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jerryking : regulation   56

Why further financial crises are inevitable
March 19, 2019 | Financial Times | Martin Wolf.

We learnt this month that the US Fed had decided not to raise the countercyclical capital buffer required of banks above its current level of zero, even though the US economy is at a cyclical peak. It also removed “qualitative” grades from its stress tests for American banks, though not for foreign ones. Finally, the Financial Stability Oversight Council, led by Steven Mnuchin, US Treasury secretary, removed the last insurer from its list of “too big to fail” institutions.

These decisions may not endanger the stability of the financial system. But they show that financial regulation is procyclical: it is loosened when it should be tightened and tightened when it should be loosened. We do, in fact, learn from history — and then we forget.....Regulation of banks has tightened since the financial crises of 2007-12. Capital and liquidity requirements are stricter, the “stress test” regime is quite demanding, and efforts have been made to end “too big to fail” by developing the idea of orderly “resolution” of large and complex financial institutions.....Yet complacency is unjustified. Banks remain highly leveraged institutions.....history demonstrates the procyclicality of regulation. Again and again, regulation is relaxed during a boom: indeed, the deregulation often fuels that boom. Then, when the damage has been done and disillusionment sets in, it is tightened again........We can see four reasons why this tends to happen: economic, ideological, political and merely human.

* Economic
Over time the financial system evolves. There is a tendency for risk to migrate out of the best regulated parts of the system to less well regulated parts. Even if regulators have the power and will to keep up, the financial innovation that so often accompanies this makes it hard to do so. The global financial system is complex and adaptable. It is also run by highly motivated people. It is hard for regulators to catch up with the evolution of what we now call “shadow banking”.

* Ideological
the tendency to view this complex system through a simplistic lens. The more powerful the ideology of free markets, the more the authority and power of regulators will tend to erode. Naturally, public confidence in this ideology tends to be strong in booms and weak in busts.

* Political

the financial system controls vast resources and can exert huge influence. In the 2018 US electoral cycle, finance, insurance and real estate (three intertwined sectors) were the largest contributors, covering one-seventh of the total cost. This is a superb example of Mancur Olson’s Logic of Collective Action: concentrated interests override the general one. This is much less true in times of crisis, when the public is enraged and wants to punish bankers. But it is true, again, in normal times.

Borderline or even blatant corruption also emerges: politicians may even demand a share in the wealth created in booms. Since politicians ultimately control regulators, the consequences for the latter, even if they are honest and diligent, are evident.

A significant aspect of the politics is closely linked to regulatory arbitrage: international competition. One jurisdiction tries to attract financial business via “light-touch” regulation; others then follow. This is frequently because their own financiers and financial centres complain bitterly. It is hard to resist the argument that foreigners are cheating.

* Human
There is a human tendency to dismiss long-ago events as irrelevant, to believe This Time is Different and ignore what is not under one’s nose. Much of this can be summarised as “disaster myopia”. The public gives irresponsible policymakers the benefit of the doubt and enjoys the boom. Over time, regulation degrades, as the forces against it strengthen and those in its favour corrode.

The cumulative effect of these efforts is quite clear: regulations erode and that erosion will be exported. This has happened before and will do so again. This time, too, is not different.
boom-to-bust  bubbles  collective_action  complacency  corruption  disaster_myopia  entrenched_interests  economic_downturn  financiers  financial_crises  financial_innovation  financial_regulation  financial_system  historical_amnesia  Mancur_Olson  Martin_Wolf  policymakers  politicians  politics  procyclicality  regulatory_arbitrage  regulation  regulators  stress-tests  This_Time_is_Different  U.S._Federal_Reserve 
march 2019 by jerryking
Regulatory showdown awaits for Big Tech — but who gets the job?
March 1, 2019 | Financial Times | Richard Waters.

Wanted: an antitrust enforcer to lead the charge against Big Tech. Must be able to invent novel applications of competition theory to digital markets.

There is a growing list of candidates for this job — but it isn’t at all clear who is best placed to jump into the hot seat.

The US Federal Trade Commission has just volunteered itself, setting up a task force to examine the dominant tech companies. Among the agency’s promises: it will consider new theories of harm that until now haven’t made it out of academia, and it won’t hesitate to push for the court-ordered unwinding of past mergers if it turns out they’re hurting competition.

