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Adversarial effects of regulation
sysdesign   3/15/2012 2:15:53 PM

Airlines got deregulated and the prices dropped and the "jet set" disappeared.

Ma Bell got deregulated or de-monopolized and telecom industries grew at a phenomenal rate.

Regulations and regulators have become "police" that are out to punish and fine.  Regulators should be allowed to help small business operate within regulation instead of sending them to expensive lawyers.  OSHA comes and inspect and fine not to help correct.  They are not allowed to advise because it may cause "conflict of interest."   Bbureaucracies should help companies comply and maybe they will learn how to write regulations better. 

We should ask why Steve Jobs said that the "job are not coming back" and analyze why. 

I have done work in China and their bureaucracy was in the importing.  The company I was working with was small and looking to expand in to other markets and capabilities.  Their infrastructurew as limited but what there were was very efficient.  You can get an injection mold made in a much shorter time and at a much lower cost than in the US.  This is CAD/CAM territory where the US is supposed to be good.

I expect that a baker starting out will need to fill out an EPA statement for effluents that come out of baking.  It makes starting small businesses extremely complicated and difficult, Requiring much up front $ and time that is not spent on product development.

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An FDA example
jeffbiss   3/15/2012 1:52:36 PM
Alright here's an example of problem regulation: In "Guidance for Industry, FDA Reviewers and Compliance on Off-The-Shelf Software Use in Medical Devices" (issued on: September 9, 1999) section 1.1 Introduction and Background states:

"Off-the-shelf (OTS) software is commonly being considered for incorporation into medical devices as the use of general purpose computer hardware becomes more prevalent. The use of OTS software in a medical device allows the manufacturer to concentrate on the application software needed to run device-specific functions. However, OTS software intended for general purpose computing may not be appropriate for a given specific use in a medical device. The medical device manufacturer using OTS software generally gives up software life cycle control, but still bears the responsibility for the continued safe and effective performance of the medical device."

One can see the FDA's concern for patient safety in their contention that the manufacturer using OTS SW has no control over that SW. Fine. But in my direct experience, this does not take into account vendor SW that is merely a process on a user's network as the medical device does NOT incorporate OTS SW but lives in it.

The problem here is that modern enterprise system software, such as middle ware, is not dealt with adequately, thus leading vendors astray as to what the FDA requires as they do not see their medical device (a process) as incorporating any OTS SW while the FDA inspectors generally understand that, but use this as the process (the medical device) requires OTS SW to properly function.

Therefore, the problem with certain regulation may be attributable to people not competent in the art developing the regulation or that the regulation is trapped in a bygone era.

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StuDent   3/15/2012 1:36:53 PM
Regulations are necessary.  Without them, we have lead paint on cribs, Standard Oil monopolies, used components sold as new, etc., etc. Two things need to be done about regulations: (1) Periodic reviews of regulations by knowledgeable, multidisciplinary panels to weed out regs that are obsolete, conflicting, favor certain businesses over others, or have after-the-fact negative ramifications. (2) Review how these regulations are implemented.  I have personal experience with regulations granting extra bidding credit to businesses employing verterans, disabled persons, small businesses, minority businesses, etc.  This is okay, but when a small business has to spend a month filling out forms written in legalese in order to bid on an $800 sale, something is radically wrong.  I understand that in an uncertain economy people are more likely to cheat, and that protective documentation is needed, but common sense needs to be put in the driver's seat.

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Encourage R&D
benmlee2   3/15/2012 1:06:53 PM

Get to the root of the problem.

First R&D tax. Tax is a cover up for the real problem. If CEO don't want R&D, you are not going to change his mind with tax. Even if you force the CEO to do R&D, is going to waste. Look at Kodak with digital camera R&D. They were the first. Apple with millions on R&D before Steve. Steve saw them spend all the money, but nothing to show for. Clinton tried that with hybrid. Millions given to auto companies. Is all gone. We are still 10 years behind the Prius. Bush tried again with fuel cell. Millions again, and now is just another footnote.

I worked as an intern for my dad on wind turbines in the 80's. Looked impressive from the freeway. Closer, you see all these broken turbines sewn all over Altamont pass in CA. Every single one had major flaws. They were used as tax shelter. None of them worked. Had a 400lb motor falling hundred feet down to the ground because of fatigue that was not calculated. Oh yeah, nobody bothered to check the nature of wind and how they have constant slight direction change, and large amplitude change. Just stand on top of a mountain, and you will see that.

