Tag Archives: Regulations

Who Needs Washington?

On healthcare and climate change, governors step in where Congress can’t – or won’t.
By Susan Milligan – Congress may be unable or unwilling to pass major legislation.

Governors and states, lauded as laboratories of democracy at best and recalcitrant junior players at worst, are stepping up to fill the power void.

And while governors are more empowered to stop federal policies or legislation than to force their enactment, the state players can have a great deal of influence over how the whole nation – and not just their constituencies – live, experts say.

On climate change, too, governors in both parties are implementing environmental policies Trump has rejected as too onerous on business.

The sheer size and economic influence of states can push national policy and trends as well. Texas, with its big buying power in school textbooks, has an outsized influence on details such as questioning evolution in science textbooks.

And while California’s greenhouse emissions standard might not be much liked by industry, which one would refuse to do business with the Golden State, which has the sixth-biggest economy in the world? And when states can’t stop Washington from passing policies, they can slow-walk their implementation or scream so loudly Washington is forced to regroup. more> https://goo.gl/zU7ruc

Silicon Valley Isn’t Special

By Conor Sen – Silicon Valley has a perception problem. Steve Jobs once said, speaking about the irreverent culture he helped create, that “it’s better to be a pirate than join the navy.” This ethos served the community well when its firms existed at “pirate scale.”

But now Silicon Valley’s most successful companies have become some of the largest in the world.

It’s time to drop the pretense that Silicon Valley deserves special treatment.

Facebook and Google are content and advertising companies, digital evolutions of print and television companies that came before them.

Amazon’s core e-commerce business is just a digital Wal-Mart.

Apple’s iPhone product cycle, with its annual incremental improvements, has parallels to the personal computer industry in the 1990s or even the Detroit “Big Three” automakers in the 1960s.

They deserve the same scrutiny from regulatory and labor watchdogs that their old-economy peers get. more> https://goo.gl/yNbK7c

Are Index Funds Evil?

A growing chorus of experts argue that they’re strangling the economy—and must be stopped.
By Frank Partnoy – Index funds have grown exponentially since John Bogle founded Vanguard in the mid-1970s.

The top three families of index funds each manage trillions of dollars, collectively holding 15 to 20 percent of all the stock of major U.S. corporations. Best of all for their investors, index funds have consistently beaten the performance of stock-pickers and actively managed funds, whose higher fees may support the Manhattan lifestyle of many bankers, but turn out not to deliver much to customers.

Concerns about the potential dangers of shareholder diversification first surfaced back in 1984, not long after index funds themselves did. Julio Rotemberg, then a newly minted economist from Princeton, posited that “firms, acting in the interest of their shareholders,” might “tend to act collusively when their shareholders have diversified portfolios.” The idea, which Rotemberg explored in a working paper, was that if investors own a slice of every firm, they will make more money if firms compete less and collectively raise prices, at the expense of consumers. Knowing this, the firms’ managers will de-emphasize competition and behave more cooperatively with one another. more> https://goo.gl/AWXivG

Make Congress Great Again

By Matthew Spalding – Today, the primary function of government is to regulate.

When Congress writes legislation, it uses very broad language that turns extensive power over to agencies, which are also given the authority of executing and often adjudicating violations of their regulations in particular cases. The result is that most of the actual decisions of lawmaking and public policy – decisions previously the constitutional responsibility of elected legislators – are delegated to bureaucrats whose “rules” have the full force and effect of laws passed by Congress.

The modern Congress is almost exclusively a supervisory body exercising limited oversight over administrative lawmakers.

If the development of the rule of law and constitutional government is the most significant accomplishment of the long history of human liberty, the greatest political revolution in the United States since the establishment of the Constitution has been the shift of power away from the lawmaking institutions of republican government to an oligarchy of experts who rule by regulation over virtually every aspect of our lives.

The result is an increasingly unbalanced structural relationship between what amounts to an executive–bureaucratic branch that can act with or without Congress to pursue common goals, and an ever-weakening legislative branch unable or unwilling to exercise its powers to check the executive or rein in a metastasizing bureaucracy. more> https://goo.gl/Jp3xRz

The crisis of expertise

BOOK REVIEW

The Death of Expertise: The Campaign Against Established Knowledge and Why It Matters, Author: Tom Nichols.
Expert Political Judgment: How Good Is It? How Can We Know? Author: Philip Tetlock.

By Tom Nichols – Experts get things wrong all the time.

The effects of such errors range from mild embarrassment to wasted time and money; in rarer cases, they can result in death, and even lead to international catastrophe. And yet experts regularly ask citizens to trust expert judgment and to have confidence not only that mistakes will be rare, but that the experts will identify those mistakes and learn from them.

Day to day, laypeople have no choice but to trust experts. We live our lives embedded in a web of social and governmental institutions meant to ensure that professionals are in fact who they say they are, and can in fact do what they say they do. Universities, accreditation organizations, licensing boards, certification authorities, state inspectors and other institutions exist to maintain those standards.

Science is learning by doing. Laypeople are uncomfortable with ambiguity, and they prefer answers rather than caveats. But science is a process, not a conclusion. Science subjects itself to constant testing by a set of careful rules under which theories can be displaced only by other theories. Laypeople cannot expect experts to never be wrong; if they were capable of such accuracy, they wouldn’t need to do research and run experiments in the first place.

Democracy cannot function when every citizen is an expert … more> https://goo.gl/NpQgga

Why Wall Street Went Astray: Eight Ways To Humanize Finance

BOOK REVIEW

The Wisdom of Finance: Discovering Humanity in the World of Risk and Return, Author: Mihir Desai.

