When the government makes you waste a a day filling out paperwork to prove that your dog food doesn’t contain human remains, don’t blame the regulators. Blame the guy before you who made a buck by vertically integrating his cannery and his morgue.

I used to work in compliance and the number of regulations that are punitive punishments for bad things that actually happened is just astounding.

SOX compliance is arduous but it only exists (and is as strict as it is) because some banks decided to destroy the global economy just to make a bit of money and couldn't understand why this was a bad thing.

Sox was passed in response to Enron. While that may have been a big failure, it had no effect on the wider economy. In fact Enrons scandal only came out after the 2001 recession ended... the economy grew during and after Enron’s failure.

What are you talking about. It was a massive drag on the California economy while they existed. They were literally shutting the power system for millions of people down to jack the price.

That was more a failure of the artificially constructed electricity market. It didn't allow longterm contracts.

Weirdly enough, cities that had their own power companies could have such contracts and didn't get rolling blackouts. I worked in Santa Clara at the time and lived in Sunnyvale. We never lost power at work but frequently found all the clocks flashing when I got home.

Which sort of suggests that centralization is the problem, not public versus private. We had a private company failing and public power companies unperturbed.

Yet some how the same regulated market didn’t experience the same problems after their bankruptcy? Come on, you’re really stretching here when there is an obvious answer.

You seem to be looking to blame centralization to fit a preconceived normative view of economics rather than just acknowledging maybe markets were not effective or efficient in this particular instance and in fact suffered a massive distortion specifically because a decentralized profit motive allowed one party to abuse market making mechanisms and hijack the price setting function so crucial to efficiency.

I think if you and I lived on the same street and everybody on our street decided to generate and distribute our own power, we would never create such dysfunctional rules.

And if we did, we would probably change it the day after it failed.

Centralization enables a lot of good thing but also some bad things. Lobbying thrives on centralization because it is easier for decision makers to scam people they don't know, more likely to happen with centralization.

Have you ever lived in a neighborhood with a home owners association? Any institution that is made up of more that a few people will come up with rules that seem stupid. Even in a small scale like that.

my knowledge comes entirely from the documentary, but iirc Enron both created the energy market, allowing energy futures to be daytraded for the first time, and manipulated the market with bidding.

the market itself was a massively cool idea, it's just that Enron had a massive conflict of interest and played both sides. they should have stuck to being a market maker and spun off their trading arm.

But that has nothing to do with SOX. If Enron didn't commit fraud, they could have continued being a drag on the CA economy for years longer.

The CA blackouts predates the Enron fraud and accounting scandal by at least 6 months. At no time during the blackouts was anyone aware of Enrons fraud.

SOX was regulation to prevent that fraud. Notice, it does and says absolutely nothing about the energy market. That's because SOX was not designed to address the cause of the CA blackouts.

Destroyed the pensions of many people, though.

Why are Americans invested in their own employer? It serms excessively correlated. My company pays my pension into index funds.

This has changed for many large US companies when it comes to their 401k plans which are often the main vehicle for retirement savings (https://www.thestreet.com/story/13151412/1/how-your-retireme...). There are still many opportunities for a poorly balanced portfolio.

Hedge funds bought shares because of the cooked books and unreal returns.

Many are too lazy to do the research, and sadly, many lack basic financial literacy.

Should the government have waited for another half a dozen “Enrons” before acting? The whole point of regulation is to avoid such occurrences not as an “I told you so”

Oh, there were.

Tyco International Adelphia Peregrine Systems WorldCom (which was a big one)

And there were many more.

And how much time lapsed between identifying the problem, notification, committee meetings, proposal, final draft, voting, and enforcement?

How much business was lost through the two summers of rotating brown-outs? Datacenter outages? Maybe Enron didn't impact America, but thanks to America's pro-business, anti-consumer laws, Enron really hurt California.

> for bad things that actually happened is just astounding.

you are not kidding.

"You mean we have to monitor for this because someone ACTUALLY tried doing that before...?"

Sure, bad things happen. But there's a trade-off between regulatory burden and economic vibrancy and adaptability. We all know that taxi regulations sort of existed because a lot of tourists would get taken advantage of. But then, the taxi companies and politicians exploited it to promote local monopolies and enforced it with limited edition, expensive taxi medallions that prevented people from starting up legitimate cab companies to compete with the incumbents.

That sort of thing happens all the time and that opportunity cost is not often talked about.

Agreed. Though it's tough to square the fact that bad things happen sometimes with desire to do something. The Onion actually had a good video on this a few years ago:

https://politics.theonion.com/truck-accident-that-killed-raf...

