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Comment by lazyguy2 | Hacker News Reader

This is normal.

The only people who are experts in a particular industry are the people running the businesses that make up that industry. So the government, in order to try to make rules that don't suck, depend on their input when drafting the rules.

This, and in combination with significant lobbying, means that given enough time the industry being regulated gets to have significant amount of control over the rules being created.

Oil, airflight, cars, steel production, cable television industry, etc etc. Everything that the government tries regulate suffers the same fate to differing degrees.

And when it comes to certain industries, like banking or medical industry, and handful of executives of top corporations end up rotating in and out of government. Being a VP one year, a lobbyist for a couple years, and then end up as a higher level bureaucrat on some cabinet or board somewhere.

They have a phrase for it:

https://en.wikipedia.org/wiki/Regulatory_capture

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> The only people who are experts in a particular industry are the people running the businesses that make up that industry. So the government, in order to try to make rules that don't suck, depend on their input when drafting the rules.

That was not always the case. Once upon a time, there was the Office of Technology Assessment[0]. As to why it is no more, one need look no further than Newt Gingrich[1][2]:

> OTA was abolished (technically "de-funded") in the "Contract with America" period of Newt Gingrich's Republican ascendancy in Congress. According to Science magazine, "some Republican lawmakers came to view [the OTA] as duplicative, wasteful, and biased against their party."[0]

0 - https://en.wikipedia.org/wiki/Office_of_Technology_Assessmen...

1 - https://www.theatlantic.com/technology/archive/2012/10/the-m...

2 - https://economix.blogs.nytimes.com/2011/11/29/gingrich-and-t...

Correct. Warren proposes to reinstate it:

https://techcrunch.com/2019/09/27/to-curb-lobbying-power-eli...

OTA isn’t a panacea though. You have to figure out ways to make it financially reasonable for people to blow the whistle on massive firms. The Waste, Fraud and Abuse laws might be a good template.

Not the only presidential candidate for it. Not sure if Bernie is for it but I think he’s mostly reasonable and would be for it

https://www.yang2020.com/policies/reviveota/

The OTA didn’t solve the problem at hand. A separate office with even less expertise than the one regulating the industry is not in a position to suggest sane regulations.

What could the OTA bring to the table when it came to regulating something like mines that the EPA/DEQ wouldn’t have?

If OTA didn't solve the problem at hand, the solution might be to improve it, rather than abolish it.

One does not need to have more expertise to come up with some sane regulations, i.e. you can't dump trash in the river, a tax filing co. can't lobby for tax legislation.

Improve it how?

The tax filing co isn't the one going to congress, they hire some PR company that does lobbying to talk to congressmen about tax law. Of course, that PR company just so happens to hire people from tax filing co because they know the industry. With OTA, the PR company goes to OTA to talk about tax law, it's just adding a different step to the process.

Maybe the contacts the congressman is allowed to have should be controlled. Why would he ever need to be in touch with a PR firm? PR is the word Bernays invented to avoid using the word propaganda. Why would it be controversial to limit propaganda?

If one does not need expertise then it seems like the OTA would be pointless wouldn’t it? Their purpose was to add expertise but they were technological generalists with a political focus rather than apolitical experts so it’s not clear to me that they added any unique value despite being appealing as a concept.

What is wrong with being a generalist? If general perspective weren't important then the military wouldn't have general officers.

A separate office could have less expertise but a broader perspective, and be less interested in suggesting regulations (although broad experience might give it extra heft in articulating regulatory principles) than in pointing out both ineffective regulations and attempts to undermine effective ones.

Think of the OTA as connective tissue connecting the different regulatory specialties if you prefer.

What makes you feel the OTA wouldn't similarly fall victim to cronyism and lobbying? Soon enough your head of OTA would just be another corporate flunky like any other agency.

This is a result of structural issues with our government, it's not as if adding yet another office will magically change that fact.

Part of it's the result of extreme centralization and integration of industry, too. If no individual companies work across the entire scope of what a given agency or department regulates, and if there are many such companies rather than just a few, it's harder to draw a straight line between a given regulation and direct benefit to every single one of your potential employers when you rotate back out into the private sector. Would still happen, but it'd be harder to get a small group of industry insiders to agree on how regulation should look, easing regulatory capture at least a bit, and maybe a lot.

It depends on the mandate provided to the agency.

