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The trick here is defining "smart" versus "needless" regulations. It's not always an obvious difference. For example: lots of excessive state-level occupational

The trick here is defining "smart" versus "needless" regulations. It's not always an obvious difference. For example: lots of excessive state-level occupational licensing which effectively just creates cartels was passed with sensible arguments about protecting consumers from harm and poor quality. It's fairly easy to rationalize lots of regulations that don't work very well in practice. So just saying "it should be smart and not mindless" isn't really a solution to anything without a rigorous definition of what a "smart" regulation looks like.

JumpCrisscross 10y ago
I think of regulations as capital projects. There's an up-front political cost to passing them, an up-front cost to establishing them and then an ongoing cost to feeding the bureaucracy. Minimising that ongoing cost, or at least ensuring it's paid out of the gains from the regulation, would appear to be a dividing line.
epistasis 10y ago
Yes, that's exactly what I'm trying to point out! I'm not providing a solution, but merely saying that it's folly to treat all regulation as the enemy of free markets.
- ssambros 10y ago
  The point of "mindless "anti-regulation" is that "no regulations" is the default position, and it's the proponents of regulation who should substantiate their claims that a specific regulation should exist; also that the lack of sufficient evidence in favor should automatically result in the default position being more favorable. In relation to the Chesterton’s Fence parable, a lot of people think that the fact that no one knows why it's there is in itself the reason to remove the fence, since the most common reason the fences are built in the first place it to provide someone particular the advantage over everyone else (limit access to the territory, markets, etc).
  - rmxt 10y ago
    Perhaps on the North Sentinel Islands now, or 4,000 years or so elsewhere in the world, "no regulations" is / was the default position. That isn't the case for recent history in most of the world. Claiming that "no regulations" is the default position, and that all existing and future regulations must be reasoned, argued and articulated from first principles sounds like a distraction, more so than a reasonable way to approach the current political atmosphere.
- jumpman500 10y ago
  Groundbreaking. Do good regulations but not the pointless ones. I'll be sure to inform my Congress representative.
r00fus 10y ago
How about stopping the revolving door between those who are regulated and those is the agencies doing the regulation? Conflict of interest appointments result in probably the vast majority of anti-market, cartel-style behavior.
- bpodgursky 10y ago
  That's not a good idea. The alternative is having regulations written by people who have no idea what they are regulating, which is the whole problem. You can eliminate conflicts of interest via financial disclosures etc, without eliminating competence.
  - basseq 10y ago
    I agree with you, but is this also a symptom of another problem? I'm thinking about it in the government-to-industry direction, and particularly where compensation is so high for these ex-govvies. Why are these people worth so much? Either because: 1. The regulations are so complex to get around that companies need to pay a premium for that knowledge. (Bad.) 2. The regulations have so many loopholes that I need to hire someone to help me do whatever it is I want to do, but legally. (Bad.) Both of these would appear to favor entrenched players who can afford this talent.
    - grigjd3 10y ago
      People who used to be in government know the levers of power.
  - r00fus 10y ago
    So you either choose a potentially adversarial actor who knows exactly what they're doing, or someone who has to figure stuff out but has not vested interest? For the past two Presidential elections where the incumbent was term-limited, we've chosen the outsider candidate twice. If these positions weren't appointed but elected - one could assume that the outsider would be preferred. If conflicts of interest could be eliminated (I'd say reduced) via financial disclosures, why aren't they happening? I can name several appointees in the current and past 2 administrations that had conflicts of interest.
mikepurvis 10y ago
And the protection that results from this kind of regulation often comes to be taken for granted, even on relatively short timespans.
arwhatever 10y ago
"One of the great mistakes is to judge policies and programs by their intentions rather than their results." - Milton Friedman
- CocaKoala 10y ago
  In the matter of reforming things, as distinct from deforming them, there is one plain and simple principle; a principle which will probably be called a paradox. There exists in such a case a certain institution or law; let us say, for the sake of simplicity, a fence or gate erected across a road. The more modern type of reformer goes gaily up to it and says, "I don't see the use of this; let us clear it away." To which the more intelligent type of reformer will do well to answer: "If you don't see the use of it, I certainly won't let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it." - G. K. Chesterton An existing regulation might not be perfect, but that still doesn't mean you should get rid of it without considering why it was put into place initially.
