Hey, Sizzlechest

Sometimes, it's better to keep your head down and avoid notice.

Everyone Is Under Investigation

When I first came to New York, one of the guys on the desk played a tape after hours. We huddled over it. It was a bootleg of a comedy performance by the Jerky Boys with their infamous “Sue Everybody” bit.

It’s funny because it’s true.

The US government is investigating almost half of the market capitalization of the S&P 500. Because reasons. If you look hard enough, hey, you just might find something.

‘Mr. Clifton follows the intersection of business and government, a growth industry. He calculates that companies representing about 40% of the market capitalization of the S&P 500 are under investigation by the Justice Department for something.’

How Harris Obstructed California Home Construction

The Rube Goldberg apparatus continues uninterrupted.

Step One: establish regulation and a hostile environment for developing homes.

Step Two: come riding to the rescue with promises of policies to counter Step One when things go wrong.

‘California’s depressing homeownership rates are a direct result of the policies embraced by Ms. Harris and her fellow Golden State progressives. As attorney general, she put the interests of climate activists ahead of aspiring homeowners. She opposed regional plans that would have allowed for more growth on the suburban fringe, where housing is more affordable. In the end, restrictions on building on the periphery pushed millions of Californians to flee to more affordable states.

‘Shortly after taking office in 2011, Attorney General Harris issued a comment letter criticizing a plan to add 79,000 housing units in northern Los Angeles County’s Santa Clarita Valley. Rather than removing the regulatory burden around new-home construction, Ms. Harris directed the local planners to develop a “detailed” Climate Action Plan, set “binding emissions reduction targets,” and demonstrate that the plan would “curb low-density sprawl and increased driving.”

‘Ms. Harris also used litigation against planners. In 2012, the attorney general joined a lawsuit brought by two environmental groups against a plan to expand the highways around San Diego. The groups that initiated the litigation opposed the transit plan because it would “induce sprawl and reinforce the region’s dependence on car-oriented transportation.” Ms. Harris failed to convince the California Supreme Court that the climate assessment supporting the plan was unlawful, but the decision came six years after the suit was filed. It’s a familiar story in California. Developers face almost unlimited lawsuits from environmental and other interest groups, which can slow projects down for decades.’

New U.S. Merger Rules Would Weigh Heavily on Private Equity

The FTC is requiring more documentation for mergers and acquisitions approval.

You know who benefits from this? The bigger companies that can shoulder the administrative burden are the winners here. PE shops will adapt. This will actually be part of their competitive advantage in comparison to strategic acquirers. Larger PE shops will have an advantage over smaller ones.

‘On Oct. 10, the Federal Trade Commission voted unanimously to expand the amount of information collected under the Hart-Scott-Rodino Act, which established the federal review process for mergers and acquisitions. The new rules, initially proposed more than a year ago, are slated to take effect next year.

‘Antitrust lawyers call it the biggest change to the Hart-Scott-Rodino process in decades, one that will saddle private equity with more paperwork, fees and headaches, but might not—the industry hopes—result in more blocked deals. Business lobbyists may yet sue to block the changes, but so far haven’t tipped their hands.’

Musk’s SpaceX Sues California Regulator, Alleging Political Bias Over Rocket Launches

The California Coastal Commission denied the US Space Force’s request for SpaceX to launch up to 50 rockets annually from Vandenberg Space Force Base, citing concerns about Musk’s political positions and his outspoken demeanor.

Nobody is stopping him from saying what he thinks. Is it a violation of his First Amendment rights?

‘In a 284-page lawsuit, filed Tuesday in California’s central district, SpaceX accused regulators of overreaching their authority and violating Musk’s right to free speech.’

Who’s Really Cutting Medicare?

Medicare Advantage providers are responding to higher medical loss ratios and declining government payments with shrinkflation.

You pay the same premium, but the insurance companies offer fewer benefits and make it more difficult to access them. They’re increasing deductibles, too. That’s for the Medicare Advantage players who are staying in the market. Over 7% of the insured are going to have to find a new provider.

Let’s just see how well the proposed home care plan goes. That’s a savagely expensive enterprise.