Corporations are under high pressure from stock holder to generate profit for next quarter, not next year or 5 years. Oil industry and some others are an exception though. You are fighting against market force. People buy and sell stock within hours. Stocks are dumped if they even think the company is going to increase R&D spending.

Our capital gain tax does not take into account how long the stock is held. Change that, and people will hold on to the stock for longer, then they will demand R&D. Then you get real R&D that will be rushed to market. Get to the root cause, reduce tax for the long term stock holder, or some other means to encourage holding to a stock for long term. Stock holder will be interested in long term viability of the company. CEO will get the message loud and clear, then you have meaningful change from within.

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Re: Regs
oldguywithtoys   3/15/2012 12:58:08 PM
I know that as someone with an idea that I'd like to turn into a manufacturing business, I can't afford a cadre of lawyers to study 60,000+ pages of regulations to tell me which ones apply to my business and how to comply.  I can't afford the time to study them myself and if I could, there's so much convoluted legalese that I probably wouldn't understand half of them.  So my business remains a dream, contributing nothing to the economy.

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Re: Regs
AJ2X   3/15/2012 12:46:20 PM
Anytime I hear that "reducing regulation" will create jobs or improve the economy I want to cry out "what regulations, when removed, will do that?"  It's all vague and general, a mantra to keep more careful thinking at bay.  I'm sure there are plenty of conflicting, overlapping, or outdated regulations, and that culling that herd would be helpful in understanding what's required.  Of course doing that is the job of government and its bureaucracy, which some want to reduce substantially also.  As Pogo said, we have met the enemy and it is us.

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Re: Corporate Cash
jeffbiss   3/15/2012 12:44:44 PM

From their arguments they are sitting on that cash so as not to pay taxes on it. If they hold it off-shore they are not taxed. This isn't about improving American society, it's about maximizing their take at the expense of American society as a whole.

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Where are the speifics?
jeffbiss   3/15/2012 12:41:15 PM
The anti-regulation" lament is rarely followed by any examples. The fact is that free market theory has failed absolutely as proven by the existence of financial crises and bubbles as it claims that the freer the market the more accurate the price. The free market has never solved any problems, except rather minor ones with products, without excessive cost.

The problem with this discussion is that it revolves around economic ideology rather than reality. Economics is purported to be a science that explains how we interact with regards to resources, products, and services, when it is generally used as an ideology, such as promoting failed free market theory because we are a society fundamentally Calvinist, which chooses to ignore inconvenient externalities, such as the environmental or health costs simply because most people value money more than the environment or the health and safety of people they don't know.

Does anyone really think that we should eliminate regulation to allow the "market" to decide acceptable consequences? This article should have been written to provide the specifics about which regulations people see as problems rather than what seems an open ended whine.

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Re: Some oversight needed
jeffbiss   3/15/2012 12:22:19 PM

Nope, the correct answer is definitely not eliminating regulation. Regulation is necessary because not all people act responsibly and there is no valid reason to allow the worst among us to act in their interest at the expense of others.

We need regulation to control the worst in human nature and help ensure proper processes are used to produce the best results. The problem with regulation is that economics is treated as the only reality when it is merely a figment of the human mind.

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Re: Regs
oldguywithtoys   3/15/2012 11:45:42 AM
We need less regulation, not total elimination of regulations.  Without regulations, there are all manner of evils that people might do.  However, there are somewhere above sixty thousand pages of federal regulations on the books, with more being added daily.  That seems a bit much.

 Many of the regulations currently on the books have outlived their usefulness.  In other cases, regulations from one government agency contradict those from another.  Many of the regulations were written for specific businesses, by bureaucrats friendly with a specific company, "protecting the people" by giving that company an advantage over its competitors.  Others were written with loopholes so big as to render them ineffective or so ambiguously that their actual intent is a mystery.

We need a thorough, impartial review of existing regulations, eliminating those that have outlived their usefulness, harmonizing those that contradict each other, clarifying ambiguities and culling those that show corporate favoritism.  Further, we need a thorough, impartial review of new regulations, before they are placed into effect, to ensure they do not contradict existing regulations, do not show corporate favoritism, are unambiguous and are understandable by persons without a law degree.

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