SOX exists because of Enron / Arthur Anderson / Tyco / half a dozen others, not banks.

OP was thinking of Dodd Frank.

Right sentiment; here's an editing tweak that lets you make the point more precisely:

SOX compliance is arduous but it only exists (and is as strict as it is) because some company built a $60 billion market cap in 2000 with financial-statement mischief that concealed a bankruptcy in the making.

SOX predates the GFC by a decade.

Nah, blame the regulators too for thinking that filling out paperwork is likely to meaningfully dissuade someone from using human remains to make dog food. It was probably sufficient to explain to that one guy why that was bad.

>It was probably sufficient to explain to that one guy why that was bad.

Greed doesn't listen to reason.

....nor regulators.

Greed listens to regulators that have teeth, because then the expected benefit of non-compliance is negative.

With a functional government, regulations enable the regulators to punish people who do these things.

Since we're talking about human remains in dog food, there's already likely a litany of felonies involved in turning a person into dog food. The regulators just like to regulate.

> there's already likely a litany of felonies involved in turning a person into dog food

yes, it's a felony because of regulation, made by... regulators

IANAL, but I'd guess it's a felony because of legislation, made by legislators.

Theft is also forbidden by regulation, but thankfully I don't have to file daily reports yet to Theft-Prevention Agency listing all the things that I handled but not stolen today.

Theft is not forbidden by regulation, it's forbidden by laws.

What's the difference? Laws are written by legislators, i.e., the elected representatives. Regulations are written by agencies created and empowered by laws to oversee certain parts of the government/governmental functions.

Regulators work largely by requiring reports because most agencies don't have criminal enforcement powers, and thus can act only on the basis of what is (or isn't) reported...

The real difference is that theft is punishable under natural law regardless of what any regulators or legislators might say. There can be no consistent system which would permit theft while prohibiting a proportional punishment for it. If theft is permitted then enforced restitution (recovery of the stolen property) and punishment (fines) must also be permitted, because these are ultimately the same action.

Laws and regulations which are not merely codification of natural law ultimately come down to attempting to create rules which apply to some people and not others. Unfortunately, legislators and regulators get away with this all to often through a combination of good propaganda and willingness to employ unjustified force to achieve their goals.

You don't, but banks and pawn shops do.

It's not there to dissuade you. It's there to provide a paper trail in case you do something stupid.

Or have one page with a single checkbox that says "I understand it is illegal to use human remains in dog food"

Regulation isn't about informing people what the rules are, it's about people proving they are following the rules.

It's both. The level of paperwork depends on the risk profile.

Sure. And there is no way a stack of paperwork can prove you are -not- using human remains.

Check the box that you understand and expect possible, random inspections.

Would you prefer that regulators would sanction bad behaviour and throw people in jail post-facto, make-up-the-rules-as-they-go-along instead?

Because that's the most palatable alternative.

A long time ago, I worked in defense.

Our design engineers had to fill out government paperwork (many pages) that provided an estimate for how long the rest of the government paperwork would take.

Was it a first order estimate or did it include the time it took to fill itself out?

sounds like rocket equation to me, you carry mass that helps you carry mass that helps you carry mass...

To be fair, doesn't that describe agile development as well?

Instead of making everyone sign a stack of papers stating that their dog food doesn't contain human remains, the legislature could simply pass a law stating that you pay fines and/or go to jail if your dog food contains human remains. That way you avoid punishing people who act in good faith for the misdeeds of those who didn't.

Right, because there is no other option than to have the government get in everyone's business. Why should the government impose on my business because some asshole did something he shouldn't have? It's oppressive and we should fight it.

This “imposition” is a cost of doing business. If you don’t like it choose another line of business. For as long as there is a legitimate demand for the product/service in question someone will provide supply at a price point which is sustainable. The process of getting to that point may involve some companies trying and failing before others try and succeed. This is capitalism.

As someone who does a lot of work for state-level regulatory compliance for a winery, let me assure you that the proportion of effort devoted to establishing that we sell a safe product is exactly 0%. It's all about making sure we pay excise taxes and our labels don't violate some modern-day censor's notions of good taste.

The real fun ones are where we have to submit the curriculum for approval every time we make a change (considering we make small tweaks to curriculum every day - they did not plan for that use case).

Good thing there are APIs for printing and mailing changes to a diff :)

How long does it take to get the approval back? I bet they don't even read the list of changes.

The first draft they send highlighted grammar errors with a red pencil. After that I'm sure it's just stacking up somewhere. It's a waste for sure, but changing the system is a long process.

