Welcome To Over-Regulated America
In The Economist:
Two forces make American laws too complex. One is hubris. Many lawmakers seem to believe that they can lay down rules to govern every eventuality. Examples range from the merely annoying (eg, a proposed code for nurseries in Colorado that specifies how many crayons each box must contain) to the delusional (eg, the conceit of Dodd-Frank that you can anticipate and ban every nasty trick financiers will dream up in the future). Far from preventing abuses, complexity creates loopholes that the shrewd can abuse with impunity.The other force that makes American laws complex is lobbying. The government's drive to micromanage so many activities creates a huge incentive for interest groups to push for special favours. When a bill is hundreds of pages long, it is not hard for congressmen to slip in clauses that benefit their chums and campaign donors. The health-care bill included tons of favours for the pushy. Congress's last, failed attempt to regulate greenhouse gases was even worse.
Complexity costs money. Sarbanes-Oxley, a law aimed at preventing Enron-style frauds, has made it so difficult to list shares on an American stockmarket that firms increasingly look elsewhere or stay private. America's share of initial public offerings fell from 67% in 2002 (when Sarbox passed) to 16% last year, despite some benign tweaks to the law. A study for the Small Business Administration, a government body, found that regulations in general add $10,585 in costs per employee. It's a wonder the jobless rate isn't even higher than it is.
A plea for simplicity
...America needs a smarter approach to regulation. First, all important rules should be subjected to cost-benefit analysis by an independent watchdog. The results should be made public before the rule is enacted. All big regulations should also come with sunset clauses, so that they expire after, say, ten years unless Congress explicitly re-authorises them.
More important, rules need to be much simpler. When regulators try to write an all-purpose instruction manual, the truly important dos and don'ts are lost in an ocean of verbiage. Far better to lay down broad goals and prescribe only what is strictly necessary to achieve them. Legislators should pass simple rules, and leave regulators to enforce them.
Would this hand too much power to unelected bureaucrats? Not if they are made more accountable. Unreasonable judgments should be subject to swift appeal. Regulators who make bad decisions should be easily sackable. None of this will resolve the inevitable difficulties of regulating a complex modern society. But it would mitigate a real danger: that regulation may crush the life out of America's economy.
Via OfTwoMinds/AgainstCronyCapitalism
What is there to complain about?
The public obviously wants this. Some have even bought into the idea that corporations pay taxes (they do not) and can do whatever they want (no, they have a charter for that).
Many regulations are OK. Those which are punitive are ther precisely because the public doesn't know and doesn't care.
And it's not like any member of the public will turn down a job as one of those unelected bureaucrats, who are then expected to do something.
Radwaste at April 11, 2012 2:13 AM
First, all important rules should be subjected to cost-benefit analysis by an independent watchdog.
Wait, what? We can't have rules that might not be cost effective?
I think someone is missing the point of what rules are supposed to be.
By this kind of thinking, we should get rid of red lights, because we waste a lot of time and gas sitting at red lights, and that's not cost-effective.
Far better to lay down broad goals and prescribe only what is strictly necessary to achieve them.
Far better for the companies to get away with the same things they have been. After all, if the rules don't spell out something as being prohibited, that implies that something is allowed.
This idiot does know that Sarbanes-Oxley only applies to publicly traded companies, right? So it doesn't really affect small businesses.
And while we're talking about SarbOx, it mostly applies to how your financial records and reporting is done, which if done correctly (and above-board) will not really need a lot of repair to meet the provisions of the law.
DrCos at April 11, 2012 3:45 AM
DrCos: "By this kind of thinking, we should get rid of red lights, because we waste a lot of time and gas sitting at red lights, and that's not cost-effective."
Actually in some cases we should get rid of them for safetys sake. I don't have the link, I believe it was by freakenomics people. Basically there was an interesting story where the red light on a intersection got destroyed, by an accident, and they were without for quite a whilewhile a part was on order. The number of accidents at that intersection dropped enough during the time of no traffic light that people noticed, and started experimenting.
The thery went that with all the traffic lights people stop paying attention to the road and only the lights. But without lights people were forced to pay attention, which lowered accidents.
Joe J at April 11, 2012 11:47 AM
We need a law that states any law must be written in five pages or less.
Stinky the Clown at April 11, 2012 12:42 PM
Many rules/regulations/guidelines are beneficial. But many are not, also. I have said for years that these, and indeed laws as well, should have a "Sunset Clause" automatically applied, possibly exceptng treason. OTOH, I agree with earlier commenters that "cost/benefit" is not all that often the major concern.
E.g., [non-Federal] laws criminalise spitting on the sidewalk. These were passed in the early 1900s because of TB and "Spanish" flu, not because it is a disgusting thing to do. A review would probably reduce it from a felony to a misdemeanor, or drop it.
And then there is the case of the small meatpacking plant that was replacing the flooring on the cutting-room floor. EPA said it would fine the company $1500/day unless the new floor was smooth [tile] so as to be easily cleaned: OSHA said it would impose a fine of #1500/day unless the new floor was gridded so as to provide a non-skid surface for the employees. Neither agency has procedures to contest such regulations.
John A at April 11, 2012 2:45 PM
We need a law that states any law must be written in five pages or less.
Makes me think of the Daily Show...
"My name is Herman Caine and I do not like to read!"
DrCos at April 11, 2012 5:31 PM
"This idiot does know that Sarbanes-Oxley only applies to publicly traded companies, right? So it doesn't really affect small businesses."
Actually, it's a huge hit to small business, because it cuts them off from financing via stock sales. That effectively puts a growth cap on a lot of small businesses. And it reduces the amount of competition that the big guys have to face.
"And while we're talking about SarbOx, it mostly applies to how your financial records and reporting is done, which if done correctly (and above-board) will not really need a lot of repair to meet the provisions of the law."
That's not what every accountant I've ever talked to about it says. They love Sarb-Ox because it generates a lot of business for them, but it's full of self-contradictions and it's easily possible for a totally well-intentioned and above-board company to violate the law without realizing it. In fact, I've had several accountants assure me that 100% compliance is impossible, and that the government could use Sarb-Ox as a political weapon if it chose to.
Cousin Dave at April 11, 2012 6:56 PM
My question is how the MDS 2.0 went from something like 7 pages to MDS 3.0 went to something like a 27 page document.
Note that this is the "MINIMUM DATA SET (MDS)". Every single nursing home has to follow this to house your Medicare parent in a nursing home.
Anonymous Coward at April 11, 2012 9:19 PM
Leave a comment