Who regulates the regulators? We need to go beyond review-and-approval • Hacker News Board

Re: Who regulates the regulators? We need to go beyond review-and-approval

#101

Post by doctor_eval » Mon, May 08, 2023, 12:34 PM UTC

Camouflager wrote: post #100

doctor_eval wrote: post #94

Earlier quoted context omitted.

This makes no sense to me. Lives get better through many factors. Better knowledge. Better medicine. Better education. Better products. Greater shared wealth. And, ideally, better regulation. I do not vote for governments who allow companies to sell dangerous goods to unsuspecting people for profit. By all means let them sell dangerous products to informed people who know and accept the risks (I’m looking at you, Bla…

Great, now I got flagged. Someone is trying to regulate my words, because they feel uncomfortable. Funny I just predicted exactly that. The comment became recursive. Just like the self-fulfilling recursive personality structure of a narcissist.

For the record, it wasn’t me.

Irony alert.

Re: Who regulates the regulators? We need to go beyond review-and-approval

#102

Post by aero142 » Mon, May 08, 2023, 4:06 PM UTC

harimau777 wrote: post #77

aero142 wrote: post #22

Earlier quoted context omitted.

There is an issue with correlated vs uncorrelated risks. This is the reason that only the federal government can offer FDIC insurance for banks and disaster insurance in Florida. When banks fail, they tend to all fail at the same time and there is no insurer that could hold enough reserves to actually pay out if they all fail together. Private insurance can cover fire insurance for homes, but is unlikely to have enou…

To make sure that I'm following, is what you are saying that the risk is that there's a big enough disaster that the insurance company(s) can't pay everything that's owed to those who have been harmed?

Correct. I'm saying that private insurance is good at insuring uncorrelated risks, like car wrecks, but usually, only the federal government can enable insuring correlated risks. Suggesting that mandatory liability insurance can a good policy alternative to regulation is correct, but if you are regulating something large enough with correlated risks, only the federal government can every really provide insurance. Banks pay FDIC insurance, and bank failures are usually covered by this, but it's pretty clear that the pool of money to save banks is backstopped by the federal government in case of a cascading failure. Even for uncorrelated risk, if the payout event is bad enough, it can't be insured. For example, insurance on a nuclear plant is backstopped by the federal government, because no private insurer could ever really insure the worst case scenario.

Re: Who regulates the regulators? We need to go beyond review-and-approval

#103

Post by jacobr1 » Mon, May 08, 2023, 8:06 PM UTC

robertlagrant wrote: post #98

AnthonyMouse wrote: post #88

Earlier quoted context omitted.

You multiply the cost of prevention by the risk of a crash and see if it exceeds the cost of a crash. Some plane crashes can be prevented with a $0.30 warning light. Preventing those plane crashes is optimal. Some plane crashes can only be prevented by permanently grounding all planes, because they'll be caused by a confluence of improbable events. Trying to mitigate every implausible circumstance that could potentia…

Ah - so the measure is cost? I suppose you could let the market decide, and just have airlines publish their failure rates, and more process means a higher ticket price. But it's a bit grisly.

It is grisly, but the role the government has here is in setting reasonable liability numbers for a life, currently somewhere near $750K on average in the USA. On top of that there are putative penalties (sometimes including criminal) for negligence beyond current accepted standards.

> I suppose you could let the market decide

People think of the market as just involving the principles, but in practice you actually get a ecosystem of controls, between insurance companies, vendors setting standards beyond the normal risk of consumer litigation. The tradeoff is really one of how many specific procedures are specified top-down by government, or required by your insurance company (which may in-turn require something like third-party certification). In-practice plenty of the private regulatory regimes can provide just as much protection, or even better protection for the public as governmental review. They can also be worse. But they do tend to be nimbler, and also tend to leave more room for experiments and risk takers on the margin.

Re: Who regulates the regulators? We need to go beyond review-and-approval

#104

Post by Camouflager » Tue, May 09, 2023, 1:33 AM UTC

doctor_eval wrote: post #101

Camouflager wrote: post #100

Earlier quoted context omitted.

Great, now I got flagged. Someone is trying to regulate my words, because they feel uncomfortable. Funny I just predicted exactly that. The comment became recursive. Just like the self-fulfilling recursive personality structure of a narcissist.

For the record, it wasn’t me. Irony alert.

Not getting it. It's not about you anyway.

Re: Who regulates the regulators? We need to go beyond review-and-approval

#105

Post by rtkwe » Tue, May 09, 2023, 1:41 PM UTC

pitaj wrote: post #41

rtkwe wrote: post #37

Earlier quoted context omitted.

I see this all the time but it seems every time we go through a round of regulation trimming based on that premise we see the industry in question suffering issues within a couple years, and the cycle seems to just keep getting tighter. The 90s/early 00s cut back banking regulation and then we had the 08 crash. Trump rolled back some rail regulations and now we've got serious incidents happening there. Of course busi…

> The 90s/early 00s cut back banking regulation and then we had the 08 crash. Little to no evidence that the deregulation was the cause > Trump rolled back some rail regulations and now we've got serious incidents happening there. Derailments have increased recently but are still lower than they were in 2000.

> Derailments have increased recently but are still lower than they were in 2000.

So we've regressed approximately two entire decades in rail safety. I'd say that's an L...