‘For the past two years the Administration has slashed payments to Advantage plans even as costs and utilization have been increasing. Baby boomers need more joint replacements and other procedures as they get older. Hospitals and physicians are passing on their rising costs to insurers in new contracts.

‘Berkeley Research Group projected that Medicare Advantage medical costs will climb 4% to 6% next year. This is creating a financial squeeze for insurers. The Administration says its Advantage cuts are nothing to worry about because plan premiums are expected to remain stable next year. This ignores that insurers are scaling back offerings and benefits.’

A Nobel Prize in Economics for the ‘Inclusive’ Free Market

Institutions and rules matter. We tamper with them to our detriment.

Democracy requires that people can build wealth and share in the prosperity.

‘Why do political elites sometimes favor property rights and the rule of law and sometimes oppose them? The three Nobelists’ research examines European colonization of other continents. They show that where there was a relative absence of diseases, such as malaria, there were more colonizers. These colonizers were too numerous to get rich by exploiting the natives, so they created wealth-building institutions. But where colonizer mortality was high, the colonizers who survived simply extracted wealth from the natives. This explains why Canada and the U.S. did relatively well as colonies and many countries in Africa and Latin America did poorly.’

Kamala Harris’s Rural Broadband Flop

Policy is easy.

Execution is hard.

A good policy that is badly executed is a bad policy.

‘Other factors have kept Ms. Harris’s high-speed program in the slow lane. Testifying before a congressional oversight committee, one state government official described “a chaotic implementation environment” marked by “dysfunction” and “delays.” The administration, she said, “has provided either no guidance, guidance given too late, or guidance changing midstream.” Associations representing broadband builders in states across the U.S. are sounding the alarm, warning that the “program will fail” absent a course correction.’

San Francisco vs. the Biden EPA

San Francisco dumps dirty water into the Pacific Ocean. The Pacific Ocean is dirty. Therefore, the EPA sues to hold San Francisco responsible for the Pacific Ocean being dirty.

Other people pollute the ocean. They don’t get sued.

The City of San Francisco thinks it’s unfair to single it out for punishment.

Welcome to the party, pal.

‘Well, well. Look who’s asking the Supreme Court for help against overreaching regulators. On Wednesday the Justices will consider whether the Environmental Protection Agency can punish the city of San Francisco for dirty water in the Pacific Ocean.

‘City and County of San Francisco v. EPA involves a permitting scheme under the 1972 Clean Water Act. The law requires localities and businesses to obtain permits to discharge pollutants into waterways.

‘San Francisco operates a sewage and stormwater treatment system that experiences overflows during heavy storms, resulting in effluent discharges into the Pacific. The EPA in 2019 imposed conditions on its permits that hold the city’s system responsible if its discharges “cause or contribute” to water in the Pacific that violates federal and state standards.

‘EPA and the environmental group San Francisco Baykeeper then sued San Francisco for sewage discharges since 2013 that they say contributed to dirty water in the Pacific. Each permit violation is punishable with fines of more than $66,000 a day. San Francisco’s potential liability runs into the hundreds of millions.

‘San Francisco says it’s unfair to hold it responsible for the ocean pollution since there are hundreds of other culprits. The city adds that the Clean Water Act lets EPA specify limits only on discharges or technology to control pollution from so-called point sources.’

The key challenges for machine-readable and executable regulation

Is it possible to use AI for regulation?

‘“The conversation around machine-readable and executable regulation may very well resemble this turn of events. After all, in its onset, the idea behind machine-readable and machine executable regulation was to “translate” “human” regulation into terms machines can understand. Now, with the rise of the Natural Language Models, it seems this “translation” may no longer be necessary, though it will be necessary to maintain the principles of transparency, explainability, accountability.”

‘However, Thirer explained that even if a direct translation of the regulation from legal code to computer code may soon not be needed, discrepancies between regulatory terms and regimes need to be settled in order to create a workable machine executable regime on a global scale.

‘“The challenge to that may arrive from a very surprising direction – the regulators themselves,” continued Thirer. “This, due to the fact that whereas regulators have really stepped up in terms of technical standards and uniformed reporting in recent years; the current trend in global regulation is “Agile Regulation”, which is closer, in nature, to norms-setting than descriptive regulation.”’