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Comment by tvanantwerp | Hacker News Reader

The trick here is defining "smart" versus "needless" regulations. It's not always an obvious difference. For example: lots of excessive state-level occupational licensing which effectively just creates cartels was passed with sensible arguments about protecting consumers from harm and poor quality. It's fairly easy to rationalize lots of regulations that don't work very well in practice. So just saying "it should be smart and not mindless" isn't really a solution to anything without a rigorous definition of what a "smart" regulation looks like.

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Right on. The legislators who consult with lobbyists behind closed doors and then produce thousand page bills would argue that they also make "smart" regulation. Didn't they talk at length to the people who knew most about the issue? Doesn't the bill address lots of cases that would never occur to the "dumb" person?

Yes, but the bill is totally ineffective for the average person and only helps the big players.

What we arguably need is more "stupid" (as in "keep it simple, stupid") regulation. Constitutional Amendments are written in this style; also some antitrust legislation [1]. Complex regulations are vulnerable to

a) hidden flaws - that tiny exception in article 57 paragraph 30 might turn out large enough to overturn all 56 previous articles.

b) regulatory capture - lobbyists will, of course, introduce as many exceptions as possible if the text is long enough.

c) the revolving door - if only a small group of people know the intricate details, they will soon be hired by the affected companies at a multiple of their previous salary.

d) compliance cost - only large companies might be able to afford the compliance cost, which ends up concentrating the market further at the cost of the consumer (Dodd-Frank, anyone?).

[1] https://en.wikipedia.org/wiki/Sherman_Antitrust_Act#Original...

I agree in principle. I would also argue that there should be a bias toward informational and clarity-enforcing regulation as opposed to specific action regulations. I.e. regulations that say, "you must disclose this clearly and transparently" as opposed to, "your widget must be minimum 12mm wide".

That said, regulations that are less specific in the text of the law often yield cumbersome lawsuits and may end up with a huge volume of case law. Just because the law is 2 pages long doesn't mean you don't need an army of lawyers to comply with it. They'll just be parsing 2,000 page case law briefs and judicial rulings.

Of course even specific laws generate lots of case volume, but still, short laws aren't a panacea. Smarter laws that seek to even out knowledge in the marketplace might be a better way to go as the economy gets more complex.

> regulations that are less specific in the text of the law often yield cumbersome lawsuits and may end up with a huge volume of case law

Yes, but at least you have the chance beforehand that someone will say "this is not specific enough and will yield cumbersome lawsuits". If it's super long and complex then either a) there will be cumbersome lawsuits over parts of the law that are not completely consistent or b) the big guy with the big legal team will always win by default.

>Yes, but the bill is totally ineffective for the average person and only helps the big players.

Any regulation that's over a sentence is too much for the lay person to bother reading or being aware of.

In the case of the airlines I've seen this a lot were consumers have a lot of opinions how things ought to be. They're oblivious to the consequences of their demands. They don't have a clue what the current regulations are, so can't really have an opinion whether they're good or not. They just assume any time they're mad, regulations must be bad.

>Any regulation that's over a sentence is too much for the lay person to bother reading or being aware of.

You don't have to be a direct regulatee to be affected by a regulation. But... as someone that does read a lot of regulations, I generally agree that simpler is better.

Or... in the case where we have complex regulations that all the large regulatees are implementing in expert systems anyways. Maybe we should just write executable regulations, we can still have a long list of ambiguous parameters for the lawyers to argue over.

Regulations should come with a bunch of unit tests to ensure that at least the core cases work correctly.

With airlines, you had that into the 1970s.

What we arguably need is more "stupid" (as in "keep it simple, stupid") regulation

Double right on. Needless complexity is probably the number one enemy of technology projects, consumer protections, market regulation, and good governance. Everybody at heart is a freaking architecture astronaut, and it's doing us no good at all.

As an example of how things might work, government certainly has a role in defining products in a complex market; otherwise consumers would be at the whim of anybody who could make a good sales pitch. In the airline industry, I buy a ticket to go from point A to point B at a certain time. You can do a lot of hand-waving about how "normal" tickets don't guarantee any of this and how a more nuanced pricing system can allow all the seats to be filled, but that's bullshit. You can accomplish the same thing by simply having a two-tiered system: tickets that get you somewhere at a certain time, and ad-hoc tickets. Add one rule, say ad-hoc tickets can only be purchased in the 48-hours prior to a flight leaving, and you've got all the features of our modern system without all the crap that goes along with it.