Regulators at the federal level have be de-fanged because of the increasing reactionary forces controlling pursestrings in Congress. It became obvious with OSHA and now even the FAA is a wimp in the face of pressure from Boeing. That's part of a strategy by certain people who want to erode trust in government.

It's possible to structure things in a way that limits politicalization.

There’s always a whole lot of idealism when people call for regulations as a panacea.

Then you end up with companies like Boeing who are the only players in the country and no one even tries to compete given the massive overhead and then people get surprised the one company who gets 99% of the oversight ends up having a say in the oversight.

This type of thing needs constant vigilance and churn to avoid capture. But at the end of the day it’s just going to come with the whole arrangement every once in a while.

Of course we could come up with ways to have this type of oversight which the market can’t practically account for financially or organizationally but again that’s wishful thinking as almost every situation like this has resulted in some level of capture.

Pretty much the only option is hoping they actually attempt to fix processes when it goes wrong, at least for the next while. But more often than not rules get rushed in during the panics which merely reinforces the company’s monopoly by adding even more special rules only a billion dollar entrenched company with the decades of other specialized processes they themselves helped establish through lobbying.

No one wants to remove regulations for the sake of competition but I think we need to be more realistic about the monsters we’re creating in exchange for worse monsters.

Instead of being surprised every time the fragility of the whole system gets exposed at least once a decade. While perpetually hoping and expecting for better oversight for the next time it.

> Then you end up with companies like Boeing who are the only players in the country and no one even tries to compete given the massive overhead and then people get surprised the one company who gets 99% of the oversight ends up having a say in the oversight.

Tangential, but I've read comments on HN saying that part of the reason is that Boeing, along with Lockheed, are strategic to the US and there are actually some regulations to keep them on life support with government money, so that when a serious war starts, they're still there to serve US military's needs.

That sentiment applies a lot in banking. See eg https://www.alt-m.org/2015/07/29/there-was-no-place-like-can...

> No one wants to remove regulations for the sake of competition

I suspect a lot of people actually do want to do this. In cases where all else is equal, I’d strictly prefer less regulation. Even where regulation has an epsilon positive impact, I would often prefer to not have that regulation.

There are a lot of regulations that are more harmful than helpful. How many transit projects don't get seriously proposed because the cost of looking for endangered species (in a city that is already not conducive to wildlife) makes the costs too high - resulting in everybody driving at much higher environmental cost but not study needed for that.

I don't have answers, but the problem is real.

ESA section 7 assessments are insanely cheap, especially in cities. Maybe hire a different consulting firm. We would walk up and down the road, if it was completely urban and there is no habitat for the species you literally don't even need to look. The people who do the checking get paid about $20/hr. Sounds like someone is lying to you about why projects aren't being funded.

American transit costs are very high by international standards. People like to blame EIS or regulations or unions, but Europe has all of those things too and is much cheaper than the US. We just suck:

https://www.citylab.com/transportation/2018/01/why-its-so-ex...

I agree fully. The regulation I pointed out was one example, of why things go wrong, but there is something more that I don't know going on.

> There’s always a whole lot of idealism when people call for regulations as a panacea.

Literally no one ever calls for regulations "as a panacea."

Calling it that and rabidly using it like a hammer every time the smallest problems happen, regardless of long term side effects which prevent bad behaviour from being replaced by better companies, is not much different... at all.

> rabidly using it like a hammer every time the smallest problems happen

A straw man... with rabies!

I'd have thought the government would need to maintain some expertise in the "industry" of collecting taxes, at least. When I file a tax return in Australia, I do it via a government website.

A major complication is that here in the US we have local (city/county), state, and national taxes, all of which can vary by location.

The way India handles that is by having a progressive income tax that is collected at the federal level and sales taxes at both the federal and local level (CGST and SGST). Apart from federal funding of states, they also get all the SGST taxes and are free to set their rates for fuel, road taxes etc. Having multiple levels of income tax is always painful.

Also, the government provides free java/excel based tax filing systems with a certain level of sanity checking.

Apart from this there are several fremium sites like cleartax to help file taxes but they don't get to lobby.

(yes, corruption is inherent and tax evasion is rampant, but at least filing taxes aren't as painful as US tax filing seems to be)

To nitick, employees don't need to use Java on the web to file taxes. IIRC there is also XML so other software may generate it.

This isn't a reason that the feds couldn't do it, though. (The federal government only deals with one kind of taxes: federal taxes).

It's only an argument that the state and local governments would need their own, parallel systems if they wanted to participate.

