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posted by
martyb
on Tuesday November 22 2016, @08:04PM
from the "code"-of-ethics-needs-debugging? dept.
from the "code"-of-ethics-needs-debugging? dept.
Earlier this week, a post written by programmer and teacher Bill Sourour went viral. It's called "Code I'm Still Ashamed Of."
In it he recounts a horrible story of being a young programmer who landed a job building a website for a pharmaceutical company. The whole post is worth a read, but the upshot is he was duped into helping the company skirt drug advertising laws in order to persuade young women to take a particular drug.
He later found out the drug was known to worsen depression and at least one young woman committed suicide while taking it. He found out his sister was taking the drug and warned her off it.
By sake of comparison, take a look at the ACM Code of Ethics and Professional Conduct (Adopted by ACM Council 10/16/92.)
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Programmers Talk About the Unethical and Illegal Things They’ve Been Asked To Do
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If the thunder don't get you, then the lightning will.
(Score: 2) by ikanreed on Tuesday November 22 2016, @08:08PM
I helped a major bank build software to sell mortgage backed securities and credit default swaps after the recession.
(Score: 1, Insightful) by Anonymous Coward on Tuesday November 22 2016, @09:31PM
I helped a major bank build software to sell mortgage backed securities and credit default swaps after the recession.
If this is your biggest guilt, I hereby absolve you of guilt (barring other details). Neither mortgage backed securities nor credit default swaps are inherently bad. They are tools. For example, if the mortgages the securities have the risks behind them properly assessed and accounted for, they are no better or worse than any other form of security.
Just because somebody went on a rampage in a bus and killed 10 with a kitchen knife is no reason to stop making knives.
Of course, if the bank you worked in was misusing these tools to defraud others, and you knew about it... well, you are guilty (at least partially from a moral perspective), and you should feel bad (at least a little bit).
(Score: 3, Insightful) by meustrus on Tuesday November 22 2016, @10:37PM
We need to stop thinking of overcomplicated financial instruments as "tools". If it isn't dead obvious how much the asset is really worth, it's an avenue for corruption at best and economy-destroying fraud at worst. Viewing it as a "tool" is like viewing chemical weapons as "tools". It's technically true, but their very existence suggests doing horrible things with them.
If there isn't at least one reference or primary source, it's not +1 Informative. Maybe the underused +1 Interesting?
(Score: 1, Insightful) by Anonymous Coward on Tuesday November 22 2016, @11:30PM
We need to stop thinking of overcomplicated financial instruments as "tools". If it isn't dead obvious how much the asset is really worth, it's an avenue for corruption at best and economy-destroying fraud at worst. Viewing it as a "tool" is like viewing chemical weapons as "tools". It's technically true, but their very existence suggests doing horrible things with them.
Everything sounds complicated to people who don't know about the subject. For example, try to explain to a layman why it's hard for a computer to detect a bird in a photograph. [xkcd.com] I mean, it's obvious, right? The bird is right there!
Where do you draw the line between a "tool" and a "weapon?" Is a loan a weapon? Is a share in a company a weapon? Is insurance a weapon? Is an index fund a weapon? Is a hedge fund a weapon? Is a LLC a weapon? Is a S-corporation a weapon? Is a C-corporation a weapon?
If you actually understand finances, mortgage backed securities aren't that complicated; they are simply securities (financial assets) which are backed by mortgages. The explanation in literally in the name. Likewise Credit Default Swaps are basically insurance you can buy in case a loan goes bad.
The problem with the financial crisis is that people (arguably knowingly) misrepresented it. It's as if somebody said "we should only pay $50 for insurance because the chances of a hurricane hitting Florida is only .0005%" and people believing them. It's all well and good and you can make a lot of money, until the hurricane hits Florida and you need to pay (i.e. the "low risk" mortgages started to default in rates higher than projected).
The problem isn't the existence of insurance; it's the fraud (accidental or intentional) of those selling it.
Or we can just scapegoat "big banks" and "scary finance." Just like we can scapegoat those fear mongering scientists, those paranoid engineers, and all those other people who talk about things we don't understand. That works too, I guess.
(Score: 3, Interesting) by Geotti on Wednesday November 23 2016, @01:49AM
Or we can just scapegoat "big banks"
Full stop. Thanks.
I'm all for scapegoating institutions, who make their money just by lending money (that often doesn't even exist), without actually doing shit and being ethically accountable on how and where they make their $. Money smells.