I think everybody means well, it's just that there are a ton of people in any regulatory system that can stop or slow-down things, yet they have absolutely no feedback mechanism in place at all to tell them whether what they're doing is actually helping rather than hurting. It's the same exact thing as we technologists see when we work in large organizations with byzantine structures that get in the way of progress and make no sense to anybody.

Did you really just "Double right on" the need for smart regulation and then proceed to armchair quarterback your way to another useless regulation?

Look, we don't have a problem with overbooking in this country (USA). I saw a chart with numbers of how many voluntary and involuntary losses of seats there were on each airline. Even if you add everything together for all the airlines, for the whole year, it's like 10,000. And a huge percentage of those are voluntary rebookings.

Do you know how many people fly every day?

You've just introduced an idea for yet another regulation to fix a nonexistent problem that will screw up the airlines pricing strategy and most likely raise ticket prices for everyone.

Just let the market sort it out, and it appears it already has. Most of the airlines have already revised their rebooking procedure.

We. Don't. Need. More. Regulation. Smart or not.

This is exactly the problem. Everybody wants smart regulation, and everybody thinks they are the smart ones.

I came back to delete my post, but I think I'll leave it up. You make good points.

My point was 1) the government has a role in product definition moreso than regulation, and that one regulation might do the work of 10,000 other ones.

I'll stand by that, but congrats on calling me out. If I were suggesting an _additional_ regulation, you would have nailed it.

But I was not. I was suggesting replacing about 5,000 pages with two sentences. Different thing entirely. I liked and sympathized with the rant, though.

Be careful you don't accidentally sound like the guy the OP was talking about: the person who just wants to tear it all down with some kind of blind faith that no structure at all is needed. Ever since the first markets were set up, there has been structure, provided for either by the traders or some external party. Product definition allows the maximum amount of freedom with the fewest rules. People can trade any way they want, but they deserve a simple and clear label for the thing they're trading -- which is not the current situation. I'd argue 99.9% of the people flying have no idea at all of the trade they made when they gave up their money for a ride somewhere. That complexity and obfuscation is an even bigger enemy than overregulation.

ADD: If I don't know what the hell I'm doing when I participate in a market, how could you possibly argue that regulations were either good or bad? They're impenetrable. No matter what side you come down on politically, that's way fucked up.

I'm sorry, i'm just laughing.

I appreciate your response, and I'm struggling to take it seriously, but I think you just admonished me for being one of those knee-jerk deregulationists while in the same breath suggesting that you can replace 5000 pages of regulation with two sentences.

I'll do my best to add a serious comment though:

The government has no business defining products. The government doesn't know what the market wants or what companies can offer, and it has no idea what the appropriate supply and demand curves look like or what features people value or not.

Again, we just witnessed a situation in which an unregulated part of the market bit United in the ass and cost them a few million dollars, and now are they are rushing to fix it, along with all of the other airlines. No intervention from the government was needed, and now the problem no longer exists. I don't understand why you think the government stepping in and "defining" a product is going to help.

There are many reasons why, but I'll just pull one out of my head: Governments have no idea what's coming. Any regulations or definitions for service unavoidably make it harder for new entrants to offer unique services and products.

Maybe one of the airlines wants to move to your two-tiered system. If the government mandates it, then we have one choice, whether it is the best or not.

I struggle to lay out my argument any more clearly, but I feel like you still, deep down, believe that the government has this secret cabal of smart people who are going to step in and, for example, sensibly define all of our products for us. Who are these people?

/edit In the spirit of trying to agree on something, I will agree that regulations are too complex across the board. It's one of my personal causes. That said, calling for "smarter" regulation is not going to help.

Ok, I give up.

I ventured into this to try to show my fellow libertarians that most times we are our own worst enemy. We can find common ground and make progress without having to break out Hayek every five minutes. I still believe that, but I've had enough for one day.

"...I feel like you still, deep down, believe that the government has this secret cabal of smart people who are going to step in and, for example, sensibly define all of our products for us...."

No. I do not. I believe in consent of the governed, and making progress through reaching agreement on items that both sides can accept. That's it. Thanks for the chat.

