13 ms·

This is one of those unfortunate situations where the the problem is clear, but the solution isn't, and proposed solutions can always be attacked from either en

This is one of those unfortunate situations where the the problem is clear, but the solution isn't, and proposed solutions can always be attacked from either end of the extreme perspectives. So we get stuck with semi-dysfunctional regulatory bodies at best, and captured extensions of corporate interests passing anti-competitive regulations at worst.

salawat 7y ago
The solution is clear. Regulatory bodies need to take into consideration size, age, and frequency of violation by the regulated in terms of exacting punishment on new entrants. For instance; BigFin fintech company gets caught violating Anti-Money Laundering regulations. Big fine. SmallFin fintech gets caught: slap on the wrist, thou shalt make a remediation plan, and here are the milestones you have to meet. SmallFin continues doing business, but is on the regulators radar. SmallFin caught again? Fine. Now. Let's say SmallFin dissolves, but the key players move and incorporate as YetAnotherSmallFin (different Corp, mostly same people). Get caught? Regulators should look at the people who have been dinged before, and should know better, and regulation should be less forgiving based on that. The fact is, a great deal gets hidden under "the Corporate Veil" that probably shouldn't be so easily divested from by those looking to abuse the system. A regulator should by and large be a constructive guiding hand; not just ssmern as something to be worked around in the process of finding new and interesting ways to do shady things. The catch here is you need to be able to attract high quality people to run the regulator, and I really have no solution for that.
- savant_penguin 7y ago
  The solution to excessive regulation is less regulation, not more. These things tend to backfire.
  - gumby 7y ago
    That may be true (I tend to agree) but it is just as hard to implement. It's not a magic bullet.
  - dredmorbius 7y ago
    The fix for bad regulation to poor effect is good regulation to beneficial effect. "Excessive" and "less" are not synonyms for "bad" and "good". This isn't about quantity, it's about quality.
    - AnthonyMouse 7y ago
      Yes, but also no. One of the big problems is that regulations are immortal. They get passed and never repealed. This causes two problems. First, they don't go away even if they're bad. Second, they accumulate. That's especially problematic for bad regulations, but it's even a problem for good regulations. If you have a boat with five tons of idle carrying capacity and you decree that it carry four tons of the king's freight, all is well and there is a net benefit produced. But if you decree that it carry eight tons of the king's freight, it sinks. So if you want to add new rules, you need to find some old ones to take back out. And you should be uniquely careful what you add to begin with, because every one has an opportunity cost, and even bad rules are sticky.
      - Ericson2314 7y ago
        We rarely net delete/discard shitty software either. But we could. There's no fundamental reason.
        AnthonyMouse 7y ago
        Shitty software can be ignored without being deleted. Hard to ignore shitty laws.
      - dredmorbius 7y ago
        There is such a thing as sunset provisions, though they are not applied as regularly as one might hope. Laws are not of necessity eternal. https://en.wikipedia.org/wiki/Sunset_provision https://en.wikipedia.org/wiki/Sunset_provision Though yes, that is a legitimate issue.
        7y ago
  - FridgeSeal 7y ago
    The solution to (toothless, deliberately ineffective) regulation (built by lobbying and incumbents) is not less regulation, it's regulation not constructed by vested interests.
  - hdfbdtbcdg 7y ago
    Deregulation of the financial sector has caused several major financial crashes.
  - shkkmo 7y ago
    That's not a solution, it's just a contrapostive. The solution is to change/improve the system that is creating the regulations. There will almost definitely be new regulations involved in doing this. I don't see how a system that creates excessive regulation can be expected to constructively par down that regulation without significant changes to that system.
- paulddraper 7y ago
  In reality: Little company Uber flaunt the law until it becomes big company Uber that can afford its own lobbiests.
  - hnick 7y ago
    Hate to nitpick (that's a lie), but the word is flout. I think Uber is interesting in that they actually did offer a superior technological solution to a social problem (driver and rider safety and trust), which is usually doesn't work since social problems are messy. I think this is why their "ask for forgiveness, not permission" strategy paid off in most markets - the people wanted them to win.