The Federal government does have an online system to file your taxes for free.

https://www.irs.gov/filing/free-file-do-your-federal-taxes-f...

But if you're in a certain income segment, you can plug it all in online. The tools are there and the all the mentioned governments need to verify. It would be easier for them to send me the numbers and I can dispute if I disagree (or want to itemize)

"The only people who are experts in a particular industry are the people running the businesses that make up that industry."

Funny. Yes. I worked at a consulting firm doing permitting for California (wetland delineations etc). The only way to get something approved was to use a former gov employee. They could write a proposal "correctly", attach the correct docs, etc. Gov employees knew the cash wasn't in their position, but, in consulting later on. Tin foil hat on: I also think, the Gov employees knew when a proposal wasn't from a former Gov employee -- and would reject -- thus keeping the cycle going.

This is 100% opposite my experience in wetland water quality permits. Sorry your state has super corrupt army corps districts. Ours (NC) let's all kind of stuff slide, but we still do thorough work that meets all applicable regulations even when the assessor insists they don't need the entire NRTR.

I'm in the northeast and my state is exactly like CA in this regard (source: good chunk of immediate and extended family works for the state). I've lived in three other states too and they weren't like that but they were all rural enough where people didn't really need government permission to do what they wanted and the political will to go after reasonable people doing reasonable things but without government approval wasn't there.

Everywhere I've ever lived I've seen a pretty wide variation from place to place within a state that seems to get applied on top of the state's baseline. In the poorer areas anything reasonable pretty much gets waved on through and in the rich areas they're much more controlling (because they have the resources to throw at it) and you can benefit from hiring people who know people or are at least known as "regulars" to whatever official is calling the shots. It's a lot like hiring a traffic lawyer.

I've seen similar situations in Canada:

- In Nova Scotia, an acquaintance food & safety inspector became a consultant to industry on how to navigate the arcane laws of food & safety. There was no fraud or wonkiness there that I could easily perceive - the companies wanted to do the right thing; knew they were not experts in what the right thing is; so hired a person they were confident knew what the right thing is.

- Though we had our own bright security analysts in the company I worked for, when dealing with the public sector we have been heavily advised, and learned the wisdom of, hiring from a pool of rotating local security analysts that knew how to write documents, architecture, assessment in a way that would clearly conform to regulations. Again, not due to any wonkiness - our security analysts who knew the product worked with security analysts who knew the rules, to make sure solution is amenable to all.

Its certainly the norm for industry leaders to lobby and even propose draft rules/legislation to regulators/legislators...however, it is not normal for the government to willfully hide communications from the industry to government (which was done by the IRS in response to a FOIA request) and its outright illegal for the government to pay/reimburse the lobbyists themselves which the IRS seemed to do here. That's right your tax payer dollars were used to pay for lobbyists travel expenses to lobby the IRS to the detriment of taxpayers.

It's common but if you look around the world the level of regulatory capture in the US is in no way normal.

Blame the combination of a terrible voting system and relatively few representatives compared to the incredible prize of a slice of America's giant economy.

But reform is possible, effectively regulated competitive markets exist, other countries manage it. America can too if you're willing to work to make it happen.

I'm sorry but is your argument here that the IRS doesn't have experts in tax law?

No, the argument is that those IRS experts in tax law switch jobs between writing the regulations for the IRS, and then doing "various tasks" for the private companies that work in tax, including lobbying congress for more complex tax laws thus ensuring more people have to use the private tax companies to get their taxes right as opposed to taxes being simple enough to understand without needing help.

While you could lobby congress yourself, odds are you don't really understand tax law in detail well enough to be effective, while they do.

Thanks for clarifying your argument. I disagree though that lack of understanding is what prevents people from lobbying congress themselves. People and even organizations in favor of simplifying the law cannot compete with, eg. intuit's 2.5 million $ lobbying spend in 2018. Why should individual people have to lobby their congress in a democratic system anyway? If you look at polling data on this subject it will show a majority of Americans in favor of tax code simplification. Yet in the past few years we've actually received the opposite.

Everybody is in favor of simplification until it eliminates the complex part that benefits them. Eliminating the mortgage interest deduction harms a lot of people because their taxes go up significantly. (the latest tax reform pushed the standard deduction high enough that most people don't gain anything by deducting their interest - maybe in a few years nobody will care anymore and this can be eliminated)

People want simplified taxes, but they write letters and vote when their taxes go up, so more complex taxes are rewarded despite that want.