What's weird to me is you seem to keep trying to play this off as you being the reasonable one here, as if i'm being frustratingly obtuse.

Frankly, I don't understand what your argument is, because "I believe in consent of the governed, and making progress through reaching agreement on items that both sides can accept" doesn't mean anything.

I mean, consent of the governed usually means representative democracy, which is what we have. So, if that's what you're for, then all the regulations we have are perfectly reasonably determined. If that's not what you mean, I don't know what you mean. How would the system specifically change to be more "consent of the governed"?

We also have a system where we "reach agreement on items that both sides can accept". That's the problem with regulatory capture. We have lobbyists on one side and politicians on the other, and they both agree on things and then we get regulations. Ostensibly, politicians are acting on behalf of their constituents. If they are not, then you have a problem with our structure of government, not the regulatory system.

So far, your only concrete suggestion is that we replace 5000 lines of regulations with two sentences of regulation, which I've already explained why I think is a bad idea. Everything else you said is just feel good words that could mean anything to anyone.

You also seem to be assuming what my position is. My position is that in order to justify a regulation, we have to find a true and significant market failure. In such case, the first option should be investigating ways that the market failure could be addressed without regulation. And before a regulation is promulgated, we should require a cost-benefit analysis that results in the calculation that the regulation will create more benefit for society than it costs.

Your regulation suggestion would fail both of my tests. First, because the problem you're trying to fix is already fixed. Second because your proposed solution would cost much more than we are actually paying in inconvenience right now.

I have a lot of experience working in complex systems, and I have some government experience, and I know that systems are always much more complex than we think they are. I have an extreme amount of modesty toward thinking that I can introduce easy solutions to problems in complex systems. Government workers, most of the time are ill-equipped to step into a market and make it better.

10,000 people suffer for what net gain though? If we say the refund must be 20,000$ plus 5x the ticket price airlines will still optimize and be profitable, but they are going to hesitate to regularly break their contracts 30+ times a day.

Can you give an example of a regulation in the airline industry that's causing all these problems that is of the kind you describe? Because it sounds to me like a strawman.

For one, there's cabotage restrictions. From wikipedia:

> Cabotage rights are the right of a company from one country to trade in another country. In aviation, it is the right to operate within the domestic borders of another country. Most countries do not permit aviation cabotage, and there are strict sanctions against it, for reasons of economic protectionism, national security, or public safety. One notable exception is the European Union, whose Member States all grant cabotage rights to each other.

Virgin America is usually regarded as one of the better airlines, and personally I've had pretty good experiences with them. I'll pay an extra twenty dollars for the extra customer service. It would have been nice to see the company grow larger and become a threat to the big 4 (Branson himself wanted to go in that direction), but it got bought/merged with Alaska Airlines. Alaska Airlines has announced they are killing off the Virgin America brand sometime in 2019.

> "Because I'm not American, the US Department of Transportation stipulated I take some of my shares in Virgin America as non-voting shares, reducing my influence over any takeover," Branson wrote of his powerlessness to halt the pending merger. "So there was sadly nothing I could do to stop it."

Cabotage ends up being a form of protectionism, though it's usually touted as a national security thing.

Compare this to the EU, which has some dirt cheap flights. Ryanair might suck, but I've flown from Dublin to Amsterdam for $10. The EU has less restrictions (almost none for member states, I think?), so there's more competition. Some domestic airlines have been trying the Ryanair model, but I'd like to see what would happen if Ryanair was able to expand to the states.

This also means that foreign airlines can't operate flights between US cities, even if they'd be a leg of a larger journey. Instead they're reliant on US carriers to get people to their hubs. Toronto, for example, is the largest hub for Air Canada, and they have flights to dozens of American cities. There's no real fear that Canadian planes are any less safe than American ones, yet you can't use Air Canada to fly on a single ticket from an American city, via Toronto, to another American city. Air Canada's website won't even let you search for flights between two American destinations.

It's even worse for someone like Air Emirates. They only have a handful of places they fly out of in the states, so if you're flying from Dubai to somewhere not on that list you'd need another ticket. Maybe they'd like to do a San Francisco to NYC to Dubai flight, moving to a collector model, but they're stuck doing point to point. I'd imagine flying people into a domestic collector city first would be cheaper than the many non-stop flights they currently have.

http://fortune.com/2016/04/04/richard-branson-virgin-america...