One problem for competition regulators in the US is that they have taken too narrow a view of their roles, according to Tim Wu, a professor at Columbia Law School. They are concerned almost exclusively with protecting consumers from higher prices — something that doesn’t apply to “free” (advertising-supported) internet services. In his latest book, The Curse of Bigness, Wu calls for a return to a much broader interpretation of the US antitrust statutes, treating market concentration itself as an evil needing be to rectified.
antitrust  Big_Tech  books  FTC  regulation  regulators  Richard_Waters  Tim_Wu 
march 2019 by jerryking
Big Tech in hiring spree for looming antitrust battles | Financial Times
Kiran Stacey in Washington DECEMBER 23, 2018 Print this page6
Big technology and telecoms companies have embarked on a hiring spree of former antitrust officials as their industries gear up for what experts warn could be an “existential” battle over whether they should be broken up.

In the last few months, Facebook, Amazon and AT&T have all hired senior antitrust officials from the US Department of Justice as they confront a new generation of regulators who are interested in preventing concentrations of economic power......Many of the biggest US technology companies have endured a difficult year, facing allegations of not protecting customer data, failing to prevent Russian interference in American democracy and showing political bias.

In response, several have beefed up their lobbying operations in Washington as they look to engage more with politicians, having previously preferred to operate under the radar. .....Experts say the hirings reflect a growing belief that competition policy could become the next significant political battleground....The European Commission has investigated US technology companies for alleged anti-competitive behaviour. Margrethe Vestager, the European Commissioner for Competition, is bringing cases against Google and is looking into Amazon.

Such cases have been more difficult to pursue in the US, where the law is focused more on whether anti-competitive behaviour is keeping prices artificially high.

A group of younger progressive regulators and politicians have argued in recent years, however, that technology companies that give their services away for free but dominate their markets should come in for as much attention.....Rohit Chopra, a Federal Trade Commissioner in his mid-30s, for example, recently hired Lina Khan, a 29-year-old policy thinker who has argued that large technology companies can both bring prices down and be harmful to society in general.
Amazon  antitrust  AT&T  Big_Tech  competition_policy  corporate_concentration  Department_of_Justice  FAANG  Facebook  FTC  hiring  Lina_Khan  lawyers  lobbying  market_power  market_concentration  monopolies  platforms  regulation  regulators  revolving_door  under_the_radar 
december 2018 by jerryking
How Should Antitrust Regulators Check Silicon Valley’s Ambitions? - The New York Times
By Hernan Cristerna
July 3, 2018

The question is: At what point should regulators step in to check the ambitions of the tech giants--Facebook, Amazon, Apple, Netflix and Google? Those five companies hold considerable influence over the internet......the United States needs an approach to merger regulation that protects consumers by supporting transactions that create enterprises capable of standing head-to-head with the tech giants.

The decision to allow AT&T to acquire Time Warner is a step in this direction. So was the decision to approve Disney’s purchase of much of 21st Century Fox.

In a rapidly transforming marketplace, regulators should enable incumbents to stand up to the largest tech companies that are using new technologies — such as cloud computing, big data and artificial intelligence — to upend existing industries.....
“Old economy” companies must be allowed to combine in order to increase their scale and innovation capabilities so that they are on a level playing field with the tech giants.....Regulators must now take notice of the verdict in the AT&T case so that they can calibrate their approach in the next round of transactions.
21st_Century_Fox  antitrust  regulation  regulators  platforms  Department_of_Justice  AT&T  Time_Warner  FAANG 
july 2018 by jerryking
Marty Chavez Muses on Rocky Times and the Road Ahead
NOV. 14, 2017 | - The New York Times | By WILLIAM D. COHAN.

Mr. Chavez is about as far from the stereotypical Wall Street senior executive as you can imagine, and that is one reason his musings about the future direction of Wall Street are listened to carefully.

He grew up in Albuquerque, one of five children, who all went to Harvard. He got a doctorate in medical information sciences from Stanford University. (At that time, he was known by his full name Ramon Martin Chavez.)

In 1990, Mr. Chavez came out, the day after he defended his doctoral dissertation. – “Architectures and Approximation Algorithms for Probabilistic Expert Systems.” He is one of the few openly gay executives on Wall Street. ......In his current role as Goldman's CFO, Marty views his job as a simple one that is hard to get right: “I’m not paid or evaluated on the accuracy of my crystal-ball predictions,” he said. “I’m paid to enumerate every possible outcome and do something about every possible outcome well in advance, when it’s still possible to do something, because once it’s happened it’s too late.”....Unlike many of his peers on Wall Street, Mr. Chavez does not complain about the extent of the regulation that hit the financial industry as a result of Dodd-Frank. Generally speaking, he says, the regulations have helped banks “confront their problems and capitalize and bolster their liquidity,” making them “stronger as a result,” and the financial system safer and more profitable.....Instead of complaining about the extra expense and manpower required to comply with the mountain of new regulations, Mr. Chavez chooses instead to think about it differently. “If you approach the regulations as ‘Oh, we’ve got to comply,’ you’ll get one result,” he said. He prefers thinking about the regulations as, “This makes us and the system and our clients safer and sounder, and yes it’s a lot of work, but what can we learn from this work and how can we use this work in other ways to make a better result for our shareholders and our clients? Everywhere we look we’re finding these opportunities and they’re very much in keeping with the spirit of the times.”

