What Drives the Revolving Door Between the Government and Wall Street?
12th June 2014
A new paper from the Federal Reserve Bank of New York seeks to inject more data into the discussion — and its findings suggest that the revolving door may be driven by an entirely different force. Instead of “regulatory capture,” the paper provides evidence consistent with “regulatory schooling” – the idea that people take regulatory jobs to become experts on complex regulations before cashing in with a private sector job. Instead of having an incentive to go easy on banks, the “regulatory schooling” hypothesis suggests regulators have an incentive to make rules more complex.
Free government training! Just like the military — except that it pays more, and you probably won’t get shot at! What’s not to like?