The Interventions Will Continue until the Distortions Disappear
This week’s links on bureaucracy.
Farmers, Tractors Block Traffic in Madrid to Protest Competition, Bureaucracy
“Like their European counterparts, Spanish farmers are also protesting against the cumbersome bureaucracy and complex standards imposed by Brussels, and complaining about the low prices at which they have to sell their produce.”
Why Does One Unelected Bureaucrat Get to Decide Credit Card Fees?
The Consumer Financial Protection Bureau has lowered the permitted maximum late payment fee on credit cards from $32 to $8.
“If government rules arbitrarily prevent lenders from recouping the cost of making credit available to poor credit risks — i.e., borrowers who don’t pay on time — they won’t make the loan and there will be no late fees to worry about.”
The poor lose again.
California’s Nationwide EV Coercion
In the State of California, you won’t be able to buy a new gas-powered automobile starting in 2035. They can do this in California because the President has granted them a waiver from the Clean Air Act. Other states have since adopted California’s stance. One issue with bureaucracy is the swinging pendulum of uncertain policy. The Biden administration’s moves come in response to the Trump administration’s own reversal of the Obama administration’s emissions policies. To purchase some certainty, automakers struck deals during the Trump presidency with the California regulator in which they agree to follow California’s mandate “voluntarily” and to not participate in any legal challenges in exchange for eased required quotas on loss-making EV vehicles and concomitant penalties for failure to comply. The trick was that these manufacturers signed the deal before the Biden waiver. When one of them held out until after the election and tried to get the same terms, they were rejected. You can’t buy insurance after the fire.
Scrap Biden’s Electric-Vehicle Rules
https://www.nationalreview.com/2024/03/scrap-bidens-electric-vehicle-rules/
The Biden administration finalized bureaucratic rules to shape the composition of the US auto industry without passing legislation in Congress. It rations the amount of permitted carbon dioxide (on a declining annual basis) generated by fleets sold by auto manufacturers. This attacks the current OEM model of using profitable gas-powered cars and trucks to subsidize the losses on electric vehicles and hybrids. This rule takes place without an adequate national charging network in place or the technology to enable the kind of range American consumers demand, technologies that require the free cash flow of internal combustion vehicle sales to fund.
“These rules are an admission of failure. The internal-combustion engine prevailed without governments banning steam-powered cars, earlier electric vehicles, and, yes, the horse. And however much the administration is claiming that the final version of the rules offers more flexibility than the original proposals (some of which may be illusory, especially as hybrids are concerned), it is still an attempt to bribe and bully manufacturers into making cars they don’t want to make, and consumers into buying cars that they do not want to buy — in sufficient numbers anyway.”
A Novel Way to Catalyse Industrial Decarbonisation
As the carbon price collapses, Germany announces a new subsidy program for investing in decarbonization, taking a page from the US playbook. Regulation, on its own, is not enough.
How Credible Is the Milei Plan?
https://marginalrevolution.com/marginalrevolution/2024/03/how-credible-is-the-milei-plan.html
Milei’s is administering the medicine to Argentina’s economy and the adjustment is painful. Is it sustainable?
Freedom (and Poverty) in Argentina: Milei’s 100 Frenetic Days in Power and an Unprecedented Economic Experiment
If Milei fails, it will be a political failure.
Claudine Gay, Silicon Valley, and Ending DEI Forever
“There is no immutable law that requires bureaucracies to be left-wing. But people within the bureaucracies are cowardly. They can be silenced easily, pushed around easily, and recruited into the dominant ideology without too much trouble. Left-wing activists are brilliant tactically at manipulating guilt and shame, creating status hierarchies and incentives, and using issues (especially of race and sex) to bully and cudgel people into submission.”
How to Regulate Artificial Intelligence
https://www.nationalaffairs.com/publications/detail/how-to-regulate-artificial-intelligence
The Hawley-Blumenthal proposal for regulation of AI includes a provision that creates a liability for the perpetrators of a breach of “privacy, civil rights, or otherwise cognizable harms” as well as the company that manufactured the AI technology should existing laws prove insufficient in addressing these harms.
“This is the equivalent of saying that if I employ my MacBook and Gmail account to defraud people online, Apple and Google can be held liable for my crimes.”
Florida Officials Call Rescue Efforts in Haiti ‘Bureaucratic Mess’
https://www.wflx.com/2024/03/22/florida-officials-call-rescue-efforts-haiti-bureaucratic-mess/
“Guthrie said working with the federal government hasn’t been much smoother. Immigration checks and diplomatic clearances hindered the pace.
“‘We actually had faster success moving people from 5,000 miles away in Israel than we are 500 miles away in Haiti,’ Guthrie said. ‘It's absolutely insane.’”
Our Federal Government Is Bloated with Political Appointees, and that Weakens Democracy
“Many federal departments and agencies have become calcified, with layer upon layer of appointees in the chain of command. The problem is compounded by the entourage of appointees without line responsibility who surround nearly every senior leader. This has created bottlenecks, caused delays in decision-making and made it difficult for critical information to reach the ultimate decision-makers, even when, as is typically the case, the individual appointees are of a very high caliber.”
Bayer CEO: Corporate Bureaucracy Belongs in the 19th Century. Here’s How We’re Fighting It.
With adverse judgments and a weak product pipeline, Bayer can no longer afford bureaucracy.
“However, there’s another sinister force weighing on the company’s strategic options. Bureaucracy has put Bayer in a stranglehold. Our internal rules for employees span 1,362 pages. We have excellent people, with expertise in a range of disciplines and exceptional commitment to our success. But they are trapped in 12 levels of hierarchy, which puts unnecessary distance between our teams, our customers, and our products. There was a time for hierarchical, command-and-control organizations–the 19th century, to be exact, when many workers were illiterate, information traveled at a snail’s pace, and strict adherence to rules offered the competitive advantage of reliability.
“Today, the opposite is true. Our workforce is highly skilled and educated. Communication happens at the speed of light. And today, the most reliable companies are the most dynamic. A company’s value stems from its ability to innovate. In our sectors, that means better medicines for patients, better seeds and supplies for farmers, and better self-care products for consumers. To succeed, we need an environment where people and their ideas can thrive–not be stymied by red tape.”
One CEO’s Radical Fix for Corporate Troubles: Purge the Bosses
“Anderson mapped out his plan last June on a napkin at a cafe in San Diego with a McKinsey consultant who is now a full-time collaborator. The CEO named his idea “dynamic shared ownership.” It has since spawned its own glossary. Leaders are “visionaries,” “architects,” “catalysts” and “coaches,” positions focused on longer-term strategy and guidance-giving.”
A plan to make teams self-directed, sketched out on a napkin with a McKinsey consultant, is the reaction to the Teutonic bureaucracy the CEO inherited. As we said previously, things must be bad in Germany for these kinds of measures to enter the conversation.
“Executives will no longer pass orders to employees only through layers and layers of management, with bosses explaining ‘where exactly you’re going to spend your time and what exactly you’re going to do,’ said Sebastian Guth, president of Bayer U.S. ‘Instead, you will spend time with your 15 to 20 colleagues and basically figure it out.’”