Like any good senior Goldman executive, he does worry. (Lloyd Blankfein, the Goldman chief executive, once told me he spent 98 percent of his time worrying about things with a 2 percent probability.)

His biggest concern at the moment is the risk of “single points of failure” in the vast world of cybersecurity (JCK: SPOF). He worries about any individual “repository of information” that does not have a backup and that can “be hacked.”

He does not even trust Goldman’s own computer system; he treats it as a potential enemy.

.....What also makes Goldman different from its peers is the firm’s love affair with engineers. At the moment, he said, engineers comprise around 30 percent of Goldman’s work force of about 35,000. It’s what drew him to Goldman in the first place — to work on Goldman’s in-house software, “SecDB,” short for “Securities Database,” an internal, proprietary computer system that tracks all the trades that Goldman makes and their prices, and regularly monitors the risk that the firm faces as a result.

He said the system generates some million and a half points of data that were used to calculate, for the first time, the firm’s “liquidity coverage ratio” — now 128 percent — and that were shared with regulators every day. He’s been busy trying to figure out how the newly generated data can be used to help him understand what the firm’s liquidity will be a year from now.

That way, he said, in his principal role as Goldman’s chief financial officer, he can perceive a problem in plenty of time to do something about it. “We’re able to get much better actionable insights that make the firm a less risky business because we’re able to go much further out into the future,” he said......
actionable_information  CFOs  cyber_security  databases  Dodd-Frank  engineering  financial_system  Goldman_Sachs  improbables  information_sources  jujutsu  low_probability  Martin_Chavez  proprietary  regulation  SecDB  SPOF  think_differently  Wall_Street  William_Cohan  worrying 
november 2017 by jerryking
Keeping America's Edge
Winter 2010 | National Affairs | Jim Manzi.

.....One of the most painful things about markets is that they often make fools of our fathers: Sharp operators with an eye for trends often outperform those who carefully learn a trade and continue a tradition. ...First, To begin with, we must unwind some recent errors that fail to take account of these circumstances. Most obviously, government ownership of industrial assets is almost a guarantee that the painful decisions required for international competitiveness will not be made. When it comes to the auto industry, for instance, we need to take the loss and move on. As soon as possible, the government should announce a structured program to sell off the equity it holds in GM. ....Second, the financial crisis has demonstrated obvious systemic problems of poor regulation and under-regulation of some aspects of the financial sector that must be addressed — though for at least a decade prior to the crisis, over-regulation, lawsuits, and aggressive government prosecution seriously damaged the competitiveness of other parts of America's financial system ........Regulation to avoid systemic risk must therefore proceed from a clear understanding of its causes. In the recent crisis, the reason the government has been forced to prop up financial institutions isn't that they are too big to fail, but rather that they are too interconnected to fail......we should therefore adopt a modernized version of a New Deal-era ­innovation: focus on creating walls that contain busts, rather than on applying brakes that hold back the entire system.....Third, over the coming decades, we should seek to deregulate public schools. .....We should pursue the creation of a real marketplace among ever more deregulated publicly financed schools — a market in which funding follows students, and far broader discretion is permitted to those who actually teach and manage in our schools. There are real-world examples of such systems that work well today — both Sweden and the Netherlands, for instance, have implemented this kind of plan at the national level......Fourth, we should reconceptualize immigration as recruiting. Assimilating immigrants is a demonstrated core capability of America's political economy — and it is one we should take advantage of. ....think of immigration as an opportunity to improve our stock of human capital. Once we have re-established control of our southern border, and as we preserve our commitment to political asylum, we should also set up recruiting offices looking for the best possible talent everywhere: from Mexico City to Beijing to Helsinki to Calcutta. Australia and Canada have demonstrated the practicality of skills-based immigration policies for many years. We should improve upon their example by using testing and other methods to apply a basic tenet of all human capital-intensive organizations managing for the long term: Always pick talent over skill. It would be great for America as a whole to have, say, 500,000 smart, motivated people move here each year with the intention of becoming citizens.
social_cohesion  innovation  human_capital  Jim_Manzi  immigration  immigration_policies  recruiting  interconnections  too_big_to_fail  economic_downturn  outperformance  capitalization  human_potential  financial_system  regulation  under-regulation  too_interconnected_to_fail  systemic_risks  talent  skills  innovation_policies 
august 2017 by jerryking
Can the Tech Giants Be Stopped? -
July 14, 2017 | WSJ | By Jonathan Taplin.