There are ways to fight this. Controls on corruption (aka lobbying) and removing the revolving door between industry and government would help greatly.

I know I may catch shit for this but lobbying is not synonymous with corruption. Lobbying, lobbying groups and lobbyists actually serve a very valuable role in the interface between the government and the people their rules impact. Like every endeavor, bad actors can give the whole system a negative stereotype but judging anything by its worst examples is not a reasonable way to assess that thing. And no, I’m not in anyway a lobbyist or associated with that industry.

> lobbying is not synonymous with corruption

No, but I'd wager is just as often as not

Lobbying is not the problem, money changing hands is. In its current form, lobbying works through campaign contributions (and potentially other favors). These are not “worst examples”, it’s standard practice. Why do you think a politician would listen to someone representing Comcast’s interests? Prohibit campaign contributions and you will have politicians listen to what regular people want a lot more.

Compare and contrast https://slatestarcodex.com/2019/09/18/too-much-dark-money-in...

Politicians listen to lobbyists because it is impossible for a human to understand all laws they pass. I'm in favor of things like the "read the bills act", but the only thing they really do is allow time for groups interested in the law to read the final text and mobilize their members to write vote X on the bill letters.

Sure I can read one bill and understand the details, but it would take more months than there are in a session (2 years) to UNDERSTAND all the bills congress passes. If I were a lawyer I could understand them a little faster, but not enough to make a difference.

The result is congress needs trusted experts to write the laws for them. Very few people are experts in anything useful that they are not paid for. (the exceptions are things like movie watcher - which congress is already as much an expert as everyone else)

It's giving groups with money outsized influence, undermining the democratic process. It's corruption.

Our best and brightest don't go into government because the government does not offer competitive compensation.

But compensation is not the only motivator. And in a more equitable society (eg one where illness doesn't threaten total financial ruin), it would be less important.

Are you saying our "best and brightest" are too greedy to [want to] govern [well]? That seems self-contradictory to me.

You are putting words into my mouth.

Plenty of individuals pursue high-paying jobs because the financial security it provides their family [including children, spouse, and possibly infirm parents]; and to pay back the student loan burden that the American institution levies on their best and brightest.

I worked in a government job that demanded strong technical expertise. We got two kinds of people: those who knew they could make a lot more money in the private sector but took the civilian job out of a sense of duty or a desire for stability, and those who weren't smart enough for the private sector and knew they could get away with half-assing it in the government. The problem was that people with valuable skills and expertise got lumped in with the paper pushers at the DMV every time a politician lined up to kick the "overpaid government workers" football, so Congress wouldn't let them pay industry rates. Result: the "best and brightest" took advantage of lucrative programs like student debt forgiveness, got some good experience on their resume, then left for industry and literally doubled or tripled their salaries overnight.

A government, for the people, should ask the users and customers of the corporations, its citizens who suffer the most from top-down decisions.

What recourse do average citizens have when corporations, which must always act in their own interest, decide to prey on them? Governments are supposed to protect us from that shit.

It should be a triangle: People choose which corporations to support, governments make sure people have a choice.

Even when we accept the issue per se, there remains the problem of trying to hide it. Why was the FOIA request originally denied?

> This is normal.

Whoa there. It may happen, it may even be common, but it’s certainly not expected or ok.

There’s also a huge difference between the regulatory capture of businesses like oil, airlines and banking that pose danger so the government regulates them, and this situation where the IRS apparently decided it was more expedient to essentially give these companies a business rather than write software that would implement their own regulations.

So, it’s a very different situation.

In fact you’ve got to wonder what the IRS is thinking. They should be holding all the cards. But they act like the Intuit has them over a barrel. The IRS gave them a business under certain conditions. Intuit has failed to meet the terms of the agreement. So, start writing the software and terminate the agreement once its ready.

This sounds like a great application for all of those professors who know a lot but never go to the industry.

The only people who are experts in a particular industry are the people running the businesses that make up that industry.

False premise. Most experts on/in a given field are employed within it, but employment/economic interest is by no means a prerequisite for expertise. Regulatory capture is a real thing, but it's fallacious to argue that because regulatory capture exists, governance is the problem. After all, markets are just as easily captured as governments, and businesses are open in their pursuit of market share and monopoly.

I agree with you for 99% of businesses, except this is the exact situation where your argument doesn't apply.

The IRS should know a thing or two about filing taxes, should they not?

Isn't that the problem though? That we call this normal. It's definitely not the case on other democracies around the world.

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