Sunday, December 30, 2012

Gun and Bank Regulations

Recently, David Gregory brandished a 30-round magazine on his Sunday TV show as a prop. He knowingly violated a local law that prohibits those clips existing in the district, presumably because he knew he wasn't a real danger to anyone (as opposed to registered gun owners).  They were still talking about it today on the Sunday shows, and I found it amusing that the TV people seemed to think the issue was absurd.  Alas, life is often absurd, especially when tragic.

While it's true that this celebrity was not endangering anyone, to presume that makes a difference highlights the power of laws that often don't make much sense for particular cases. Little laws that entrap those who don't fall under the spirit of the legislation happens all the time. I was pulled into costly litigation that started out by arguing to the court that anything I did related to volatility, cash flow, and mean-variance optimization was verboten via a confidentiality agreement. This was preposterous, but to the court they were tenable accusations, and so started an unconstrained discovery process that was sure to find something (why privacy is important even if you aren't a criminal or prude: give enough data to a motivated adversary and they will find you guilty of something).

Every law, no matter how stupid when applied to something like Gregory's transgression, is based on a principle that can be bandied about, and equality before the law is one such principle. For example in my litigation the judge asked my adversary at various points "what is it you want?" referring to a specific strategy, concept, or algorithm that they might feel is their property. All they had to say was, "We want to protect our intellectual property!" and the judge let it go at that. If you want to use the law to hammer someone, the fact that there's nothing important in the specific application is irrelevant because you can always fall back on some high-minded principle, and you probably won't be challenged on it.  

So, the letter of the law matters quite a bit because most people aren't rich or famous.  There are so many laws regulating your average business that at any time one is probably being broken. This puts everyone at the mercy of their regulator's goodwill, because like David Gregory you will probably get off if the right people are on your side. If they are indifferent you are at the mercy of the mob, government, or wealthy antagonist.  

I'm sure a large complex financial organization like Citigroup is violating some laws all the time given 260k employees operating across the globe working in a highly regulated environment. That's why large financial companies hire people like Bob Rubin, Peter Orszag, or Bill Daley, because they need someone who can get access to those people who can squash an investigation.  

If you have a business worth a decent amount of money the most important priority you have is to get powerful friends and avoid powerful enemies.  The massive number of laws and regulations permits a hook for many to hurt you if they want to.  A better policy solution is to shrink the avenues of injustice by making the law more constrained, giving jerks fewer opportunities to hide small-minded motives behind some grand principle.  A larger set of rules, especially vague ones (eg, Obamacare) simply makes the system more corrupt, because simple things like 'outlawing 20 cartridge magazines' or "mandating more (or less) lending to poor people" creates a situation where people are at the whim of politicians.  

Bad things happen all the time because of vice, which I think is all based in ignorance and an absence of empathy (evil is always some combination of the two). When we try to eliminate bad things via more laws and top-down policies, it just creates a more capricious and unjust world. The solution is not more laws, but fewer.  


Mercury said...

Another way of looking at this is that when practically everything becomes illegal in some way, shape or form (we’re almost there!), selective enforcement will make our system a de-facto dictatorship. People like David Gregory are above certain kinds of laws and either he is assuming this is obvious or he’s rubbing your nose in it.

But what makes this particular performance most odious is that while he’s deriding the suggestion of armed guards at school – he’s sending his kids to a school with armed guards.

Back to your cube pleb. Don’t question your betters.

Anonymous said...

Isn't demagogic posturing by the media protected under the Constitution?

I know he truly cares more than I do, and chances are more than you do.

He should be handcuffed and walked out the front door. If the law makes no distinction between caring demagogs and the poor sop stopped by a trooper between states with a high cap mag in his trunk, locked and unloaded then all should be treated equally, no matter how good their hair is.

Mercury said...

This is probably not a very libertarian argument but one could argue that a shared, universally understood culture (something we probably have less and less of these days) eliminates much of the ignorance and absence of empathy that fosters evil in this context.

I’m fairly confident that if the Japanese eliminated their strict gun control laws it wouldn’t move the needle much on their very low rate of violent crime. Notice how there was approximately zero looting after their recent earthquake disaster.