Google, Facebook, Amazon and other tech behemoths are transforming the U.S. economy and labor market, with scant public debate or scrutiny. Changing course won’t be easy....."we are rushing ahead into the AI universe with almost no political or policy debate about its implications. Digital technology has become critical to the personal and economic well-being of everyone on the planet, but decisions about how it is designed, operated and developed have never been voted on by anyone. Those decisions are largely made by executives and engineers at Google, Facebook, Amazon and other leading tech companies, and imposed on the rest of us with very little regulatory scrutiny. It is time for that to change.

Who will win the AI race? The companies that are already in the forefront: Google, Facebook and Amazon. As AI venture capitalist Kai-Fu Lee recently wrote in the New York Times , “A.I. is an industry in which strength begets strength: The more data you have, the better your product; the better your product, the more data you can collect; the more data you can collect, the more talent you can attract; the more talent you can attract, the better your product.”".....How did we get here? I would date the rise of the digital monopolies to August 2004, when Google raised $1.9 billion in its initial public offering......This shift has brought about a massive reallocation of revenue, with economic value moving from the creators of content to the owners of monopoly platforms. Since 2000, revenues for recorded music in the U.S. have fallen from almost $20 billion a year to less than $8 billion, according to the Recording Industry Association of America. U.S. newspaper ad revenue fell from $65.8 billion in 2000 to $23.6 billion in 2013 (the last year for which data are available). Though book publishing revenues have remained flat, this is mostly because increased children’s book sales have made up for the declining return on adult titles.....The precipitous decline in revenue for content creators has nothing to do with changing consumer preferences for their content. People are not reading less news, listening to less music, reading fewer books or watching fewer movies and TV shows. The massive growth in revenue for the digital monopolies has resulted in the massive loss of revenue for the creators of content. The two are inextricably linked......In the third quarter of 2016, companies owned by Facebook or Google took 90% of all new digital ad revenue. ....The history of Silicon Valley itself offers some guidance here. The astonishing technological revolution of the past half-century would never have occurred without the impetus of three seminal antitrust prosecutions. ....The clear historical lesson, which is waiting to be rediscovered in our own day, is that antitrust action has often served not to constrain innovation but to promote it.
Apple  Alphabet  Big_Tech  Google  Amazon  Microsoft  Facebook  artificial_intelligence  privacy  antitrust  Silicon_Valley  content  platforms  virtuous_cycles  content_creators  public_discourse  oligopolies  oversight  value_migration  regulation  innovation  seminal  no_oversight  imperceptible_threats  FAANG  backlash  Kai-Fu_Lee 
july 2017 by jerryking
Regulator Will Start Issuing Bank Charters for Fintech Firms - WSJ
By RACHEL WITKOWSKI, TELIS DEMOS and PETER RUDEGEAIR
Updated Dec. 2, 2016
regulation  regulators  fin-tech 
march 2017 by jerryking
With Competition in Tatters, the Rip of Inequality Widens - The New York Times
Eduardo Porter
ECONOMIC SCENE JULY 12, 2016

The new merger amounts to another step in the long decline of competition in many American industries.

It is a decline that stunts entrepreneurship, hinders workers’ mobility and slows productivity growth. Slowing this trend has emerged as a tempting new avenue to address the plight of a beleaguered working class. Reviving flagging American competition might even help stop America’s ever-widening inequality.

In April, President Obama issued an executive order calling on government agencies to look for ways to bolster competition in the industries they monitor.....There is plenty of evidence that corporate concentration is on the rise. Mr. Furman and Mr. Orszag report that between 1997 and 2007 the market share of the 50 largest companies increased in three-fourths of the broad industry sectors followed by the census......Studies have found increased concentration in agricultural businesses and wireless communications as well.....but is competition policy about increasing the economy’s efficiency, or is it about changing the distribution of the spoils....should antitrust be a major tool for addressing inequality?....How did the American economy get so concentrated? Technology surely helped. Tech giants like Google and Facebook benefit from economies of scale and network effects. ....Government watchdogs also messed up....How to fix corporate concentration? In industries perceived to be fairly concentrated, presume future mergers will be anticompetitive, take the burden of proof off the regulator’s shoulders and putting the onus on the merging companies to prove it is not....Regulations can also be tool: How about demanding that the FDA approve generic drugs more quickly?
anticompetitive_behaviour  antitrust  burden_of_proof  collusion  competition  competition_policy  corporate_concentration  economies_of_scale  market_power  income_inequality  monopolies  network_effects  platforms  regulation  regulators 
july 2016 by jerryking
Avoid Regulatory Capture, but Get Informed Regulators — Letters to the Editor - WSJ
Jan. 12, 2015

