And, to top it all off, you cannot find people to work in Washington who have the skill sets you need to understand the stuff that the regulatee throws at you. The financial people cannot compete with Wall Street for financial analysts, the FDA cannot compete with pharma for doctors, and my agency could not compete with industry to get engineers to come to Washington, where housing prices were absurd.

I think the politicians are at the root of all of this trouble, as they interfere to support their favorite political cause. It is not unusual for an agency to receive one letter from Congress, asking why they approved something, in light of “facts” that say they should not, while another Congress-person sends another letter asking why the approval was not done sooner, and with less onerous conditions. It is like having a board of directors with 535 members, none of whom agree on how the business should be run, or even whether the business should be in business.

It will not go away. You have to live with it. And consider the alternative – we once had a system where the entire infrastructure of government, as well as govt policies, changed each time a new President was elected. Modern business could not exist in this sort of environment (it is what happens in third-world countries). You need a stable bureaucracy in place to even our the shifts that the politicians want to make when the power changes hands. The bureaucrats have to be at least somewhat responsive to the politicians, but they cannot change direction 180 degrees on January 20, each four years (or every 2 years!).

It is ironic that Obama has been pushing “change” in his campaign, because that is the message that has been pushed on the government bureaucracy over the past 15 years, since Al Gore started to “re-invent” government. He and his friends in the accounting business, and then the financial friends of the Bush administration, pushed the government to embrace change, and do things more like businesses, taking more risk. Well, the bureaucrats did, and now we have the current financial meltdown.

Those of you on this blog who complain about regulation – do you want the FAA to take more risks in regulating the safety of airlines, or the FDA to take more risks in regulating the drugs you need to stay alive, or the US NRC to take some more risks as it regulates nuclear power plants?

Will a regulatory response to the banking crisis involve the equivalent of people taking off their shoes before boarding planes?

We have that already. It’s called Sarbanes-Oxley.

The problem with letting politicians run the economy, or think they do, is that politicians don’t make economic decisions: they make political decisions that have economic consequences.