kortilla 7y ago
The problem, in the US, is that the party which hates big businesses is the same party that loves to use regulations to fix things.
- macawfish 7y ago
  Clearly this problem transcends party politics.
  - zik 7y ago
    And countries.
    - MaxBarraclough 7y ago
      I wouldn't say so. Lobbying and legal bribery are far more prevalent in the US than in Europe.
      - qaq 7y ago
        Looking at Russia bankrolling politicians and parties across EU legal vs not legal does not appear to matter much.
ra1n85 7y ago
How is the solution not clear? Clamp down on lobbying. Kill the revolving door between government and board rooms.
- timClicks 7y ago
  Rhetoric like that is actually indicative of how difficult those suggestions are to implement. Your suggestions are non-specific, which means that any practical measures suggested on the basis of them will be attacked by everyone for being too weak, too strong, too narrow or too broad.
- deleted 7y ago
  [deleted]
- rolltiide 7y ago
  government: here's this new thing, we should create a license for it enthusiast building company around that new thing: hey wait that doesn't make sense, this is supposed to be for everyone that enthusiast is now lobbying. is there a specific other situation you were hoping to clamp down on that doesn't rope in the enthusiast?
- chongli 7y ago
  Because lobbying is the right of every free citizen to communicate their wishes to their elected representatives. Get rid of that and we might as well have an unaccountable dictatorship. The real problem with society is that we try to build static structures (laws) in an attempt to foil dynamic adversaries (humans). This simply does not work.
  - kevingadd 7y ago
    This is true, but the problem was not nearly as bad before Citizens United (which basically freed corporations up to throw massive amounts of money into politics). If lobbying was actually limited to citizens or small groups of citizens the negative impact could be reduced. Many other countries aren't impacted by regulatory capture as bad as the US.
huntertwo 7y ago
Seems like the regulatory bodies don’t actually function to protect the consumer, but rather to protect the interests of the corporations that lobby. A good example of this is the telecom industry.
- deleted 7y ago
  [deleted]
- maximente 7y ago
  regulatory capture is often just a rational response from a corporation once it gets to a certain size. the value add of $1 dollar of lobbying/capture efforts goes farther than $1 in R&D or whatever after a certain point. https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture
  - rayiner 7y ago
    If that was true, companies wouldn’t spend so much on R&D and so little on lobbying. Boeing is one of the top lobbying companies. Last year it spent $15 million on lobbying. It spent $5 billion on R&D. (It probably spent more on office entertainment, Christmas parties, retirement parties, etc., than lobbying.)
    - maximente 7y ago
      that's a good point. i should have said that at a certain size it makes sense for a corporation to "invest" in lobbying as a form of increasing profits instead of, say, using that amount to increase R&D. it may be that the required amount of lobbying money necessary for a larger corp is in relative terms tiny but in absolute terms somewhat large (e.g. $15mil gets you 80% of the way there, whereas $150mil only 85%; but a smaller corp can't chalk up the $15mil required for pareto or whatever distribution)
    - dredmorbius 7y ago
      Diminishing returns. You only need to buy so many legislators, and there's only so much competition. What stats you got for ROI on aerospace R&D vs. lobbying?
IIAOPSW 7y ago
I have an expression to describe problems that are only still problems because of the politics and incentives of fixing them. "solving the problem is half the problem"
lorenzorhoades 7y ago
The solution is clear; ban lobbying. Why are you allowed to fund individuals running for office? That's called bribing, and it's illegal. BigCompanyX literally gives these people money in expectation of regulatory loopholes, and favoritism. Make a date prior to the election cycle where you have to register to run for office. From that date forward, allow no 'donations' or whatever they call it to come from individuals or corporations. Allow these people to run based on merits, not capital. Why are some of the great minds of our days not running for office?
shkkmo 7y ago
I can think of a fix that would have a massive impact: Get rid of congressional elections, move to a method of selecting representatives that selects a representative sample of the population such as a lottery among registered voters.