Regulators without financial experience may disrupt alleged coziness between bankers and regulators, but ignorance is not a recipe for effective oversight of one of the largest U.S. economic sectors......But many of us today are more fearful of regulators—at the IRS and EPA, for example—and expensive, ineffective overreach by Washington than we are about abuse by bankers.
financial_services  regulation  Elizabeth_Warren  oversight 
january 2015 by jerryking
Instead of blocking progress, Toronto should encourage Uber - The Globe and Mail
MARCUS GEE
The Globe and Mail
Published Wednesday, Nov. 19 2014

Rather than stand in the way, cities should find ways to let these services thrive while protecting consumers and being fair to established providers like cab companies. In California, birthplace of Uber, regulators have brought in rules that permit the car-summoning companies to operate as long as they take steps such as meeting insurance requirements and having background checks for drivers. Officials are still jousting with the companies over how it will work, but it is a start.

It will be a tricky business, no doubt. To suffocate the new services in regulation would be a mistake. Strict standards on car maintenance, equipment and driver training don’t make sense for an informal exchange such as this. Competition and the lash of consumer reviews should help keep the new companies from using clunkers or sketchy drivers.

Authorities shouldn’t over-regulate pricing, either. The practice of “surge pricing” – hiking the cost of rides at busy times – is a legitimate and promising way to get the supply of cars and drivers to meet the demand from passengers.
Uber  Marcus_Gee  Toronto  John_Tory  regulation  taxis  sharing_economy  surge_pricing  price_hikes 
november 2014 by jerryking
When Media Mergers Limit More Than Competition - NYTimes.com
James B. Stewart, a columnist for The New York Times, explores the antitrust concerns related to a potential deal between Time Warner Inc. and 21st Century Fox. Publish Date July 25, 2014.
antitrust  consolidation  mergers_&_acquisitions  M&A  deal-making  regulation  21st_Century_Fox  competitive_landscape 
july 2014 by jerryking
Titans of finance have moved on from the banks
14 Feb. 2014| Financial Times | Gillian Tett.

If the mighty J Pierpont Morgan were reincarnated in New York today, who might he be? Jamie Dimon, the man who is now chief executive of JPMorgan, the ...
Jamie_Dimon  private_equity  Blackstone  regulation  KKR  alternative_investments  moguls  Gillian_Tett 
may 2014 by jerryking
From Google Wallet to bitcoin, banks’ grip on savers is loosening - The Globe and Mail
CARL MORTISHED
From Google Wallet to bitcoin, banks’ grip on savers is loosening Add to ...
Subscribers Only

If HSBC is contemplating becoming less local in its U.K. home market, it may be because their “local” knowledge tells them that in parts of Africa, ordinary people are doing cashless payment transactions by cellphone without the need of complex apps, not to mention debit cards or cheques....The real risk for the banks, however, is disintermediation, where the social media and Internet platforms simply channel moneydata from customers to retailers or from lenders to borrowers without bank intervention. Crowd funding and peer-to-peer lending platforms are still in their infancy, but that is probably because they lack the connection to the vast pot of money that would be available from a Google-bank or Face-bank.

Finally, there is the money issue, made relevant by the bizarre phenomenon of bitcoin, the ultimate disintermediation tool. If the unit of value as well as the medium of exchange moved out of the world of banking and into the ether, the transition to a debanked world would be complete.

LONDON — The Globe and Mail

Published Thursday, Dec. 12 2013
banks  banking  Google  Facebook  P2P  peer-to-peer  HSBC  disintermediation  bitcoin  regulation  mobile_payments 
december 2013 by jerryking
Toronto’s problem has grown beyond its mayor
Nov. 08 2013 | The Globe and Mail |Richard Florida

Toronto must deal with an even larger schism, the one that divides its booming 21st-century economy from its outmoded growth model and system of governance. It is this – not Mr. Ford – that poses the most serious threat to Toronto’s continued prosperity....Toronto has reached a true inflection point, and the problem is not high taxes or fiscal profligacy, as many have framed it....Toronto’s biggest problem is its growth model, which has far outlived its shelf life.