zeteo 10y ago
Right on. The legislators who consult with lobbyists behind closed doors and then produce thousand page bills would argue that they also make "smart" regulation. Didn't they talk at length to the people who knew most about the issue? Doesn't the bill address lots of cases that would never occur to the "dumb" person? Yes, but the bill is totally ineffective for the average person and only helps the big players. What we arguably need is more "stupid" (as in "keep it simple, stupid") regulation. Constitutional Amendments are written in this style; also some antitrust legislation [1]. Complex regulations are vulnerable to a) hidden flaws - that tiny exception in article 57 paragraph 30 might turn out large enough to overturn all 56 previous articles. b) regulatory capture - lobbyists will, of course, introduce as many exceptions as possible if the text is long enough. c) the revolving door - if only a small group of people know the intricate details, they will soon be hired by the affected companies at a multiple of their previous salary. d) compliance cost - only large companies might be able to afford the compliance cost, which ends up concentrating the market further at the cost of the consumer (Dodd-Frank, anyone?). [1] https://en.wikipedia.org/wiki/Sherman_Antitrust_Act#Original_text https://en.wikipedia.org/wiki/Sherman_Antitrust_Act#Original...
- rayiner 10y ago
  Can you give an example of a regulation in the airline industry that's causing all these problems that is of the kind you describe? Because it sounds to me like a strawman.
  - passthefist 10y ago
    For one, there's cabotage restrictions. From wikipedia: > Cabotage rights are the right of a company from one country to trade in another country. In aviation, it is the right to operate within the domestic borders of another country. Most countries do not permit aviation cabotage, and there are strict sanctions against it, for reasons of economic protectionism, national security, or public safety. One notable exception is the European Union, whose Member States all grant cabotage rights to each other. Virgin America is usually regarded as one of the better airlines, and personally I've had pretty good experiences with them. I'll pay an extra twenty dollars for the extra customer service. It would have been nice to see the company grow larger and become a threat to the big 4 (Branson himself wanted to go in that direction), but it got bought/merged with Alaska Airlines. Alaska Airlines has announced they are killing off the Virgin America brand sometime in 2019. > "Because I'm not American, the US Department of Transportation stipulated I take some of my shares in Virgin America as non-voting shares, reducing my influence over any takeover," Branson wrote of his powerlessness to halt the pending merger. "So there was sadly nothing I could do to stop it." Cabotage ends up being a form of protectionism, though it's usually touted as a national security thing. Compare this to the EU, which has some dirt cheap flights. Ryanair might suck, but I've flown from Dublin to Amsterdam for $10. The EU has less restrictions (almost none for member states, I think?), so there's more competition. Some domestic airlines have been trying the Ryanair model, but I'd like to see what would happen if Ryanair was able to expand to the states. This also means that foreign airlines can't operate flights between US cities, even if they'd be a leg of a larger journey. Instead they're reliant on US carriers to get people to their hubs. Toronto, for example, is the largest hub for Air Canada, and they have flights to dozens of American cities. There's no real fear that Canadian planes are any less safe than American ones, yet you can't use Air Canada to fly on a single ticket from an American city, via Toronto, to another American city. Air Canada's website won't even let you search for flights between two American destinations. It's even worse for someone like Air Emirates. They only have a handful of places they fly out of in the states, so if you're flying from Dubai to somewhere not on that list you'd need another ticket. Maybe they'd like to do a San Francisco to NYC to Dubai flight, moving to a collector model, but they're stuck doing point to point. I'd imagine flying people into a domestic collector city first would be cheaper than the many non-stop flights they currently have. http://fortune.com/2016/04/04/richard-branson-virgin-america/ http://fortune.com/2016/04/04/richard-branson-virgin-america...
adamsea 10y ago
Sometimes you have to dig in and take things on a case-by-case basis. The article in question seemed to lay out useful and appropriate regulation for the airline industry.
Brockenstein 10y ago
IE it's hard to set regulations without being a subject matter expert. Most of the subject matter experts work in the industry to be regulated and we don't trust them to self-regulate and/or we just ignore subject matter experts in cases when we should listen to them.
gdubs 10y ago
This is why campaign finance reform is so important. Arguably it's not that law makers are incompetent at recognizing good regulation vs bad, but the incentive structure is messed up.

