Can This Lead to a Slippery Slope?

Mike Konzcal (seen via Megan McArdle) is discussing the possible problem of demented people being ripped off by financial firms using psychological tests disguised as credit-card applications:

Did you catch it? Questions 1,2,4,7 are taken from the ‘Mini-mental State Examination’ which is a quick test given by medical professionals to see if a patient is suffering from dementia. (It’s a little blunt, but we can always hire some psychologist and marketers for the final version. They’re cheap to hire.) We can use this test to subtly increase limits, and break out the best automated tricks and traps mechanisms, on those whose dementia lights up in our surveys. Anyone who flags all four can get a giant increase in balance and get their due dates moved to holidays where the Post Office is slowest! We’d have to be very subtle about it, because there are many nanny-staters out there who’d want to coddle citizens here.

Once regulators get involved, this could easily lead to mandatory psychological tests for investors. That might be bad enough but we must recall that leftists have been searching for reasons to dismiss conservatives as cognitively inferior for decades. (I have not forgotten that paper from the Berkeley psychology department, earlier discussed here.) We might see a society in which conservatives are forbidden to make investment decisions.

The next stage, of course, is a society in which nearly everybody is forbidden to make investment decisions. (ObSF: “SQ” by Ursula LeGuin.)

Any resulting bankruptcies will, of course, be blamed on capitalism and used as a pretext for more regulations.