When a city region like Toronto – or Atlanta, Washington, Dallas or Miami – hits the 5.5 to six million mark in population, it can no longer grow based on cars and sprawl. It has to grow upward as well as outward and has to become much more oriented to transit. Most cities fail to make the required investments and their growth stalls and falters. The truly great cities are able to invest in ways that change their growth trajectory. This is what New York did more than a century ago when it built its rail and subway lines. That’s what Toronto needs to do now if it wants to achieve its ambition to become a truly global city....To do so requires not just massive investments in transit, but more flexible building and zoning regimes that promote greater density at the core and in the suburbs alike. The dysfunction in the mayor’s office means that all this is being put on the back burner....then there is the deep and fundamental problem of the growing geographic inequality that produced Mr. Ford in the first place. ....Inequality has frustrated even the most effective mayors...[Toronto} needs a new governance system that is adequate to the new challenges it faces....Toronto can lead the world by devising a modern system that’s up to the task of investing in governing and investing in a large economically integrated city. ...the basic idea would be to create a new kind of federalism, which extends from the provincial government through the city and all the way down to the varied communities and neighbourhoods that make it up.
21st._century  building_codes  cities  communities  densification  federalism  land_uses  mayoral  neighbourhoods  NYC  Queen’s_Park  regulation  Richard_Florida  Rob_Ford  scandals  schisms  transit  Toronto  zoning  inflection_points 
november 2013 by jerryking
Ronald H. Coase, a Law Professor and Leading Economist, Dies at 102 - NYTimes.com
By PATRICK J. LYONS
Published: September 3, 2013

At the University of London, he was on his way to becoming an industrial lawyer when a seminar with Sir Arnold Plant, a well-known economist of the time, changed his focus again, this time for good. After graduating from the London School of Economics, he taught there and at other British universities, and married Marion Ruth Hartung in 1937. The couple immigrated to the United States in 1951, when he joined the faculty of the State University of New York at Buffalo. He left for the University of Virginia in 1958.

While teaching at Virginia, Professor Coase submitted his essay about the F.C.C. to The Journal of Law and Economics, a new periodical at the University of Chicago. The astonished faculty there wondered, according to one of their number, George J. Stigler, “how so fine an economist could make such an obvious mistake.” They invited Professor Coase to dine at the home of Aaron Director, the founder of the journal, and explain his views to a group that included Milton Friedman and several other Nobel laureates-to-be.

“In the course of two hours of argument, the vote went from 20 against and one for Coase, to 21 for Coase,” Professor Stigler later wrote. “What an exhilarating event! I lamented afterward that we had not had the clairvoyance to tape it.” Professor Coase was asked to expand on the ideas in that essay for the journal. The result was “The Problem of Social Cost.”

Professor Coase was soon invited to become editor of the journal, and to join the Chicago faculty, where he stayed the rest of his life, disdaining the equation-heavy approach of what he called “blackboard economics” in favor of insights grounded in real markets and human behavior.

By identifying transaction costs and explaining their effects, the Royal Swedish Academy of Sciences wrote in announcing his prize in 1991, “Coase may be said to have identified a new set of ‘elementary particles’ in the economic system.”
obituaries  economists  lawyers  NPSIA  regulation  property_rights  human_behavior  transaction_costs  FCC  broadcasting  Ronald_Coase  Nobel_Prizes  Coase's_Law  behaviours  frictions  social_costs 
september 2013 by jerryking
Hedge Funds Today.pdf - Google Docs
September 29, 2005| WSJ pg. A18 | Sanford J. Grossman.
hedge_funds  mutual_funds  talent  regulation 
june 2012 by jerryking
Can Food Industry Police Itself? - WSJ.com
October 15, 2007 | WSJ | By JANE ZHANG
Can Food Industry Police Itself?
New Safety System Likely to Focus On Prevention, but Trust Is an Issue
food_safety  product_recalls  FDA  Kraft  regulation 
june 2012 by jerryking
Crovitz: Google Speaks Truth to Power - WSJ.com
OCTOBER 24, 2011

Google Speaks Truth to Power
About the growing regulatory state, even Google's Eric Schmidt—a big supporter of the Obama administration—now feels the need to tell it like it is.

By L. GORDON CROVITZ
Like this columnist
L._Gordon_Crovtiz  Google  Washington_D.C.  regulation  Eric_Schmidt  truth-telling  speak_truth_to_power 
october 2011 by jerryking
Charles Schwab: Every Job Requires an Entrepreneur - WSJ.com
SEPTEMBER 28, 2011 | WSJ | By CHARLES R. SCHWAB. Every Job Requires an Entrepreneur
Someone took risks to start every business—whether Ford, Google or your local dry cleaner.

