The Road to Hell
There is more to industrial policy than just hurling money at projects. Regulatory holidays can accelerate progress.
Closest Point of Approach is about helping decision makers predict bureaucratic action. The more of these cases we see, the better our pattern recognition becomes.
Chinese flying taxi sector claims global lead thanks to regulatory support
Deregulation, or at least the suspension of regulation until some threshold of industrial maturity, is an important policy choice.
“A Shanghai flying taxi company says that China’s “low altitude” industry is edging ahead of western rivals, thanks to more supportive regulators, technological breakthroughs and cut-throat competition in the Chinese logistics sector.”
Half of British aid to Ukraine remains unused over bureaucracy delays - media
Intent doesn’t win wars.
“The International Fund for Ukraine was established in August 2022 to finance military training and armaments for Ukraine following a full-scale Russian invasion.
“It was conceived as a flexible, low-bureaucracy facility administered by the Ministry of Defense on behalf of an executive team including the UK, Norway, the Netherlands, Denmark, Sweden, and Lithuania.”
Germany promises to cut down paper bureaucracy
Even German Greens want to cut bureaucracy.
“"It's a bit like building up belly fat over the years. You can't get rid of it overnight by pressing a button," he said in an interview with public broadcaster ARD on Wednesday.
“Economy Minister Robert Habeck of the Greens said the draft law was a step in the right direction.
“"At the same time, it is clear that we cannot stop here in order to achieve noticeable relief," Habeck said.”
California’s Wage Hike May Accelerate the Adoption of Restaurant Technology
One wonders if we’re not getting the horse and the cart mixed up here.
Technology in fast food was already a growing trend. Perhaps the wage hike is a reaction to the adoption of automation and not the driver. That’s not to say it won’t accelerate its adoption.
Maybe this is an example of reactive regulation.
“While customer preference for autonomous ordering, particularly among younger consumers, is driving the adoption of self-service kiosks, the minimum wage increase could accelerate tech adoption in certain areas. Fast food franchisee Harsh Ghai, who owns 180 Burger King, Taco Bell, and Popeyes locations, is one such business owner who plans to install more self-service kiosks in response to the wage increase. Ghai told CNN in an interview that he is also looking to implement AI-powered drive-thru ordering and aims to remove registers completely from his restaurants. He argues that these changes are necessary to offset increased labor costs and maintain profitability.”
The regulation of higher education has grown exponentially over the past two decades.
Was it so dangerous before?
Dan Ariely tells a fantastic story about approved vendors when he needed to buy a sofa as a junior professor.
Once you’re an approved vendor, you have an immediate power to charge a premium.
“This is bureaucracy. It’s not about what makes sense.”
"Product managers in banks are glorified PowerPoint monkeys"
“The financial services sector is blighted by regulatory complexity. It's not simply about designing the best products but designing products that fit with regulations. This is a challenge, but banks' response to regulatory complexity is dysfunctional: they typically throw bodies at it, which creates additional complexity and more points of failure.“
Trump Vows to Crush the Civil Service, But He’s Not the First President to Try
A return to the spoils system would introduce uncertainty to the federal government. In displacing institutional knowledge, it would throttle its effectiveness, at a minimum. Prior attempts have failed because of incompetence.
“Schedule F could functionally restore the old spoils system. A federal bureaucracy loyal to Trump would give him unprecedented power over the government, including the Department of Justice, the Internal Revenue Service, and other departments and agencies historically run with minimal political interference. And unlike four years ago, Trump now benefits from a reserve corps of loyalists ready to fill the tens of thousands of would-be government vacancies. Right-wing groups like the Heritage Foundation are pouring millions of dollars into building databases of recruits and training programs to prepare them for loyal service.”
Berlin now has a museum for insane bureaucracy
Again, we ask, how bad is it in Germany if they are open to things like this?
“A number of ironic artworks have been installed intended to poke fun at all this the orderly insanity. As visitors enter the 350 square metre space, they pass through a hollowed-out tree intended to represent the 52 trees that are felled each day to provide government paper. Weirdly, this exhibition also features a BDSM room where visitors can shackle themselves to a giant “§” (the typographical character for citing sections of legal code), which stands in front of a darkly illuminated wall on which the words: “Call me daddy state” are written.”
The NLRB Gets Supreme Court Review
More pushback on Chevron-like deference to the agencies.
“The National Labor Relations Board has nearly carte blanche authority to punish businesses, and beware those that get on Big Labor’s wrong side. On Tuesday the High Court will consider in Starbucks v. McKinney whether the board’s diktats deserve special judicial deference.”
Real-Estate Agents, Investment Advisers Chafe at New Anti-Money-Laundering Rules
There is a tradeoff in which we should weigh the cost of the regulation against the perceived benefit. Bureaucracy can be indifferent to the costs it imposes on others as it seeks only to maximize its goal without any kind of budget constraint. Here, in an effort to eliminate completely the possibility of money laundering (and in the absence of any data suggesting that VCs and other investment advisers are a channel for it), FinCEN seeks to make the advisers do their work for them.
“Instances where private funds and real-estate purchases were used to launder illicit funds have garnered attention in recent years, but many industry participants feel the problem isn’t a systemic one. In letters to FinCEN, industry proponents questioned whether the threat warranted costly new processes and paperwork.
“Andreessen Horowitz, one of the largest venture-capital firms in the U.S., said in a letter that the proposed rule for investment advisers likely would result in “expensive and duplicative regulation with no material benefit to law enforcement or reduction in the risk of illicit financial activity.”
“The firm has asked FinCEN to exclude venture-capital firms from its rule, arguing that there is little evidence that the firms are a target for money launderers.”
San Francisco Celebrates Its New Public Toilet
It only took a year and a half. Thankfully, a private player helped make it happen.
When did building things get so hard? Oh, that’s right.
“San Francisco closed the lid Sunday on the saga of a $1.7 million public restroom. To commemorate the commode’s installation, residents celebrated at a “potty party” they called the Toilet Bowl.”