- California bans non-competes and it is essentially the fastest growing economy in the western world. But if you read WSJ banning non-competes is a disaster.
- SOX is supposedly a disaster, but when SPACSs bypass that process they are almost universally terrible. Also, the stock market and the VC business have both done great under SOX.
I think we don't realize how good the existing US regulatory framework is. If we try to improve it we should have a strong status quo bias.
Source? From cursory Googling, it doesn't even seem to crack the top 10 US states, let alone Western world economies...
https://www.usnews.com/news/best-states/rankings/economy/gro...
Just a shot in the dark though.
Not too long ago there was news that CA is about to pass Germany to become the 4th largest economy in the world. (CA press release here: https://www.gov.ca.gov/2022/10/24/icymi-california-poised-to... original article by Bloomberg)
https://www.statista.com/statistics/187834/gdp-of-the-us-fed...
https://www.statista.com/statistics/187861/gdp-of-the-us-fed...
What's kind of a joke about that is that between 2020-2021 California added an Idaho.
Also, to undermine my point, Texas seems to have grown at almost exactly the same rate (80% increase in 20 years): https://www.statista.com/statistics/188132/gdp-of-the-us-fed...
Compare this to an excellent first world economy, Germany. I think all Europe and Japan is worse. South Korea is probably much better.
https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?end=2021...
So I think you could say California only grew at the pace of the fastest states in the US in the last twenty years (all with non-competes, which was my point) but the overall amount of growth was by far the most. The point is having no non-competes didn't seem to destroy it.
And here's the propaganda version -- I think being skeptical of this stuff is a good idea. https://www.gov.ca.gov/2022/10/24/icymi-california-poised-to...
I was being too flip and you were right to point this out.
Parent: This specific regulation causes unwarranted problems.
You: Wrong, because there exist regulations that are good and wrongfully impugned. <top reply>
Me: ???
I worked at an ad tech which decided engineers should not have access to revenue data. Nor should they have access to click data or other relevant data on how customers were doing.
Needless to say, if you are a transactional business who makes money when people perform an action - this is critical information to know. The company eventually lost focused and failed to IPO.
While all of this was done in the name of SOX. I don’t believe SOX required any of it.
SOX is a reasonable regulation, but there should have been a useful lower limit below which it doesn't apply.
When I was treasurer of a non-profit, I made us carry SOX insurance (along with some other insurances which were by far our biggest annual expenditures). All this was silly given that we had about $2K of dues every year and less than $10K in savings. Consequently, we couldn't possibly have paid for the legal fees required if we got called on SOX compliance.
A limit somewhere around $1M in revenue/assets would probably be useful for SOX compliance dropout.
One example of this in the Bay Area was the Ghost Ship Fire [1] where they were forced to live off the grid because of over regulation, and then dying in a fire that some of that regulation was trying to prevent.
It's a classic problem. Laws have enforcement costs and knock-on effects.
To say that people were "forced" to live there due to overregulation is quite a stretch I think. I've known a few creative people in the bay area who lived in similar situations and they all were making an active choice to live in communal housing illegally converted from industrial use. They found it creatively energizing.
A better Bay Area example if housing regulations stopping all growth and leading to all sorts of problems, but that's well covered.