By Steve Denning – Why did Wall Street go astray?

For most of the last several centuries, bankers and financiers were the pillars of society, the bastions of morality, the people in society that everyone respected.

Yet over the last few decades, Wall Street has become almost a synonym of evil. What went wrong? What can be done to restore the financial sector to the level of respect that it once enjoyed?

For people outside finance: Finance is deeply misunderstood, and we need to make it understandable to people so that they don’t demonize it. The way to do that is not through equations or graphs, but through stories. Finance is central to our lives and ignorance of it is very costly on an individual and societal level.

For people in finance: The core ideas of finance are quite life affirming and very noble — we should make people in finance aspire to them rather than expect so little of them. If finance is going to rehabilitate itself, and I do think it’s broken in many ways, the way to rehabilitate is not through regulation, or outrage, but rather returning to its basic underlying ideas, which are actually quite wonderful. In the long run, that’s how we make finance better — by getting back to the core ideas. more> https://goo.gl/Kr4Mnj

The American healthcare system is for profit, not patients

BOOK REVIEW

An American Sickness: How Healthcare Became Big Business and How You Can Take It Back, Author: Elisabeth Rosenthal.

By Elisabeth Rosenthal – Everyone knows the healthcare system is in disarray. We’ve grown numb to huge bills. We regard high prices as an inescapable American burden. We accept the drugmakers’ argument that they have to charge twice as much for prescriptions as in any other country because lawmakers in nations like Germany and France don’t pay them enough to recoup their research costs.

But would anyone accept that argument if we replaced the word prescriptions with cars or films?

The current market for healthcare just doesn’t deliver. It is deeply, perhaps fatally, flawed.

Imagine if you paid for an airplane ticket and then got separate and inscrutable bills from the airline, the pilot, the copilot, and the flight attendants. That’s how the healthcare market works.

In no other industry do prices for a product vary by a factor of ten depending on where it is purchased, as is the case for bills I’ve seen for echocardiograms, MRI scans, and blood tests to gauge thyroid function or vitamin D levels.

The price of a Prius at a dealership in Princeton, New Jersey, is not five times higher than what you would pay for a Prius in Hackensack and a Prius in New Jersey is not twice as expensive as one in New Mexico.

The price of that car at the very same dealer doesn’t depend on your employer, or if you’re self-employed or unemployed. Why does it matter for healthcare? more> https://goo.gl/5oBK5k

Behavioral Insights: A New Tool for Performance Management

By Michael Kalin and Lindsay Moore – Now, through What Works Cities, an initiative launched by Bloomberg Philanthropies to help mid-sized cities use data and evidence to improve decision-making and results, innovators in municipal governments are taking the next step in process improvement, integrating behavioral science into their toolkits and rigorously testing these insights to understand what works.

These efforts center on helping improve service delivery by taking the science of human decision-making into account. While we know intuitively that people are not always entirely rational actors, too often policy is designed as if we were. more> https://goo.gl/HoIBd1

How Norway Proves Laissez-faire Economics Is Not Just Wrong, It’s Toxic.

By David S. Wilson, Dag O. Hessen – For most of human existence, until a scant 10 or 15 thousand years ago, the human ladder was truncated. All groups were small groups whose members knew each other as individuals. These groups were loosely organized into tribes of a few thousand people, but cities, provinces, and nations were unknown.

Today, over half the earth’s population resides in cities and the most populous nations teem with billions of people, but groups the size of villages still deserve a special status. They are the social units that we are genetically adapted to live within and they can provide a blueprint for larger social units, including the largest of them all – the global village of nations.

Modern nations differ greatly in how well they function at the national scale. Some manage their affairs efficiently for the benefit of all their citizens. They qualify at least as crude superorganisms.

Other nations are as dysfunctional as a cancer-ridden patient or an ecosystem ravaged by a single species. Whatever teamwork exists is at a smaller scale, such as a group of elites exploiting the nation for its own benefit.

The nations that work have safeguards that prevent exploitation from within, like scaled-up villages.

The nations that don’t work will probably never work unless similar safeguards are implemented. more> https://goo.gl/r9OigY

Hierarchy is either strictly constrained or it is indefensible

BOOK REVIEW

Just Freedom, Author: Philip Pettit.

By Philip Pettit – This thesis really is unfashionable, because of the extreme way in which they understand hierarchy at the abstract level.

‘When we talk about hierarchies here,’ they say at the outset, ‘we mean those distinctions and rankings that bring with them clear power differentials.’ And, sharpening the concept even further, they say later that it is ‘a condition in which one adult commands, threatens or forces another adult to do something’.

Nor is this a sort of hierarchy justified by fault or failing on the part of the subordinated individual: that person might be ‘innocent of any wrongdoing, competent to make decisions’ and so on. It is illustrated, they suggest, by ‘political paternalism’, which is defined as ‘coercive interference with autonomy’.

More generally, the essay sketches an attractive architecture of political power in which experts certainly command requisite esteem but their role ‘is often not as decision-makers, but as external resources to be consulted by a panel of non-specialist generalists’. This architecture, it is said, would involve ‘a kind of collective, democratic decision-making that makes use of hierarchies of expertise without slavishly deferring to them’.

There are no objectionable power differentials in a system where there is ‘democratic accountability’ – however proximately insulated – and where there are checks and balances that restrain the different authorities. more> https://goo.gl/812tkO