Regulatory Capture in a Venn Diagram

"Regulatory capture" means this: When you want government to regulate a complex system, you need people who know enough to do the regulating. Politicians and bureaucrats don't know enough, so they hire people from that system to do the regulating. Those people have a natural tendency to favor the system as it is, so they legislate in a way that is favorable to the system as it it. Thus, the system that was to be regulated "captures" the regulatory regime. Here's an example of what it looks like:

This chart of Venn Diagrams (New Year’s Day links) is a nifty visualization[1] that shows how many, many people, through the operations of Washington’s revolving door, have held high-level positions both in the Federal government and in major corporations. To take but one example, the set of all Treasury Secretaries includes Hank Paulson and Bob Rubin, which overlaps with the set of all Goldman Sachs COOs. The overlapping is pervasive. Political scientists and the rest of us have names for such cozy arrangements -- oligarchy, corporatism, fascism, “crony capitalism” -- but one name that doesn’t apply is democracy. On the flip, you’ll find a larger version of the chart (and a discussion of its provenance).

(This shows only Democrats; I guarantee the Republicans are just as bad.) Via Crowd-sourcing the revolving door « naked capitalism.