I asked for an example of the kind of regulation 'zeteo was complaining about (ones that involve "hidden flaws," "regulatory capture," "the revolving door," and/or excessive "compliance cost").

Whether or not it would be a good idea to permit foreign airlines to operate domestic flights, such restrictions are open and straightforward protectionism. They are not some "tiny exception in article 57 paragraph 30" that a regulator snuck in weeks before being "hired by the affected companies at a multiple of their previous salary."

> Virgin America is usually regarded as one of the better airlines, and personally I've had pretty good experiences with them. I'll pay an extra twenty dollars for the extra customer service. It would have been nice to see the company grow larger and become a threat to the big 4 (Branson himself wanted to go in that direction), but it got bought/merged with Alaska Airlines. Alaska Airlines has announced they are killing off the Virgin America brand sometime in 2019.

True. To my experience, though, I think that Alaska's customer service is comparable to Virgin's. I despite most US domestic airlines, with the exception of Virgin, Alaska, and to a lesser extent Delta.

Jet Blue is generally very pleasant.

Cabotage restrictions really don't have anything to do with why Ryanair (or easyJet or Wizz) don't operate in the US though; it has no overlap whatsoever with the market they operate in, they don't do connecting flights and if the economics favoured the low cost model expanding to many more routes in the US then Southwest or US-based startups might have made more of a go of it in the last two or three decades (the US doesn't exactly suffer from lack of people with the knowhow and access to capital to start airline businesses if they think some routes are under-served). It's also possible for sufficiently motivated foreign entrepreneurs to circumvent with subsidiaries and joint ventures: the AirAsia operations are a good example of this.

Cabotage might kill off a handful of potentially viable routes between the largest cities for relatively unusual multi-stage flights, but it's not really the reason why most domestic routes end up being local monopolies or duopolies. Emirates might have an interest flying an NYC-San Francisco leg, but it's difficult to imagine a foreign competitor being interested in a Denver-Houston route, never mind Denver-Wichita or Denver-Durango

Other than Toronto, are there any airports that would really even make sense as transit points between two American cities?

I think the point is that you also can't do Toronto -> New York -> Washington D.C. and the reverse. presumably, you could get some people that wanted the full trip and some that wanted either leg and together have a profitable full route, but instead they are stuck with two separate routes, Toronto -> New York and Toronto -> Washington D.C. with no other options, and must rely on a a domestic airline to approximate that.

Two-leg flights with one end at Toronto would certainly work. But if it weren't for the national borders, I could see Toronto acting as a hub in the North American air travel system like Chicago or Detroit. For example, say someone wants to get between medium-sized cities in New England and the upper Midwest - say, for the sake of concreteness, Providence and Milwaukee. On this route you can fly Delta and change in Detroit, or United and change in Chicago, or other routes that don't make geographic sense (Delta via Atlanta, American via Philly or Charlotte). Why not Air Canada through Toronto? This particularly works in Toronto's case because of its position so far south in Canada, where a lot of flights between eastern and western US destinations might actually pass over Canadian airspace.

(Map: http://www.gcmap.com/mapui?P=pvd-mke,+pvd-yyz-mke,+pvd-dtw-m...)

"One of the great mistakes is to judge policies and programs by their intentions rather than their results." - Milton Friedman

In the matter of reforming things, as distinct from deforming them, there is one plain and simple principle; a principle which will probably be called a paradox. There exists in such a case a certain institution or law; let us say, for the sake of simplicity, a fence or gate erected across a road. The more modern type of reformer goes gaily up to it and says, "I don't see the use of this; let us clear it away." To which the more intelligent type of reformer will do well to answer: "If you don't see the use of it, I certainly won't let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it." - G. K. Chesterton

An existing regulation might not be perfect, but that still doesn't mean you should get rid of it without considering why it was put into place initially.

How about stopping the revolving door between those who are regulated and those is the agencies doing the regulation?

Conflict of interest appointments result in probably the vast majority of anti-market, cartel-style behavior.

That's not a good idea. The alternative is having regulations written by people who have no idea what they are regulating, which is the whole problem.

You can eliminate conflicts of interest via financial disclosures etc, without eliminating competence.

