ABSTRACT
Regulatory complications follow industry complexity: Dodd–Frank has reduced the systemic risk of large banks, but its size and intricacy dilutes its effectiveness. The 37-page long Glass–Steagall Act was all the more effective in its brevity. Beyond finance, many of our regulations can see their effectiveness compromised by a convoluted approach, when simpler ones could have a bigger impact. Straightforward instruments used around the world like gasoline or carbon taxes are more effective than complicated CAFE standards, for example, or “cap-and-trade.” When trading with regional blocks, we have promoted trade deals that are also monuments of opacity, far too lengthy, and that very few politicians can understand, let alone the general public. This, added to complex legislating in many areas of our lives, has opened a chasm between our government and many citizens, who no longer believe their interests are being taken to heart. Hence the hunger in many quarters for populist voices, promoting through simple slogans more protectionist policies anchored around tariffs and border-adjusted taxes. Our complex electoral process contributes to the polarization of our political system and makes bi-partisan solutions challenging to find. At risk here is our democracy and what binds us together, an existential threat. We can and should do better. Fortunately, there are statesmen who can still articulate what simple yet effective regulations and legislative efforts should look like. Let’s listen to them.