What I've learned is to always include a few token spelling and grammar errors in the first draft of anything so reviewers feel like they have done their job. /s

I used to run a pizzaria and the health inspector would stick around for ages, because he couldn't find anything to site me for. I combed through the specs and found something to keep him happy. It turns out to be a minor NY health code violation to store clothing on the same storage unit as food. So I attached a coat rack to the shelf that held sealed canned good. Problem solved.

You added a duck! https://blog.codinghorror.com/new-programming-jargon/

I'm 100% going to start doing Yoda Conditions. It's genius

See https://en.wikipedia.org/wiki/Law_of_triviality

This is actually a good idea. No /s needed.

This but unironically

Curious, what kind of changes are you making to the curriculum every day that would require you to submit them to the state for approval?

I've been following Lambda School and yourself on Twitter for a while now, and even looked at some resumes for our company.

I have to say, thank you for your thoughtful comments here and on Twitter, and your dedication to students. As a former teacher myself, I know the work is hard.

I only wish there was a Lambda School here in Philadelphia so I could teach here. :)

All of our instructors are remote, apply!

Oh, I didn't know you were still hiring instructors, thanks!

I wonder if there’s a First Amendment claim there.

Or, it serves as an appropriate barrier to prevent people from scamming prospective students out of huge sums of money.

Looking at student loan debt it appears that it was unsuccessful

Prevent other people from scamming students out of money.

Right but it'd be worse if you had the student loan debt AND don't get a degree (or at least a reputable one) because it's a scam.

I mean, is a university education not a sort of scam? They are giving people degrees that cost far too much to justify the kind of job you'll get coming out.

> I mean, is a university education not a sort of scam?

Whether or not "college education" in general is "a scam" can be debated for sure.

But we aren't talking about "college education" - imagine paying for "college education" but it's a scam so you end up with less money and no education.

I think komali2 was saying that's what happens right now — you end up with less than no money and no meaningful education.

It might be - especially in the US, where you have to pay for it (or go into debt); but it could be worse, and likely worse scams were run in the past until they were stamped out by regulation.

Study something that will get you a good job, if that’s what you’re interested in.

You need a happy medium here. You don't want to allow scammers of course, but also don't want to overly protect the incumbents so no one else can disrupt the space.

The happy medium is the have enforcement mechanisms of the tends of thousands of existing regulations that would put a scam business out of existence if a DA choose to.

The fact of the matter is that to protect people... you need to have a system where ordinary people can complain, and companies get taken to task.

99% of preventative/reporting regulation is just cronyism.

We may wish regulations were for a different reason, but this is certainly their most common use case.

Except, it doesn't, because if you're scamming people out of huge sums of money you don't give a shit if you're registered with the regulators.

You do if you want the scam to keep going. See Corinthian Colleges, for example. (Or Trump University's recent settlement, for a more recent example.)

https://en.m.wikipedia.org/wiki/Corinthian_Colleges

Have you ever heard of a company called Wells Fargo?

Couldn't that be dealt with in a private court?

Sure:

https://edition.cnn.com/2018/04/10/politics/trump-university...

Have you ever tried to draft regulation? Even tried to capture everything that could possibly go wrong or be harmful, even unexpectedly and inadvertently? All while knowing that everything you forget will be a “loophole” for the thousands or millions of people coming under the regulations you drafted in the future. And worse if you leave loopholes people will be hurt and then blame the very government trying to create protections in the first place? It’s easy to throw stones at the work of someone else, but this completely emerges to withstand a barrage of stones being thrown.

Right. The rational way to write regulations is to ban everything.

Which to me shows that "the regulatory state" is not the right model.

At what point did I say that? I merely said it’s hard to craft legislation that gets the balance right.

There will always be a regulatory state, the question is what is the authority that imposes the regulation; is it a democratic government, a private company that institutes policy and terms of service, a gang that rules by force and violence. No society I know of has existed without a code of rules and obligations, and America is actually really amazingly effective.

Government measures quality by weighing the paperwork. That registration must have added immeasurably to the quality of the offering.

It's mostly due to common law, which has some imperfections like progressively growing legal bases instead of pre-definitions.

With scams like trump university out there are we really complaining about some paperwork? If a school isn't capable of handling that paperwork, perhaps they shouldn't be school.

I live in a place where the city council has all sorts of leeway on how to apply restaurant regulations when a new business wants to open. And just as you might expect, those who don't have city connections get a lot stricter enforcement of those regulations. Maybe if the US was more Nordic in its government corruption, I'd be more pro-regulation, but I see them abused all the time to keep the insiders rich and the outsiders poor, and the public unprotected.

Is there any upper limit to the amount of paperwork you feel is appropriate to protect from 'trump university' copycats?