JumpCrisscross 10y ago

I think of regulations as capital projects. There's an up-front political cost to passing them, an up-front cost to establishing them and then an ongoing cost to feeding the bureaucracy. Minimising that ongoing cost, or at least ensuring it's paid out of the gains from the regulation, would appear to be a dividing line.

epistasis 10y ago

Yes, that's exactly what I'm trying to point out! I'm not providing a solution, but merely saying that it's folly to treat all regulation as the enemy of free markets.

ssambros 10y ago
The point of "mindless "anti-regulation" is that "no regulations" is the default position, and it's the proponents of regulation who should substantiate their claims that a specific regulation should exist; also that the lack of sufficient evidence in favor should automatically result in the default position being more favorable. In relation to the Chesterton’s Fence parable, a lot of people think that the fact that no one knows why it's there is in itself the reason to remove the fence, since the most common reason the fences are built in the first place it to provide someone particular the advantage over everyone else (limit access to the territory, markets, etc).
- rmxt 10y ago
  Perhaps on the North Sentinel Islands now, or 4,000 years or so elsewhere in the world, "no regulations" is / was the default position. That isn't the case for recent history in most of the world. Claiming that "no regulations" is the default position, and that all existing and future regulations must be reasoned, argued and articulated from first principles sounds like a distraction, more so than a reasonable way to approach the current political atmosphere.
jumpman500 10y ago
Groundbreaking. Do good regulations but not the pointless ones. I'll be sure to inform my Congress representative.

r00fus 10y ago

How about stopping the revolving door between those who are regulated and those is the agencies doing the regulation? Conflict of interest appointments result in probably the vast majority of anti-market, cartel-style behavior.

bpodgursky 10y ago
That's not a good idea. The alternative is having regulations written by people who have no idea what they are regulating, which is the whole problem. You can eliminate conflicts of interest via financial disclosures etc, without eliminating competence.
- basseq 10y ago
  I agree with you, but is this also a symptom of another problem? I'm thinking about it in the government-to-industry direction, and particularly where compensation is so high for these ex-govvies. Why are these people worth so much? Either because: 1. The regulations are so complex to get around that companies need to pay a premium for that knowledge. (Bad.) 2. The regulations have so many loopholes that I need to hire someone to help me do whatever it is I want to do, but legally. (Bad.) Both of these would appear to favor entrenched players who can afford this talent.
  - grigjd3 10y ago
    People who used to be in government know the levers of power.
- r00fus 10y ago
  So you either choose a potentially adversarial actor who knows exactly what they're doing, or someone who has to figure stuff out but has not vested interest? For the past two Presidential elections where the incumbent was term-limited, we've chosen the outsider candidate twice. If these positions weren't appointed but elected - one could assume that the outsider would be preferred. If conflicts of interest could be eliminated (I'd say reduced) via financial disclosures, why aren't they happening? I can name several appointees in the current and past 2 administrations that had conflicts of interest.

mikepurvis 10y ago

And the protection that results from this kind of regulation often comes to be taken for granted, even on relatively short timespans.

arwhatever 10y ago

"One of the great mistakes is to judge policies and programs by their intentions rather than their results." - Milton Friedman

CocaKoala 10y ago
In the matter of reforming things, as distinct from deforming them, there is one plain and simple principle; a principle which will probably be called a paradox. There exists in such a case a certain institution or law; let us say, for the sake of simplicity, a fence or gate erected across a road. The more modern type of reformer goes gaily up to it and says, "I don't see the use of this; let us clear it away." To which the more intelligent type of reformer will do well to answer: "If you don't see the use of it, I certainly won't let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it." - G. K. Chesterton An existing regulation might not be perfect, but that still doesn't mean you should get rid of it without considering why it was put into place initially.