(Score: 2, Informative) by Anonymous Coward on Wednesday November 23 2016, @03:48AM
You could have left out the "often".
Since we (and the rest of the world) went off the gold standard (then abandoned the silver standard), all "money" has simply been IOUs.
A bunch of times, really smart chick Ellen Brown[1] has explained this. [googleusercontent.com] (orig) [commondreams.org]
[1] She ran for California state treasurer on the Green Party ticket and I voted for her.
-- OriginalOwner_ [soylentnews.org]
(Score: 1, Informative) by Anonymous Coward on Wednesday November 23 2016, @07:29AM
Huh, even _on_ the gold standard the money creation happened.
Since we (and the rest of the world) went off the gold standard (then abandoned the silver standard), all "money" has simply been IOUs.
Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower's bank account,
Banks could do the exact same thing with gold. Of course shit happens if everyone tries to take out the gold at the same time :). And that's the same for non-gold backed money, except it's less of a shit since the Central Reserve Bank could create some money and loan it to the bank.
Being on the gold standard would also mean that the USA can't take advantage of stuff like the US dollar being the reserve currency of the world (due to the Petrodollar scheme).
Open your eyes and see how the world really works and the real reasons why the USA can stay relatively rich and why US people talking about returning to the gold standard is silly:
For decades everybody has to buy and sell oil, CPUs, orange juice, wheat, etc in dollars. So they need to hold large amounts of US dollars. Whenever the US creates money everyone else with net positive amounts of dollars becomes poorer (basically they are taxed by the US exporting their inflation).
After buying that oil, many of them burn most of it. They keep having to buy lots of oil and up until recently* it has to be bought in US dollars (Saddam tried to sell oil in euros but after he got "regime changed" Iraq went back to selling oil in dollars: https://www.theguardian.com/business/2003/feb/16/iraq.theeuro [theguardian.com] ).
http://www.businessinsider.my/russia-just-one-upped-the-saudis-in-china-2015-6/?r=US&IR=T [businessinsider.my]
As long as the rest of the world lives in the USA's "Zimbabwe" the USA can make us poorer by printing more of their dollars.
The real problem for the US citizens is that nowadays the US Gov ("Mugabe") is no longer seems to give them as good a share of the created dollars (whether directly or via projects like interstate highways), but instead gives that wealth to others.
(Score: 0) by Anonymous Coward on Wednesday November 23 2016, @10:10AM
Huh? Maybe I'm missing something, but that seems to be exactly what we were taught in economics class back in 1993. The term back then was "the money-creating effect of banks".
How does something that was in economics textbooks in the 1990'es become a bombshell report in 2014? Collective amnesia?
(Score: 2) by meustrus on Wednesday November 23 2016, @03:59PM
And there you have the horrible thing that these instruments suggest doing. The overcomplicated part is not the definition of "mortgage-backed securities". The overcomplicated part is how the risk is defined. It would take even a highly educated, highly experienced banker weeks of work to determine accurately the risk of such a security. They were packaged in such a way as to make it so difficult to determine that everybody would just give up and trust their assessment, which was based on (faulty) industry standards.
Science and engineering describe and work with the complexities of nature. It is their goal to make such ideas simple and elegant, even though it's hard. Finance, by contrast, works in purely human-created logical constructs. They don't need to be any more complicated than the mathematics upon which they are based. What is the equivalent of a mathematical proof in finance? Something that may take months to produce, but which any expert in the field can verify in hours? Without the ability to verify what is being sold, we must trust the salespeople. Those salespeople, however, have a strong incentive to defraud us because it will make them lots of money.
We have two options to make sure this doesn't happen again. 1: Only allow the use of financial instruments which are easily verifiable and understood, or 2: Remove the financial incentive. Since option 2 amounts to "end capitalism" I think most people would rather go for option 1.
If there isn't at least one reference or primary source, it's not +1 Informative. Maybe the underused +1 Interesting?
(Score: 2) by Thexalon on Wednesday November 23 2016, @12:32PM
I spent several months of 2006 working for a company that handled the paperwork for sub-prime mortgages (their biggest client was Ameriquest Mortgage). I desperately needed the money, so I don't beat myself up too much about it, but even I could tell that that was a system that couldn't be sustained.
Also, I backed off too easily when one employer refused to let me make our billing system comform to PCI, because they paid lower credit card processing fees if they stored (unencrypted!) the information they weren't allowed to store. And the grating part was that this company was successful enough they didn't really need to pull stuff like that to stay afloat. I did manage to quit that job a few months later.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.