salawat 7y ago

The solution is clear. Regulatory bodies need to take into consideration size, age, and frequency of violation by the regulated in terms of exacting punishment on new entrants. For instance; BigFin fintech company gets caught violating Anti-Money Laundering regulations. Big fine. SmallFin fintech gets caught: slap on the wrist, thou shalt make a remediation plan, and here are the milestones you have to meet. SmallFin continues doing business, but is on the regulators radar. SmallFin caught again? Fine. Now. Let's say SmallFin dissolves, but the key players move and incorporate as YetAnotherSmallFin (different Corp, mostly same people). Get caught? Regulators should look at the people who have been dinged before, and should know better, and regulation should be less forgiving based on that. The fact is, a great deal gets hidden under "the Corporate Veil" that probably shouldn't be so easily divested from by those looking to abuse the system. A regulator should by and large be a constructive guiding hand; not just ssmern as something to be worked around in the process of finding new and interesting ways to do shady things. The catch here is you need to be able to attract high quality people to run the regulator, and I really have no solution for that.

savant_penguin 7y ago
The solution to excessive regulation is less regulation, not more. These things tend to backfire.
- gumby 7y ago
  That may be true (I tend to agree) but it is just as hard to implement. It's not a magic bullet.
- dredmorbius 7y ago
  The fix for bad regulation to poor effect is good regulation to beneficial effect. "Excessive" and "less" are not synonyms for "bad" and "good". This isn't about quantity, it's about quality.
  - AnthonyMouse 7y ago
    Yes, but also no. One of the big problems is that regulations are immortal. They get passed and never repealed. This causes two problems. First, they don't go away even if they're bad. Second, they accumulate. That's especially problematic for bad regulations, but it's even a problem for good regulations. If you have a boat with five tons of idle carrying capacity and you decree that it carry four tons of the king's freight, all is well and there is a net benefit produced. But if you decree that it carry eight tons of the king's freight, it sinks. So if you want to add new rules, you need to find some old ones to take back out. And you should be uniquely careful what you add to begin with, because every one has an opportunity cost, and even bad rules are sticky.
    - Ericson2314 7y ago
      We rarely net delete/discard shitty software either. But we could. There's no fundamental reason.
      - AnthonyMouse 7y ago
        Shitty software can be ignored without being deleted. Hard to ignore shitty laws.
    - dredmorbius 7y ago
      There is such a thing as sunset provisions, though they are not applied as regularly as one might hope. Laws are not of necessity eternal. https://en.wikipedia.org/wiki/Sunset_provision https://en.wikipedia.org/wiki/Sunset_provision Though yes, that is a legitimate issue.
      - 7y ago
- FridgeSeal 7y ago
  The solution to (toothless, deliberately ineffective) regulation (built by lobbying and incumbents) is not less regulation, it's regulation not constructed by vested interests.
- hdfbdtbcdg 7y ago
  Deregulation of the financial sector has caused several major financial crashes.
- shkkmo 7y ago
  That's not a solution, it's just a contrapostive. The solution is to change/improve the system that is creating the regulations. There will almost definitely be new regulations involved in doing this. I don't see how a system that creates excessive regulation can be expected to constructively par down that regulation without significant changes to that system.
paulddraper 7y ago
In reality: Little company Uber flaunt the law until it becomes big company Uber that can afford its own lobbiests.
- hnick 7y ago
  Hate to nitpick (that's a lie), but the word is flout. I think Uber is interesting in that they actually did offer a superior technological solution to a social problem (driver and rider safety and trust), which is usually doesn't work since social problems are messy. I think this is why their "ask for forgiveness, not permission" strategy paid off in most markets - the people wanted them to win.

