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When you pass new regulation (requirements), you generate new costs associated with providing $service_or_product. When costs go up, they are passed on to consu

When you pass new regulation (requirements), you generate new costs associated with providing $service_or_product. When costs go up, they are passed on to consumers. Now that your $service_or_product is regulated by 17 regulations that cost an average of $x each, your product now costs $base_price + ($x * 17) dollars. People with low income are less likely to be able to afford it.

AlexandrB 3y ago
This is extremely context sensitive. Antitrust regulation doesn't require a "compliance" department unless you're already huge and doing things that might be considered anti-competitive. Likewise financial regulations like Glass-Steagal[1] prevent certain types of organizations (in this case hybrid commercial-investment banks) from existing - I don't see how this could result in compliance costs. [1] https://en.wikipedia.org/wiki/Glass–Steagall_legislation https://en.wikipedia.org/wiki/Glass–Steagall_legislation
unshavedyak 3y ago
Is there a better way to implement regulation then? Perhaps i'm unaware of what regulation means in this context, but a lot (not all!) of regulation serves a purpose, or did originally. Ie safety regulation for requiring how your home wiring is done; that builders can't skimp and use thin wiring or etc. Food safety regulation for how long food is allowed out of cooling, temperature requirements for cooling, etc. These obviously serve a goal, but if you're saying that they also cause inequality, what is the better solution? Do we remove all safety rails? Or are some seen as essential, so the debate isn't pro or anti regulation but merely which ones are worth the cost? etc
vicktour 3y ago
The best part about this is removing regulations wont change any prices. They will just keep the profits and continue to raise prices. 1) Company Complains about regulations 2) Gov Removes Regulations 3) Companies do dumb stuff 4) Gov Applies Regulations 5) People forget about dumb stuff 6) Return to step 1. Case In Point: SVB
- sharemywin 3y ago
  Not too mention that companies consolidate to cartels(I'm looking at you industry trade groups) which have significant pricing power so the cost usually don't end up with the consumer.
sharemywin 3y ago
But a lot of times those regulations are enforcing things like health and safety or other types of cost shifting. where either the there is large differential in the expertise on one side of a transaction or a third party is the one paying the costs of the transaction. EPA - polluting for instance. In 1969, the Cuyahoga River caught on fire in Cleveland just a few miles north of Cuyahoga Valley National Park. When rivers start catching of fire the companies doing the polluting aren't really going to stop doing it and since most consumers live pay check to check they will generally chose the cheapest option available. even if they end up paying 10X the cost down the line.

AlexandrB 3y ago

This is extremely context sensitive. Antitrust regulation doesn't require a "compliance" department unless you're already huge and doing things that might be considered anti-competitive. Likewise financial regulations like Glass-Steagal[1] prevent certain types of organizations (in this case hybrid commercial-investment banks) from existing - I don't see how this could result in compliance costs. [1] https://en.wikipedia.org/wiki/Glass–Steagall_legislation https://en.wikipedia.org/wiki/Glass–Steagall_legislation

unshavedyak 3y ago

Is there a better way to implement regulation then? Perhaps i'm unaware of what regulation means in this context, but a lot (not all!) of regulation serves a purpose, or did originally. Ie safety regulation for requiring how your home wiring is done; that builders can't skimp and use thin wiring or etc. Food safety regulation for how long food is allowed out of cooling, temperature requirements for cooling, etc. These obviously serve a goal, but if you're saying that they also cause inequality, what is the better solution? Do we remove all safety rails? Or are some seen as essential, so the debate isn't pro or anti regulation but merely which ones are worth the cost? etc

vicktour 3y ago

The best part about this is removing regulations wont change any prices. They will just keep the profits and continue to raise prices. 1) Company Complains about regulations 2) Gov Removes Regulations 3) Companies do dumb stuff 4) Gov Applies Regulations 5) People forget about dumb stuff 6) Return to step 1. Case In Point: SVB

sharemywin 3y ago
Not too mention that companies consolidate to cartels(I'm looking at you industry trade groups) which have significant pricing power so the cost usually don't end up with the consumer.

sharemywin 3y ago

But a lot of times those regulations are enforcing things like health and safety or other types of cost shifting. where either the there is large differential in the expertise on one side of a transaction or a third party is the one paying the costs of the transaction. EPA - polluting for instance. In 1969, the Cuyahoga River caught on fire in Cleveland just a few miles north of Cuyahoga Valley National Park. When rivers start catching of fire the companies doing the polluting aren't really going to stop doing it and since most consumers live pay check to check they will generally chose the cheapest option available. even if they end up paying 10X the cost down the line.