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Note the misalignment of interests here: those providing the “cure” have a direct incentive — in fact, a ''need'' — to ''continue'' helping, because that is how they get paid. They design their disintermediating machines to only disintermediate ''so far'': users must remain sufficiently dependent on their code, their systems and their expertise, that they are obliged to pay an annuity for it. To pay ''[[rent]]''.<ref>I have lost count of the times that that a tech provider has told me users cannot have edit or configuration rights on a piece of software. There are two explanations for this, and neither is edifying: one is that the software is so fragile or poorly designed that allowing a user to tinker with it will make it break; another is that it is so basic that allowing users to see it will reveal how simple it really is.</ref> | Note the misalignment of interests here: those providing the “cure” have a direct incentive — in fact, a ''need'' — to ''continue'' helping, because that is how they get paid. They design their disintermediating machines to only disintermediate ''so far'': users must remain sufficiently dependent on their code, their systems and their expertise, that they are obliged to pay an annuity for it. To pay ''[[rent]]''.<ref>I have lost count of the times that that a tech provider has told me users cannot have edit or configuration rights on a piece of software. There are two explanations for this, and neither is edifying: one is that the software is so fragile or poorly designed that allowing a user to tinker with it will make it break; another is that it is so basic that allowing users to see it will reveal how simple it really is.</ref> | ||
===The fault in our stars=== | ===The fault in our stars=== | ||
Our friends in the [[management consulting]] profession (also [[rent-seeker]]s, needless to say) encourage this disposition through the dogma of [[outsourcing]]. Here the gist is: if you have a convoluted process that is costing you time and money, [[Outsourcing|outsource]] it, to someone better specialised, incentivised and remunerated to do it, who can do it cheaper, better and — thanks the magic of {{author|Adam Smith}}’s invisible hand — at the optimal cost. In this way do we ''entrench'' [[rent-seeker]]s, by building an entire ([[rent-seeking]]) infrastructure around this newly articulated [[process]] — with its own [[middle management]], [[operations]], [[compliance]], [[internal audit]], [[procurement]], you name it — without ever asking whether the process was that important in the first place. | Our friends in the [[management consulting]] profession (also [[rent-seeker]]s, needless to say) encourage this disposition through the dogma of [[outsourcing]]. Here the gist is: if you have a convoluted process that is costing you time and money, [[Outsourcing|outsource]] it, to someone better specialised, incentivised and remunerated to do it, who can do it cheaper, better and — thanks the magic of {{author|Adam Smith}}’s invisible hand — at the optimal cost. In this way do we ''entrench'' [[rent-seeker]]s, by building an entire ([[rent-seeking]]) infrastructure around this newly articulated [[process]] — with its own [[middle management]], [[operations]], [[compliance]], [[internal audit]], [[procurement]], you name it — yes, even [[legal]] — without ever asking whether the process was that important in the first place. | ||
But the new machinery is so costly to remove, that it is easier just to live with it, from time to time tweaking it, optimising it, adjusting it, relocating it from a service centre in Bangalore to one in Manilla, ''every little fiddle keeping that entire [[Bureaucracy|bureaucratic]] iron lung fully engaged''. And no [[management consultant]] will tell you the obvious truth: had you ''decomplicated'' the process in the first place — just got rid of it — perhaps giving away some peripheral protections in the mean time, ''none of this would have been necessary''. | But the new machinery is so costly to remove, that it is easier just to live with it, from time to time tweaking it, optimising it, adjusting it, relocating it from a service centre in Bangalore to one in Manilla, ''every little fiddle keeping that entire [[Bureaucracy|bureaucratic]] iron lung fully engaged''. And no [[management consultant]] will tell you the obvious truth: had you ''decomplicated'' the process in the first place — just got rid of it — perhaps giving away some peripheral protections in the mean time, ''none of this would have been necessary''. | ||
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==The solution== | ==The solution== | ||
So where does this leave us? | So where does this leave us? | ||
{{sideboxtop|align= | {{sideboxtop|align=left|width=50|background=#F2ECCE}} | ||
===The [[cross default]] challenge=== | ===The [[cross default]] challenge=== | ||
Here is a challenge: one day, out of the blue, ask a risk officer to explain, exactly, what [[cross default]] is and how it works. On the spot. No phone-a-friend. No ask-the-audience. Expect blank looks and notebooks.<ref>https://en.wikipedia.org/wiki/Sons_of_the_Silent_Age.</ref> | Here is a challenge: one day, out of the blue, ask a risk officer to explain, exactly, what [[cross default]] is and how it works. On the spot. No phone-a-friend. No ask-the-audience. Expect blank looks and notebooks.<ref>[https://en.wikipedia.org/wiki/Sons_of_the_Silent_Age. Listening, as they do, to tracks by Sam Therapy and King Dice...]</ref> | ||
Now ask yourself this: it it better to keep that peripheral right to [[cross default]] with all the [[tedious]] arguments it invites — whether triggered by [[default]] or [[acceleration]], as to the level and symmetry of [[Threshold Amount - ISDA Provision|thresholds]], what counts as [[indebtedness]] and whether to include [[derivatives]] or [[deposits]], what sorts of [[grace period]]s should be allowed, whether to carve out operational errors or settlement failures — is it better to keep all of that fidgetery and move the people who handle it out to Hanoi — or just ''strike it out of your contract forms altogether''? | Now ask yourself this: it it better to keep that peripheral right to [[cross default]] with all the [[tedious]] arguments it invites — whether triggered by [[default]] or [[acceleration]], as to the level and symmetry of [[Threshold Amount - ISDA Provision|thresholds]], what counts as [[indebtedness]] and whether to include [[derivatives]] or [[deposits]], what sorts of [[grace period]]s should be allowed, whether to carve out operational errors or settlement failures — is it better to keep all of that fidgetery and move the people who handle it out to Hanoi — or just ''strike it out of your contract forms altogether''? | ||