What's the potential power of the entrepreneur's simple leap of faith? The success of a single business has a significant payoff for the economy. Looking back over the 25 years since our company went public, Schwab has collectively generated $68 billion in revenue and $11 billion in earnings. We've paid $28 billion in compensation and benefits, created more than 50,000 jobs, and paid more than $6 billion in aggregate taxes. In addition to the current value of our company, we've returned billions of dollars in the form of dividends and stock buybacks to shareholders, including unions, pension funds and mom-and-pop investors.

The wealth created for our shareholders—a great many of them average Schwab employees—has been used to reinvest in existing and new businesses and has funded a myriad of philanthropic activities. We've also spent billions buying services and products from other companies in a diverse set of industries, from technology to communications to real estate to professional services, thereby helping our suppliers create businesses and jobs.
entrepreneurship  risk-taking  editorials  entrepreneur  government  policy  regulation  job_creation  Charles_Schwab  large_payoffs  mom-and-pop  leaps_of_faith  wealth_creation 
september 2011 by jerryking
With a Long List but Short on Money, F.D.A. Tackles Food Safety - NYTimes.com
By WILLIAM NEUMAN
August 22, 2011

A landmark food safety law passed by Congress last December is supposed
to reduce the frequency and severity of food safety problems, but the
roll call of recent cases underlines the magnitude of the task....The
agency is taking on the expanded mission at a time when Washington
budget-slashing means that regulators have little hope of getting
additional money and may instead have their budgets cut by Congress....A
budget freeze or cuts would have the greatest impact on the ambitious
increase in inspections called for under the new law, which ramp up each
year.

“Writing rules is inexpensive (jk: i.e. policymaking is easy); enforcing them is expensive (jk i.e. implementation is hard), said David W. Acheson, a former associate commissioner of the F.D.A. who is now a
food safety consultant. “There will be a public health impact because
enforcement won’t be to the extent they want to do it.”
product_recalls  implementation  food_safety  hard_work  FDA  cost-cutting  policymaking  public_health  enforcement  regulation  pairs  frequency_and_severity  regulators  cutbacks  quotes  rule-writing  budget_cuts 
august 2011 by jerryking
Crovitz: Antitrust Laws Don’t Make Sense with 21st Century Technology - WSJ.com
AUGUST 3, 2009 | Wall Street Journal | By L. GORDON
CROVITZ. The Antitrust Anachronism: When will technology’s ever faster
cycles of creative destruction spell the end of antitrust law? The
Sherman Act and later antitrust laws were supposed to protect consumer
interests. That’s not so easy when regulators have to deal with
industries as different as oil, with its cartels and long product
cycles, and technology, where fast change is a constant necessity for
survival....the traditional approach to antitrust makes no sense in an
industry like technology, in which new entrants routinely topple
seemingly invincible market leaders....Scale matters...The size of the
audience is important...The bottom line is that by the time regulators
can assess a technology market, the market has often moved on.

*
antitrust  competition  21st._century  product_cycles  creative_destruction  regulation  L._Gordon_Crovtiz  constant_change  scaling  new_entrants  accelerated_lifecycles  regulators  market_leadership  cartels  consumer_protection  consumer_interests  market_sizing 
august 2010 by jerryking
The Regulation Crisis: A failure of economic and environmental regulation
June 14, 2010 | The New Yorker | by James Surowiecki.
As Carpenter argues in a recent essay, successful regulation, by filling
information gaps and managing risk, fosters confidence in the safety
and honesty of markets, which in turn makes them bigger and more robust.
The pharmaceutical industry, for instance, would be much smaller if
people were seriously worried that they might be poisoned every time
they took a new drug. And though executives chafe at financial
regulation, the protection it provides makes investors far more likely
to hand them money to play with. If we want our regulators to do better,
we have to embrace a simple idea: regulation isn’t an obstacle to
thriving free markets; it’s a vital part of them.
BP  confidence  consumer_protection  economics  environment  financial_regulation  free_markets  information_gaps  investors  James_Surowiecki  oil_spills  pharmaceutical_industry  politics  regulation  regulators  SEC 
june 2010 by jerryking
Gulf Oil Spill's Fallout Widens Debate on Government's Proper Role - WSJ.com
MAY 28, 2010 | Wall Street Journal | By GERALD F. SEIB. New
Rules in an Old Tug-of-War. A presidential commission soon will put
the relationship (govt.-offshore oil industry) in therapy. The risk is
that the wrong question may dominate the coming discussion—namely,
whether there was too little regulation of the offshore oil industry.
The better question is less about quantity than quality: Were
regulations smart and up to date? They almost certainly weren't. ...The
broader point is that the BP oil spill is just the latest in a series of
traumatic events forcing a rethink of government's relationship with
business. Bank bailouts, energy plans, auto-maker rescues, Toyota
accelerator problems: All have forced both politicians and average
Americans to rethink the proper role of government in the private
economy.
bailouts  Gerald_Seib  government  private_sector  BP  oil_spills  regulation  event-driven  events  regulators  business-government_relations  politicians  offshore  offshore_drilling  questions 
may 2010 by jerryking
Op-Ed Columnist - In Athens, a Question From Lydia - NYTimes.com
May 14, 2010 | New York Times | By THOMAS L. FRIEDMAN.
Friedman argues that there's a tension between “situational values”
--doing whatever the situation allows--and "sustainable values”, values
that inspire in us behaviors that literally sustain our relationships
with one another, with our communities, with our institutions, and with
our forests, oceans and climate. Regulations, while important and
necessary, are insufficient in an increasingly connected world (i.e.
environment, markets, and societies). Trust and values come to the fore and the fear
is that our value system is being harmonized to the short-term thinking
associated with our markets.
values  value_systems  Tom_Friedman  social_fabric  social_trust  covenants  trustworthiness  regulation  Communicating_&_Connecting  interconnections  community  short-term_thinking 
may 2010 by jerryking
FT.com / UK - Fear factor has UK plc seeking legal remedies
By Rachel Sanderson

