White House Chronicle

News Analysis With a Sense of Humor

  • Home
  • King’s Commentaries
  • Random Features
  • Photos
  • Public Speaker
  • WHC Episodes
  • About WHC
  • Carrying Stations
  • ME/CFS Alert
  • Contact Us

The Return of The Regulators

June 3, 2010 by Llewellyn King Leave a Comment

Brace for the return of The Regulators.

Many Democrats and a few Republicans believe that the nation would have been saved many disasters — from the shenanigans of Enron, the financial crimes of Bernie Madoff and the subprime mortgage crisis to the explosion at Massey’s Upper Big Branch coal mine in West Virginia and the BP oil spill in the Gulf of Mexico — if there had been more regulation, or more effective regulation.

A regulation may be passed, but its intent will be evaded unless it accords with the dynamics of the situation. The punishment has to fit the possible crime; otherwise an army of federal nitpickers will be unleashed on the commerce of the nation. The cost of doing business will go up and innovation will be stifled.

Worse, an industry of evasion will be created. The IRS de facto regulates much of the economy and our lives. It also has fathered a compliance/evasion industry that stretches from storefront tax preparers to corporations moving their headquarters to Bermuda and Panama.

When it comes to technical regulation, the result can be inhibiting of effort, stifling of innovation, and can be an excuse to do things in bad old ways because the regulator has blessed those ways. The problem with regulation is that pleasing the regulator becomes a goal in itself, if the regulator is strong and independent. If the regulator is weak, he will be rolled by the regulated, as happened with the U.S. Minerals Management Service.

It has been an act of faith for decades that federal agencies that promote an industry are unqualified to regulate it. The policeman and the criminal are the same person, the argument goes.

But this is worth reexamination.

The Federal Aviation Administration, for example, promotes flying and regulates it. Given that flying is inherently dangerous and yet very safe, it can be concluded that the air traffic control part of the FAA works incredibly well. The supervision of maintenance is more questionable.

Air traffic control deserves a second look. There are dynamics at work which are absent in the government’s control of other endeavors.

A call goes out from an FAA terminal controller like this: Sierra Two-Ninety-Three heavy; turn left, heading two-seven-zero; climb and maintain flight level twenty-two; expect higher in ten minutes.

A great airliner turns west and starts climbing. No questions. No argument.

The flight controller is often someone without a college degree or, nowadays, even a private pilot’s license. The airline captain has college degree, a better pay scale, more social standing and final responsibility for the safety of hundreds of passengers on board the aircraft. Yet the controller and the pilot, while the plane is in the controller’s airspace, dance a sacred tango.

The company would like the pilot to get as direct a routing as air traffic control will allow, and he may request route modification in flight. But economics are mercifully at bay in front of the radar screen and in the cockpit.

So are personalities. Air traffic controllers do not hang out with pilots. It is a perfect intimacy between strangers. One might add that there are no lawyers or consultants in the transaction; just simple purpose, an immaculate coupling.

On an oil rig or down a mine, the dynamic is very different. The regulator is captive to the expertise and veracity of the operator. The workers may resent the interference of an inspector. After all if you have done something safely many times, even if you have cut corners, why not do it again? It will please the chain of command and, on a rig, may hasten your return to shore. People who live in dangerous environments are inured to them.

The first step in safety regulation must be to introduce an ethic of safety as goal. That is easily done in aviation, where the danger is clear and present. When the danger is present but less clear, crafting a safety dynamic is hard. On the other hand, mandating viable cleanup plans should be easy and enforceable.

When it comes to financial regulation, only the statute equivalent of bricks- and-mortar regulation works — laws like the Public Utilities Holding Company Act of 1935 and the Glass-Steagall Act of 1933. You cannot ask regulators to regulate risk among people whose business is taking risk. Just mark off their sandbox.

The present hysteria for more regulation is a blueprint for strangulation. Get the dynamics right, before you unleash the bureaucrats. –For the Hearst-New York Times Syndicate

 

Filed Under: King's Commentaries Tagged With: air traffic control, Federal Aviation Administration, Glass-Steagall Act, Public Utilities Holding Company Act, regulation, U.S. Minerals Management Service

White House Chronicle on Social

  • Facebook
  • Twitter
  • Vimeo
  • YouTube
How Technology Built the British Empire

How Technology Built the British Empire

Llewellyn King

As someone who grew up in the last days of the British Empire, I am often asked how it was that so few people controlled so much of the world for so long? The simple answer is technology underpinned the British Empire, from its tentative beginnings in the 17th century to its global dominance in […]

Make Public Broadcasting Great Again by Shaking It Up

Make Public Broadcasting Great Again by Shaking It Up

Llewellyn King

The animus that has led President Trump to order an end to federal funding of PBS and NPR isn’t new. Public broadcasting has been an irritant to conservatives for a long time. Conservatives say public broadcasters are biased against them, especially PBS; they are a kind of ground zero for all things “woke”; and they […]

California Doctor Opens a New Front in Cancer War

California Doctor Opens a New Front in Cancer War

Llewellyn King

In the world of medicine, immunotherapy is a hot topic. It has uses in the treatment of many fatal diseases, even of aging. Simply, immunotherapy is enhancing and exploiting the body’s natural immune system to fight disease. Think of it as being like a martial art, where you use an opponent’s strength against him. Call it medical Judo. Dr. […]

How Trump and Technology Have Turned the Press Corps From Lions to Hyenas

How Trump and Technology Have Turned the Press Corps From Lions to Hyenas

Llewellyn King

Political messaging isn’t what it used to be. Far from it. It used to be that the front pages of The Washington Post and The New York Times were an agenda for action. This power was feared and used by successive presidents in my time, from Lyndon Johnson to Joe Biden, but not by Donald Trump. […]

Copyright © 2025 · White House Chronicle Theme on Genesis Framework · WordPress · Log in