Red Tape Strikes Back: Regulation-Busting Takes More Than a Hand-Wave


The NewCo Daily: Today’s Top Stories

Craig Sunter | Flickr

It makes a great sound-bite: For every new rule federal regulators under President Trump want to add to the books, they’re going to have to scrap two existing regulations. That’s the gist of an executive order Trump signed Monday — “a big one,” as the president called it — in a move to fulfill a campaign promise to reduce the regulatory burden on American business (The Atlantic).

Sounds fine. But wait a minute: Um, how do you actually count a rule? Is there some standard unit of regulation? Most regulations are complicated and include a lot of different standards, guidelines, and conditions; that complexity is why businesses complain so much about them. Does a particular environmental rule — about, say, coal power-plant emissions — count as one single rule or many? And rules vary immensely in the burden they place on businesses; if you institute one humongous new rule and scrap two trivial ones, what kind of win is that?

Ironically, many experts are saying that Trump’s order is so imprecise and ambiguous it will more than likely increase confusion, make businesses work even harder to figure out what they can and can’t do, and tie the hands of legislators and administrators even when they’re setting out to simplify their rulebooks. The Washington Post: “Trump’s proposal would add a new time-consuming requirement for any new congressional legislation or agency regulation on topics as varied as banking, health care, environment, labor conditions and more.” Instead of cutting red tape, the order is a kind of red-tape force multiplier.

Businesses Scramble For Positions on Trump Immigration Ban

On the first workday since President Trump’s order blocking immigration from seven mostly-Muslim countries came down Friday, the tech industry continued to roil with opposition. Google employees staged a walkout at eight company locations. (The way Google calls its offices “campuses” only underscores the parallel to student protest movements.) Seattle’s two tech giants, Microsoft and Amazon, along with Expedia, are both supporting the Washington State attorney general’s suit against Trump’s policy. Meanwhile, a meeting today at Github in San Francisco will bring together representatives of Silicon Valley firms and other tech companies that want to participate in filing an amicus brief in one of several different legal cases underway against the Trump administration ban order (Reuters).

Outside tech, CEOs were frantically trading phone calls through the weekend trying to figure out how to respond to the Trump policy, according to Andrew Ross Sorkin in The New York Times’ Dealbook. Concerned customers and employees were calling on them to take a stand, but how could you do that without (as one apparently put it) “poking the bear” and unleashing the wrath of Trump on Twitter? Would they face a boycott if they took a stand? Would they face one if they didn’t? Coca-Cola says it opposes the ban; Pepsi has remained silent. (The Times has a good industry-by-industry recap of reactions and non-reactions.) Is this crisis a branding opportunity or a minefield? Probably both.

Will Crowdfunding of Startups Get a Bad Name?

Kickstarter, Patreon, and Indiegogo taught the world how crowdfunding can work for creative projects and artists. But getting the crowd to fund your startup is still a tougher climb, even though the rules have gotten a litte easier to navigate. In the wake of a 2012 law that opened the door to web-based investing in startup equity under certain conditions, a number of companies have raised money under the scheme — but, according to The New York Times’ Nathaniel Popper, many of them have failed to follow the law’s most basic conditions, like having their financial results properly audited or certified. Under the crowdfunding rules, the audits are required, but the Securities and Exchange Commission doesn’t check for compliance. Sites that list investment opportunities are supposed to do the checking — but many of those are failing at that, too.

This market is new and like all such ventures it’s having rollout problems and attracting bottom-feeders. But with few enforcement mechanisms and lots of fast-and-loose operators in the mix, the danger is that it will gain a reputation early on as a place to get fleeced.

AI Ethics Committees Shouldn’t Be Top Secret

The Partnership on AI is an industry consortium — including Amazon, Google, Facebook, IBM, Microsoft, and Apple — aimed at airing ethical issues and problems that are bound to arise as artificial intelligence enters every aspect of our lives. In BackChannel, Jeremy Hsu calls on the organization to resist the corporate secrecy instinct and operate in a more transparent fashion than some previous efforts in this area.

For instance, when Google acquired DeepMind in 2014, the brains behind that groundbreaking company insisted on the formation of an ethics board as a precondition for the deal. But that board has remained undercover ever since — we don’t even know who sits on it.

The new partnership is set to hold its first meeting later this week. Let’s see what kind of public record it chooses to share.

In This Game, You Found a Winning Startup, But Lose Your Soul

Thanks to The Founder, a new game that’s really a kind of satirical conceptual art critiquing the tech industry, you can now start a company, scale up, pivot, and fail fast without ever losing an actual dollar of your own or your investors’ cash (FastCo Design). The Sims-like game created by Francis Tseng definitely has a point of view: The bigger your company gets, the harder it is to innovate, and the further into the future you advance, the more depressingly dehumanizing the technology becomes. It’s like a dystopian-future saga in which you can’t help ending up as the nightmare’s architect.

Tseng conceived the Kickstarter-funded game after some demoralizing experiences of his own in the tech world. You can’t win (keeping your company profitable) without making profound moral compromises. But Tseng says that if he were designing the game from scratch today, he’d build in a way for players to survive without abandoning their values.

If you’re as eager to join this conversation as we are to convene it, please join us at the Shift Forum this February 6–8th in San Francisco. We’ve got a very limited number of seats left, and we expect it to sell out shortly. Because the event is held under Chatham House Rule, you’ll have be present to learn from these extraordinary leaders. Non profit and founder discounts are available. We hope to see you there!

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