Self Regulation Doesn't Work

[a_unique_person]

http://sunday.ninemsn.com.au/sunday/feature_stories/article_1272.asp



Mr Luttrell said the Law Society dealt with investors very shabbily.

"A lot of people I know that contacted the law society over a number of years found that they got a very poor reception to their complaints and were fobbed off in many instances," he said. "The solicitor was allowed to carry on in business. They did claim to have carried out audits on him, but if they did, I don't know how severe the audits were or how deeply they investigated."

Making matters worse, the Law Society had been promoted as a monitor and back-up for these schemes.

When finally appointed, liquidators identified nearly 40 defaulting loans run by solicitor Paul Triscott, involving millions of dollars and hundreds out-of-pocket small investors. The Queensland Law Society eventually prosecuted Paul Triscott, who was struck off — three years after his schemes went bad.

This week, the Queensland Government announced sweeping reforms to end the flawed system of self-regulation that led to these injustices. The power to investigate complaints against lawyers and to discipline those found guilty of professional misconduct is to be removed from the Queensland Law Society and given to a group of independent bodies.

[subgenius]

Someone said it long ago, "Who guards the guardians?"

(Can't find the source, variously attributed to Shakespeare or Junius.)

[wayrad]

Originally posted by subgenius
Someone said it long ago, "Who guards the guardians?"

(Can't find the source, variously attributed to Shakespeare or Junius.)

Juvenal - "Sed quis custodiet ipsos custodes?":)

[subgenius]

Originally posted by wayrad


Juvenal - "Sed quis custodiet ipsos custodes?":)
Thank you. Its now saved in my favorite quotes.

[shanek]

How is this, in any way at all, "self-regulation"? Self-regulation does not mean you let people get away with fraud.

If true self-regulation doesn't work, then explain UL to me.

[a_unique_person]

Originally posted by shanek
How is this, in any way at all, "self-regulation"? Self-regulation does not mean you let people get away with fraud.

If true self-regulation doesn't work, then explain UL to me.

Complaints were made against a solicitor to the professional body that provided the self regulation. These complaints were just ignored.

I'll explain UL to you if you can tell me what it stands for.

[subgenius]

UL stand for Underwriters Laboratories in this country, just like the Fire Safety Standards that only required clubs with capacities of 300 or more to have sprinkler systems, leading to the Great White disaster. (UL has had a good record, for the record)
No club that had sprinklers has had a death. Not one.
An industry sponsored "regulatory" system ultimately serve's ......?
When the people who are regulated are an integral part of the regulation.....who guards the guardians?
I'm not saying they shouldn't have input.
Health, safety, (which includes, in AUP's example, economic security of the individual) are valid causes for independent review.
No one can serve two masters.
There is a reasonable middle ground.
We will find it.

[shanek]

Originally posted by a_unique_person
I'll explain UL to you if you can tell me what it stands for.

Underwriters Laboratories. The safety seal you see on almost anything electronic you buy. It's a completely voluntary system, and has nothing to do with any government. I've brought them up numerous times in this forum, and their existence is just ignored by those who insist we need government regulation for safety.

[Lemastre]

Originally posted by shanek
Underwriters Laboratories. [. . .] I've brought them up numerous times in this forum, and their existence is just ignored by those who insist we need government regulation for safety. I, and maybe most folks, am not enamored of government regulatory agencies, but I do hope for effective regulation regardless of whether it's provided by public or private agencies. It's my impression that it's easier to get government agencies to do it than it is to get private oversight bodies established. Some enterprising sorts might fiind careers in providing certification and oversight. Or maybe UL could be expanded to cover everything that needs monitoring.

[shanek]

Originally posted by Lemastre
I, and maybe most folks, am not enamored of government regulatory agencies, but I do hope for effective regulation regardless of whether it's provided by public or private agencies.

Fair enough.

It's my impression that it's easier to get government agencies to do it than it is to get private oversight bodies established.

There's no evidence of that. Usually, the problems in setting up a private regulatory agency are due to government restrictions. There's no way, for example, to set up a private drug testing and certification company because the government bans all drugs that are not FDA approved.

[Lemastre]

Originally posted by shanek
Usually, the problems in setting up a private regulatory agency are due to government restrictions. There's no way, for example, to set up a private drug testing and certification company because the government bans all drugs that are not FDA approved. Does requiring FDA approval of a drug mean that no one can offer an alternative source of drug testing? Right now, the alternative to FDA approval is no testing or letting the drug makers do it. Since neither of these approaches is very reassuring, the government does the testing. Perhaps if a firm unaffiliated with drug manufacturing presented a viable plan, Congress could be convinced to assign it the job. If this new entity weren't tax-supported, I suppose the drug makers would be expected to pay for it, which might impact drug prices some.

[shanek]

Originally posted by Lemastre
Does requiring FDA approval of a drug mean that no one can offer an alternative source of drug testing?

Yes. The FDA does not consider any testing that isn't done directly under their aegis.

