government?

Answer 10

Yes.

Question 11

Are Akerlof and Shiller correct that all of us are nothing more than the monkeys in the experiment presenting them with food alternatives, always choosing fruit roll-ups?

Answer 11

What do you think??? Let’s discuss!!!

Question 12

Do Akerlof and Shiller make a convincing case that government should be empowered to prevent us mere monkeys from exercising our free will to choose a “shiny little surrey with a fringe on the top”?

Answer 12

What do you think??? Let’s discuss!!!

After all, bankruptcy law is designed to deal with individuals who cannot control sufficiently their finances. And aren’t Akerlof and Shiller actually making a case for before-the-fact bankruptcy rather than after-the-fact bankruptcy???

For movie buffs, isn’t this reminiscent of a 2002 Tom Cruise movie entitled Minority Report in which a special police unit is able to predict murders and arrest the murderers before they commit their crimes???

Question 13

Do Akerlof and Shiller fail to devote enough attention when it comes to informational “phools” (one of their two categories of “phools”) and the quality of government (one of their four categories of vignettes)?

Answer 13

What do you think??? Let’s discuss!!!

Question 14

After all, didn’t the First Short Quiz demonstrate how either --

(A) Donald Trump is a “phish” who has been “phooled” by the slick lobbyists of U.S.-based Multi-National Companies (“MNC’s”) that have exported American jobs, into believing that the tax-haven subsidiaries of those MNC’s have STUFFED INTO MATTRESSES $2.5 trillion (yes, that’s TRillion with 12 zeros), or

(B) Donald trump himself is “phishing” for the “phools” he believes American voters to be by trying to get them to believe that the MNC’s have STUFFED INTO MATTRESSES $2.5 trillion???

Answer 14

Yes!!!

Question 15

Does the law of criminal fraud and the law of civil fraud provide adequate protection from the “snake oil” being purveyed by Donald Trump?

Answer 15

No (please read the rest of the Q&A’s).

Question 16

Would Donald Trump be able to defend himself from criminal fraud by claiming that he was the “phish” who had been “phooled” rather than the “phisherman” who was intentionally “phooling” the voters?

Answer 16

No (please see Q&A-18).

Question 17

Would such a defense be effective for Donald Trump in a civil lawsuit for fraud?

Answer 17

No (please see Q&A-18).

Question 18

Doesn’t the law, both criminal and civil, provide that “reckless disregard for the truth” is the equivalent of “intent”?

Answer 18

Yes.

Question 19

Do American prosecutors ever prosecute pols for the criminal fraud of which they are often obviously guilty?

Answer 19

Is anyone aware of such a case???

Question 20

Do American prosecutors always seem to confine themselves to prosecuting pols for corruption?

Answer 20

So it would appear!!!

Question 21

Doesn’t the criminal law of corruption, as interpreted by the courts as requiring an explicit “quid pro quo” when it comes to campaign contributions (aka bribes), enable pols to engage in criminal fraud because they know how “the game is played” (i.e., a “wink and a nod” enforced by the knowledge that a pol who has ever crossed a campaign contributor will NEVER AGAIN receive a campaign contribution from anyone)???

Answer 21

Unfortunately!!!

Question 22

Is Donald Trump “judgment proof” when it comes to a civil lawsuit for fraud?

Answer 22

Please see Q&A-23 through Q&A-25.

Question 23

After all, wouldn’t he be “judgment proof” in the traditional sense that he is only worth $11 billion (his claim) and the damages caused by the “snake oil” he is purveying would run into the trillions (yes, that’s TRillions with 12 zeros)?

Answer 23

Yes.

Question 24

However, even if Donald Trump is “judgment proof” in the traditional sense, wouldn’t a civil lawsuit for fraud have the virtue of taking away all his wealth?

Answer 24

What do you think??? Let’s discuss!!!

Question 25

After all, isn’t that what his proposal will do to zillions of innocent Americans?

Answer 25

Unfortunately!!!