Time to Start over on Deferred Compensation‪.‬

A law school dean once asked me to suggest a restaurant for a dinner meeting. I named a place, but told him that we could go somewhere else if he objected to northern Italian cuisine. "In my book," he replied, "anyone who objects to northern Italian should start over." That struck me as surely right: Not liking northern Italian food must be as good an indication as any that you have made too many wrong turns and that you might as well put all your efforts down as a failure. Government regulators would do well to follow simple heuristics like that. Writing good regulations--"good" in the sense of promoting the public interest--always presents challenges. Regulators must hit a small but important target where private conduct is brought within appropriate government control, but unnecessary compliance burdens and other deadweight costs are minimized. Even if they see the government's objectives clearly, regulators often have only a limited understanding of the underlying private activities. Moreover, regulators may be unaware of how their rules disrupt or distort those activities in socially harmful ways.