22 April 2013 - regulatory capture 3

Jay Scott : Daily Whale : archive : 2013 : 22 April 2013

Another basic for a captured regulatory agency is to mandate inefficiency. You know how sale ads promise that the more you spend the more you save? With a regulated profit margin, the more you waste, the more you earn.

clue:

It’s common for regulators to grant price increases based on how much the regulated business has spent on improving its service, as opposed to how much the business has in fact improved its service.

take oh take this clue away