Published: May 7 2010
Vodafone last month launched an application called Vodafone Mobile
Recording, which enables regulated companies to record and archive
mobile conversations, voicemails and text messages to protect against
any losses from disputes.

The move comes amid expectations that the FSA will soon extend its
"taping rules" on recording communications transactions to mobile
phones.
mobile_phones  regulation  risk-management  compliance  FSA 
may 2010 by jerryking
Book Review: "The Laws of Disruption" - WSJ.com
OCTOBER 12, 2009 | Wall Street Journal | by JEREMY PHILIPS who
reviews The Laws of Disruption, By Larry Downes
Basic, 298 pages, $26.95. The central thesis of "The Laws of
Disruption" is that "technology changes exponentially, but social,
economic and legal systems change incrementally." When it comes to the
digital revolution, Mr. Downes says, our laws have not kept pace with
the changes that it has brought about. Downes counsels that authorities
(regulators and judges) use a light touch--as opposed to introducing
ever new laws and regulations --because the rapid pace of change makes
it impossible to predict the course of technology.
book_reviews  books  competitive_landscape  digitalization  disruption  incrementalism  innovation  intellectual_property  Internet  legal_system  rapid_change  regulation  regulators  structural_change  technological_change 
october 2009 by jerryking
Opinion: Silicon Valley a Systemic Risk? - WSJ.com
APRIL 8, 2009, 10:48 P.M. ET| Wall Street Journal | by JAMES FREEMAN
venture_capital  regulation  VC  Obama  silicon_valley 
april 2009 by jerryking
Preparing for the Next Crisis: Preventing the Next Fire While This One Blazes
MARCH 12, 2009 WSJ column by by DAVID WESSEL. Identifies some
fundamental questions that should be addressed as officials think
through improvements to the financial regulatory framework.

Preventing all future crises is not the goal. That would be the equivalent of banning stoves and furnaces: We'd have fewer destructive fires but we'd be cold and miserable. The goal is to prevent mishaps from burning down the world economy. Here are three of the threshold questions that need pondering:

(1) Who shall be saved, and who shall be allowed to die?

(2) How paternalistic should regulation be, and who should be the parent?

(3) Can we install air bags in the financial system that deploy automatically?
circuit_breakers  crisis  David_Wessel  financial_crises  financial_institutions  financial_system  frameworks  hard_questions  hard_choices  preparation  questions  regulation  regulators  think_threes  triage 
march 2009 by jerryking
Regulations: Alternative Approaches - WSJ.com
February 12, 2007 | WSJ | LEILA ABBOUD. Govts. struggle to find
policies that will spur renewable energy industries--without coddling
them
regulation  alternative_energy  industrial_policies  renewable  green  policymaking 
february 2009 by jerryking
When Recall Isn't Total - WSJ.com
July 15, 2008 WSJ article by Melanie Trottman that speaks to:
the lack of regulatory standards; the inability to enforce safety rules
due to voluntary safety standards and jurisdictional limits.
product_recalls  recalls  regulation  CPSC 
january 2009 by jerryking
The return of regulation, and what a difference a decade makes
September 19, 2008 op-ed piece in the G&M by Eric Helleiner
on the changes to the financial world and the increased prominence of
the state.
economics  crisis  regulation  public_policy  state_capitalism 
january 2009 by jerryking

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