kortilla 7y ago

The problem, in the US, is that the party which hates big businesses is the same party that loves to use regulations to fix things.

macawfish 7y ago
Clearly this problem transcends party politics.
- zik 7y ago
  And countries.
  - MaxBarraclough 7y ago
    I wouldn't say so. Lobbying and legal bribery are far more prevalent in the US than in Europe.
    - qaq 7y ago
      Looking at Russia bankrolling politicians and parties across EU legal vs not legal does not appear to matter much.

ra1n85 7y ago

How is the solution not clear? Clamp down on lobbying. Kill the revolving door between government and board rooms.

timClicks 7y ago
Rhetoric like that is actually indicative of how difficult those suggestions are to implement. Your suggestions are non-specific, which means that any practical measures suggested on the basis of them will be attacked by everyone for being too weak, too strong, too narrow or too broad.
deleted 7y ago
[deleted]
rolltiide 7y ago
government: here's this new thing, we should create a license for it enthusiast building company around that new thing: hey wait that doesn't make sense, this is supposed to be for everyone that enthusiast is now lobbying. is there a specific other situation you were hoping to clamp down on that doesn't rope in the enthusiast?
chongli 7y ago
Because lobbying is the right of every free citizen to communicate their wishes to their elected representatives. Get rid of that and we might as well have an unaccountable dictatorship. The real problem with society is that we try to build static structures (laws) in an attempt to foil dynamic adversaries (humans). This simply does not work.
- kevingadd 7y ago
  This is true, but the problem was not nearly as bad before Citizens United (which basically freed corporations up to throw massive amounts of money into politics). If lobbying was actually limited to citizens or small groups of citizens the negative impact could be reduced. Many other countries aren't impacted by regulatory capture as bad as the US.

huntertwo 7y ago

Seems like the regulatory bodies don’t actually function to protect the consumer, but rather to protect the interests of the corporations that lobby. A good example of this is the telecom industry.

deleted 7y ago
[deleted]
maximente 7y ago
regulatory capture is often just a rational response from a corporation once it gets to a certain size. the value add of $1 dollar of lobbying/capture efforts goes farther than $1 in R&D or whatever after a certain point. https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture
- rayiner 7y ago
  If that was true, companies wouldn’t spend so much on R&D and so little on lobbying. Boeing is one of the top lobbying companies. Last year it spent $15 million on lobbying. It spent $5 billion on R&D. (It probably spent more on office entertainment, Christmas parties, retirement parties, etc., than lobbying.)
  - maximente 7y ago
    that's a good point. i should have said that at a certain size it makes sense for a corporation to "invest" in lobbying as a form of increasing profits instead of, say, using that amount to increase R&D. it may be that the required amount of lobbying money necessary for a larger corp is in relative terms tiny but in absolute terms somewhat large (e.g. $15mil gets you 80% of the way there, whereas $150mil only 85%; but a smaller corp can't chalk up the $15mil required for pareto or whatever distribution)
  - dredmorbius 7y ago
    Diminishing returns. You only need to buy so many legislators, and there's only so much competition. What stats you got for ROI on aerospace R&D vs. lobbying?

IIAOPSW 7y ago

I have an expression to describe problems that are only still problems because of the politics and incentives of fixing them. "solving the problem is half the problem"

lorenzorhoades 7y ago

The solution is clear; ban lobbying. Why are you allowed to fund individuals running for office? That's called bribing, and it's illegal. BigCompanyX literally gives these people money in expectation of regulatory loopholes, and favoritism. Make a date prior to the election cycle where you have to register to run for office. From that date forward, allow no 'donations' or whatever they call it to come from individuals or corporations. Allow these people to run based on merits, not capital. Why are some of the great minds of our days not running for office?

shkkmo 7y ago

I can think of a fix that would have a massive impact: Get rid of congressional elections, move to a method of selecting representatives that selects a representative sample of the population such as a lottery among registered voters.