Common Sense

The law of fiduciary duty gives pride of place to common sense as the decider of the facts of capacity, prudence and loyalty as constraints upon the exercise of plenary powers of discretionary authority by Pensions & Endowments.

“The prudent person standard requires that a fiduciary act with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.”

– United States Employee Income Security Act of 1974

The prudent person acting in a like capacity to fiduciary stewards of social trusts for Pensions & Endowments is not a actual human being expert in care, skill, prudence and diligence who can testify as an expert witness about matters they are uniquely expert in.

Rather, it what the law sometimes calls the hypothetical reasonable person, as a composite or amalgam of the common sense of what makes sense under the circumstances in question to people who act with care, skill, prudence and dilgence who are familiar with such matters.

It is deliberative, more than elective.

It is inclusive, but not populist.

Opinions don’t count.

Reasoned conclusion through thoughtful reflection after careful consideration does.

Different people can reach different conclusions through thoughtful reflection after careful consideraiton, and conversation is needed to resolve those differences, and reach a consensus, a common conclusion, a common sense of what makes sense, under the circumstances then prevailing.

This is the prupose of a jury sitting in judgement of the facts in a court of law.

It is the purpose of a Citizens Assembly organized through sortition and self-nomination by inquiring minds open to participation in a process of careful consideration and thoughtful reflection to agree through discussion a reasoned conclusion of what makes sense, under the circumstances.

Both Citizens Juries and Citizens Assemblies are convenings designed to arrive at consensus, or common sense, of what makes sense, under the circumstances of a particular question.

So the Prudent Person in fiduciary stewardship of forever money aggregated into Pensions & Endowments entrusted with plenary powers of discretionary authority over the allocation of savings for investment as capital for busienss within the constraints of prudence in the exercise of capacity in undivided loyalty to aims (whew! that’s a mouthful – and all basic knowledge that must be mastered before deliberation can be undertaken) is the conclusion of a Citizens Jury, in a trial before the court of common sense, or a Citizens Assembly, after sortitioned participation on a question of public import.

The first question that must be decided by this Prudent Person today is the question of the capacity that Fiduciary Stewards of Pensions & Endowments derive from the size, purpose and time of the money entrusted to their plenary discretion.

But the Prudent Person today has been replaced by the Prudent Investor, as the specialized common sense of experts who are expert in the extraction of profits from the selling price for securities bought at one price to be sold at another to extract profits from volatility and growth in market clearing prices for securities in the markets for maintaining volatility and growht in market clearing prices for those securities.

“The [investment financial mathematics of Exit by Sale in the securities trading markets] professionals
have basically pushed out the attorneys
from interpreting fiduciary duty“

– Keith Johnson
[he actually said, “investment” professionals; I translated “investment” into “the financial mathematics of Exit by Sale in the securities trading markets”]

This begs the question of, and forecloses deliberation on, whether or not it is properly prudent for Pensions & Endowments to use this financial mathematics of Exit by Sale as prgamatically loyal to their aims, under the cirumstances prevailing today, when there is an alternative that nobody is considering.

This is the alternative of Exit through Amortization, to an actuarial cost of money, plus opportunistic upside, from enterprise cash flows that are prioritized by contract for Sutiability, Duration and Stewardship.

So this is a threshold question for our common sense under the circumstances prevailing today:

Does it make sense 
to let securities trading markets professionals 
be the deciders for all of humanity, 
of the capacity that Pensions & Endowments derive 
from their capacity of size, purpose and time, 
to use the personal computing technologies 
of spreadsheet math, 
desktop publishing 
and digital communication 
to allocate the aggregations entrusted to their plenary discretion 
through the financial mathematics of Exit through Amortization 
to an actuarial/fiduciary cost of money, plus opportunistic upside, 
from enterrpise cash flows that are prioritized by contract for 
Suitability, Duration and Stewardship?

OR, 
should we, the people, decide this question for ourselves?