So you either choose a potentially adversarial actor who knows exactly what they're doing, or someone who has to figure stuff out but has not vested interest?

For the past two Presidential elections where the incumbent was term-limited, we've chosen the outsider candidate twice.

If these positions weren't appointed but elected - one could assume that the outsider would be preferred.

If conflicts of interest could be eliminated (I'd say reduced) via financial disclosures, why aren't they happening? I can name several appointees in the current and past 2 administrations that had conflicts of interest.

I agree with you, but is this also a symptom of another problem?

I'm thinking about it in the government-to-industry direction, and particularly where compensation is so high for these ex-govvies. Why are these people worth so much? Either because:

1. The regulations are so complex to get around that companies need to pay a premium for that knowledge. (Bad.)

2. The regulations have so many loopholes that I need to hire someone to help me do whatever it is I want to do, but legally. (Bad.)

Both of these would appear to favor entrenched players who can afford this talent.

People who used to be in government know the levers of power.

"You can eliminate conflicts of interest via financial disclosures etc, ..."

No, you can expose conflicts of interest that way, but merely disclosing who's on whose payroll does not actually eliminate any conflict of interest.

And it's a false dichotomy that you either get industry insiders or "people who have no idea what they are regulating".

The mistake here is to assume that there's a causal relationship between having worked in the industry and taking a pro-industry role as a regulator.

This isn't inherently true. Industry alums can and have taken regulatory actions in the public interest. Tom Wheeler, the former Chairman of the FCC, used to be a cable industry lobbyist and passed regulation in favor or net neutrality and despite the protests of the industry he used to regulate.

It turns out that the person and their intentions matter. When a revolving door person happens to take pro-industry actions it's not because they somehow fooled the government into thinking they'd act in the public good. The government knowingly appointed someone with pro-industry biases because the industry lobbied the government.

If we want the government to appoint people who will act in the public interest at the expense of the industry, we have to demand that. Sometimes that person will be from the industry. We may call them a dingo. But they'll turn out to act in our interests.

Does anyone else see an added benefit of a universal basic income, is that it could in a small way help disincentivize the revolving door between the public and private sector that sometimes results in regulatory capture?

No, that sounds like the most extreme version of UBI-as-panacea arguments I've seen yet. Why would the ability to earn $12k per annum for not trying to work have the slightest effect on ambitious high-flying executives' willingness to move from a very high-paying private sector role to a very high-paying regulatory role and back again?

Yes, that's exactly what I'm trying to point out! I'm not providing a solution, but merely saying that it's folly to treat all regulation as the enemy of free markets.

The point of "mindless "anti-regulation" is that "no regulations" is the default position, and it's the proponents of regulation who should substantiate their claims that a specific regulation should exist; also that the lack of sufficient evidence in favor should automatically result in the default position being more favorable. In relation to the Chesterton’s Fence parable, a lot of people think that the fact that no one knows why it's there is in itself the reason to remove the fence, since the most common reason the fences are built in the first place it to provide someone particular the advantage over everyone else (limit access to the territory, markets, etc).

Perhaps on the North Sentinel Islands now, or 4,000 years or so elsewhere in the world, "no regulations" is / was the default position. That isn't the case for recent history in most of the world.

Claiming that "no regulations" is the default position, and that all existing and future regulations must be reasoned, argued and articulated from first principles sounds like a distraction, more so than a reasonable way to approach the current political atmosphere.

Groundbreaking. Do good regulations but not the pointless ones. I'll be sure to inform my Congress representative.

IE it's hard to set regulations without being a subject matter expert. Most of the subject matter experts work in the industry to be regulated and we don't trust them to self-regulate and/or we just ignore subject matter experts in cases when we should listen to them.

This is why campaign finance reform is so important.

Arguably it's not that law makers are incompetent at recognizing good regulation vs bad, but the incentive structure is messed up.

I think of regulations as capital projects. There's an up-front political cost to passing them, an up-front cost to establishing them and then an ongoing cost to feeding the bureaucracy. Minimising that ongoing cost, or at least ensuring it's paid out of the gains from the regulation, would appear to be a dividing line.

Sometimes you have to dig in and take things on a case-by-case basis.

The article in question seemed to lay out useful and appropriate regulation for the airline industry.

And the protection that results from this kind of regulation often comes to be taken for granted, even on relatively short timespans.

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