zeteo 10y ago

Right on. The legislators who consult with lobbyists behind closed doors and then produce thousand page bills would argue that they also make "smart" regulation. Didn't they talk at length to the people who knew most about the issue? Doesn't the bill address lots of cases that would never occur to the "dumb" person? Yes, but the bill is totally ineffective for the average person and only helps the big players. What we arguably need is more "stupid" (as in "keep it simple, stupid") regulation. Constitutional Amendments are written in this style; also some antitrust legislation [1]. Complex regulations are vulnerable to a) hidden flaws - that tiny exception in article 57 paragraph 30 might turn out large enough to overturn all 56 previous articles. b) regulatory capture - lobbyists will, of course, introduce as many exceptions as possible if the text is long enough. c) the revolving door - if only a small group of people know the intricate details, they will soon be hired by the affected companies at a multiple of their previous salary. d) compliance cost - only large companies might be able to afford the compliance cost, which ends up concentrating the market further at the cost of the consumer (Dodd-Frank, anyone?). [1] https://en.wikipedia.org/wiki/Sherman_Antitrust_Act#Original_text https://en.wikipedia.org/wiki/Sherman_Antitrust_Act#Original...

rayiner 10y ago
Can you give an example of a regulation in the airline industry that's causing all these problems that is of the kind you describe? Because it sounds to me like a strawman.
- passthefist 10y ago
  For one, there's cabotage restrictions. From wikipedia: > Cabotage rights are the right of a company from one country to trade in another country. In aviation, it is the right to operate within the domestic borders of another country. Most countries do not permit aviation cabotage, and there are strict sanctions against it, for reasons of economic protectionism, national security, or public safety. One notable exception is the European Union, whose Member States all grant cabotage rights to each other. Virgin America is usually regarded as one of the better airlines, and personally I've had pretty good experiences with them. I'll pay an extra twenty dollars for the extra customer service. It would have been nice to see the company grow larger and become a threat to the big 4 (Branson himself wanted to go in that direction), but it got bought/merged with Alaska Airlines. Alaska Airlines has announced they are killing off the Virgin America brand sometime in 2019. > "Because I'm not American, the US Department of Transportation stipulated I take some of my shares in Virgin America as non-voting shares, reducing my influence over any takeover," Branson wrote of his powerlessness to halt the pending merger. "So there was sadly nothing I could do to stop it." Cabotage ends up being a form of protectionism, though it's usually touted as a national security thing. Compare this to the EU, which has some dirt cheap flights. Ryanair might suck, but I've flown from Dublin to Amsterdam for $10. The EU has less restrictions (almost none for member states, I think?), so there's more competition. Some domestic airlines have been trying the Ryanair model, but I'd like to see what would happen if Ryanair was able to expand to the states. This also means that foreign airlines can't operate flights between US cities, even if they'd be a leg of a larger journey. Instead they're reliant on US carriers to get people to their hubs. Toronto, for example, is the largest hub for Air Canada, and they have flights to dozens of American cities. There's no real fear that Canadian planes are any less safe than American ones, yet you can't use Air Canada to fly on a single ticket from an American city, via Toronto, to another American city. Air Canada's website won't even let you search for flights between two American destinations. It's even worse for someone like Air Emirates. They only have a handful of places they fly out of in the states, so if you're flying from Dubai to somewhere not on that list you'd need another ticket. Maybe they'd like to do a San Francisco to NYC to Dubai flight, moving to a collector model, but they're stuck doing point to point. I'd imagine flying people into a domestic collector city first would be cheaper than the many non-stop flights they currently have. http://fortune.com/2016/04/04/richard-branson-virgin-america/ http://fortune.com/2016/04/04/richard-branson-virgin-america...

adamsea 10y ago

Sometimes you have to dig in and take things on a case-by-case basis. The article in question seemed to lay out useful and appropriate regulation for the airline industry.

Brockenstein 10y ago

IE it's hard to set regulations without being a subject matter expert. Most of the subject matter experts work in the industry to be regulated and we don't trust them to self-regulate and/or we just ignore subject matter experts in cases when we should listen to them.

gdubs 10y ago

This is why campaign finance reform is so important. Arguably it's not that law makers are incompetent at recognizing good regulation vs bad, but the incentive structure is messed up.