Platt Perspective on Business and Technology

Making regulation work 3: political pressures and their impact

Posted in macroeconomics by Timothy Platt on October 24, 2012

This is my third installment in a series on developing regulatory law and oversight that would work, and with consistency and fairness for all affected stakeholders (see Part 1: predictability and the cost and benefits of regulatory oversight and Part 2: positive and negative regulatory specificity.)

I have been writing in this series about the need for clarity in how regulatory law is written and enacted, and consistency and predictability in how it would be interpreted and enforced, and by regulatory oversight agencies and in the courts. I have written about how these laws are written, with a detailed listing of what should be done, or through specification of what is not permitted and about how both approaches have their strengths and weaknesses. I turn here to consider the challenge of politics and as political forces impact upon developing and enforcing effective, fair, realistic, equitable regulatory law. And I write this for live posting to my blog in the last days before national elections in the United States (on November 6, 2012), and as China faces a major shift in Party and governmental leadership – and with their simply serving as two notable examples of political challenge and change that goes on globally.

Regulatory oversight and law frequently become political footballs leading up to elections and that is certainly the case in the United States leading up to the upcoming Presidential and Congressional elections there. Political discourse over this topic area has its positive virtues insofar as regulatory law has far-reaching and long-term influence and impact and on many levels, from that of the individual citizen and consumer on up to the level of the economy as a whole. So it should be openly discussed, and yes even challenged. The prospect of such discussion and challenge holds potential for bringing unexamined assumptions to light that need discussion and it creates opportunity to identify loopholes and exemptions, or problematical restrictions that might have crept into current or proposed law and that need addressing and remediation. So bringing regulatory oversight into the political arena can be a real positive.

But the politicians and political commentators and news analysts who do this have to be willing to delve into the details, and accurately and fairly and with fact checking and accountability as a part of the ongoing process. And politicians have to be held accountable for when they fail to do so, simply making broadly based but unsubstantiated claims and accusations and failing to validate them with any evidence. And they need to be honest and accurate in what they do say.

Failures in this are too common when regulatory law, and I add important and contentious issues in general enter the political arena. That is what we are witnessing as I write this and certainly in the United States leading up to the November, 2012 national elections. And that is where political use of regulatory law and oversight as a source of debate points becomes divisive and without redeeming or moderating influences or objectives.

We need realistic, fair, well drafted and enacted and enforced regulatory law. But vaguely worded and misleading political bombast will not and cannot help lead us to that. So I find myself facing an internal conflict of opinion here. Part of me would argue that politics and politicians should take regulatory law off the table and simply not discuss it – because they cause confusion and discord to no positive effect when they do discuss it. Part of me would argue that regulatory law should be front and center in the political debate and certainly coming out of the Great Recession and its immediate aftermath and when this is so important a set of issues and for everyone.

I do not see the major political parties or their leadership changing, and I do not see the public discourse that surrounds and shapes the political process becoming more open or factually informative. The Republican presidential candidate this election year actively refuses to share details on how he would fulfill any of his many vaguely worded campaign promises.

I made a conscious and explicit decision early on when writing to this blog that I would not take political positions in my postings and that I would not post political statements. This is one area where I see compelling need to make an exception to that, as who wins in the Presidential and Congressional elections in the United States this year, will have dramatic impact and both for the United States and for the world, and for individuals and their families, businesses and industries and entire economies. And I end this short series with that.

You can find this and related postings at Macroeconomics and Business.

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