The Cure Is Worse than the Disease
What do you call it when you try to solve non-linear problems with linear thinking?
A Plastic Bag Ban to Fix California’s Bag Ban?
Regulators are very good at thinking in a linear fashion, peppered with assumptions about behavior. You’re got to give them props.
Step one, ban single use plastic bags but permit heavier, multi-use plastic bags.
Step two, see an increase in people throwing out the multi-use bags, leading to an increase in the weight of plastic waste.
Life would be easier if people didn’t consume.
‘California is known for its ban-first-ask-questions-later approach to problems, and in 2014 it was the first state to pass a comprehensive ban on single-use plastic bags. Whoops, plastic in the garbage went up, not down. Naturally, California politicians now think this justifies another new ban on carryout bags that will further inconvenience citizens.
‘Specifically, the weight of plastic bag waste per capita increased after the original ban was passed. Even a study called “Plastic Bag Bans Work,” done by environmental and public interest groups, features a table showing that the amount of plastic bags thrown away per 1,000 people in California rose from 4.08 tons in 2014 to 5.89 tons in 2021. The report blames this on a “loophole” in the law.’
Supreme Court declines to lift blocks on Biden administration’s education anti-discrimination rule
The Supreme Court maintained injunctions on the Administration’s Title IX rule that would have changed the way the law applies to transgender students, including the treatment of sex-separated spaces such as locker rooms and participation in women’s sports. Twenty-six states as well as schools in other states have sought and obtained injunctions against the Administration’s regulation under Title IX.
‘The Supreme Court on Friday rejected the Biden administration’s plea to partially lift two injunctions barring the Education Department from enforcing most of its Title IX rule.
‘The regulation, which took effect earlier this month, interprets the federal education law that bars sex-based discrimination to include protections based on gender identity, sexual orientation and pregnancy status. It also overhauls much of the Trump-era policy that mandates how schools must respond to sexual misconduct.’
California bill to regulate AI advances over tech opposition with some tweaks
California’s legislation to regulate the development of large language models proceeds out of committee.
‘In a letter to Gov. Newsom Thursday, Bay Area representatives Anna Eshoo, Zoe Lofgren and Ro Khanna asked Newsom to veto the bill, raising concerns about effects on the state’s “innovation economy.”
‘“SB 1047 creates unnecessary risks for California’s economy with very little public safety benefit,” the letter reads. “SB 1047 is skewed toward addressing extreme misuse scenarios and hypothetical existential risks while largely ignoring demonstrable AI risks like misinformation, disinformation, nonconsensual deepfakes, environmental impacts, and workplace displacement.”’
Here Comes Kamala’s Mortgage Forgiveness
Sixteen years after the Global Financial Crisis and we’re subsidizing mortgages for risky borrowers like our boss is watching.
Mortgage forgiveness is the new student debt forgiveness.
‘About 70% of single-family mortgages are guaranteed by federal agencies or government-sponsored enterprises such as Fannie Mae and Freddie Mac, which are regulated by the Federal Housing Finance Agency. Ms. Harris wouldn’t need Congress to subsidize home buyers. The Obama and Biden administrations have done so merely by easing credit standards and reducing costs to borrowers for government-backed mortgages.
‘The Federal Housing Administration—which insures homes for lower-income and first-time buyers with down payments as low as 3.5%—cut mortgage premiums in 2015 and 2023. This increased buyers’ purchasing power by a combined 10.5%, according to the American Enterprise Institute’s Ed Pinto. It also pushed up home prices.
‘The feds have also enabled riskier buyers to qualify for bigger mortgages. The Consumer Financial Protection Bureau in 2013 effectively barred lenders from issuing mortgages to those whose total debt payments would exceed 43% of income. Yet the CFPB rule exempted government-backed mortgages.’
…
‘The FHA rolled out a “home retention” plan last winter that covers the late payments of delinquent borrowers and up to 25% of the principal and interest on monthly payments for three years. Not to be outdone, the FHFA in May instructed Fannie and Freddie to extend the duration of mortgages and cut principal and interest payments by 20% for homeowners facing “hardships.” According to Freddie, that includes “reduction in income,” “unemployment” and an “increase in housing expense due to circumstances outside the Borrower’s control (e.g., uninsured losses, increased property taxes, or an HOA special assessment).” No documentation required.
‘In other words, after enabling riskier borrowers to qualify for mortgages they can’t afford, the Biden administration is writing down monthly payments to stop defaults. This is mortgage forgiveness by another name. The FHFA reports some 1.4 million “home retention” actions by lenders since 2021.’
SEC in ‘censorship’ row over study of audit regulation
Bureaucracy favors the large, in this case the Big Four auditors over smaller auditors.
‘The paper highlights criticism of the Public Company Accounting Oversight Board, the US audit regulator that is overseen by the SEC. Small firms complained of delays in getting feedback from the agency, the paper found, indicating the regulator’s inspection regime favoured larger firms such as the Big Four. Smaller auditors did not have the same infrastructure to respond when inspectors found audit flaws, the researchers said.’