Right now, the alternative to FDA approval is no testing or letting the drug makers do it. Since neither of these approaches is very reassuring, the government does the testing.

Read this:

http://www.cato.org/pubs/journal/cj5n1/cj5n1-10.pdf [15MB PDF file]

Gierenger concludes that, in the years between 1950 and 1980, 33 people per year would have died had it not been for FDA regulation. However, those same regulations kill 2100-12,000 per year! I don't know what your definition of "reassuring" is, but this doesn't fit mine!

[Lemastre]

Originally posted by shanek
Yes. The FDA does not consider any testing that isn't done directly under their aegis.

Read this:

http://www.cato.org/pubs/journal/cj5n1/cj5n1-10.pdf [15MB PDF file]

Gierenger concludes that, in the years between 1950 and 1980, 33 people per year would have died had it not been for FDA regulation. However, those same regulations kill 2100-12,000 per year! I don't know what your definition of "reassuring" is, but this doesn't fit mine! I'm not saying that what FDA does is always the best possible, but I expect it was intended to be and probably is better than no testing at all. I feel safer using FDA-approved drugs than I would taking untried drugs or those whose manufacturers are the only agencies to vouch for them. Do you believe that FDA has ultimate authority over the structure of drug testing and approval? If it has then what we have is all we can have if FDA decides to prevent any alternative being considered. However, I hope that FDA does not have the final say in this, and that Congress or some superseding office could adopt an alternative if a good one presented itself.

[shanek]

Originally posted by Lemastre
I'm not saying that what FDA does is always the best possible, but I expect it was intended to be and probably is better than no testing at all.

The figures say otherwise. More lives would be saved by no regulation whatsoever, public or private than with the FDA.

Do you believe that FDA has ultimate authority over the structure of drug testing and approval?

In the US, it does; and it also has a lot of influence over Europe and Japan.

If it has then what we have is all we can have if FDA decides to prevent any alternative being considered. However, I hope that FDA does not have the final say in this, and that Congress or some superseding office could adopt an alternative if a good one presented itself.

How's a good one going to present itself if none are allowed to begin with?

[a_unique_person]

Originally posted by shanek
How is this, in any way at all, "self-regulation"? Self-regulation does not mean you let people get away with fraud.

If true self-regulation doesn't work, then explain UL to me.

That is exactly the point, it was self regulation. The solicitors had their own body responsible for handling complaints and ensuring that ethical standards were met. It didn't do that. When it came time to pull someone up for not meeting the required standards, they failed.

[shanek]

Originally posted by a_unique_person
That is exactly the point, it was self regulation. The solicitors had their own body responsible for handling complaints and ensuring that ethical standards were met. It didn't do that. When it came time to pull someone up for not meeting the required standards, they failed.

That's not how the article describes the situation. From reading the article, it's clear that what they did amounted to fraud.

[a_unique_person]

Originally posted by shanek


That's not how the article describes the situation. From reading the article, it's clear that what they did amounted to fraud.

The legal body for complaints about solicitors was their own self regulating one. If some action had ben taken on the complaints, which appear to be numerous, then the subsequent frauds would never have occurred. It is all very well to say we can have him punished by law, they aren't going to get their money back still, as it has all been lost.

[Lemastre]

Originally posted by shanek
The figures say otherwise. More lives would be saved by no regulation whatsoever, public or private than with the FDA. [. . .]How's a good one going to present itself if none are allowed to begin with? I don't have all the numbers you seem to have. How were they arrived at and what are they? As far as testing things is concerned, FDA can't actually prevent labs from existing, because there are a number of them that do various chemical and physical tests. I guess you are saying that FDA can prevent them from trying to supplant any FDA services. Again I say that I wasn't aware that the FDA is so totally bulletproof. I can see where a lab approaching FDA directly with an offer to take over some FDA services might be turned away. This is self-preservation or empire-building or some such corporate instinct. But I have assumed that FDA and all other government agencies can be altered, redirected, or eliminated by Congress and new ones created. If all of government is as immune to change as you suggest FDA is, then there's little point in criticizing government or hoping for much change in it, and anyone proposing changes is probably wasting his time.

Anyway, as regards regulating products and services in general, would you feel safer with properly done government regulation, regulation by the makers and purveyors of things, or no regulation at all? Or have you another alternative? Maybe we should also consider which might be most cost-effective and whether that one would also be safest for the consumer. Offhand, no regulation at all would look like the winner here.

[shanek]

Originally posted by a_unique_person
The legal body for complaints about solicitors was their own self regulating one. If some action had ben taken on the complaints, which appear to be numerous, then the subsequent frauds would never have occurred.

The point is, since they were getting away with fraud, they had no incentive to work properly. It was easier to defraud people. I want to know how on earth you think letting people get away with fraud is a part of self-regulation?

[shanek]

Originally posted by Lemastre
I don't have all the numbers you seem to have. How were they arrived at and what are they?

Well, I gave the numbers themselves. They were made simply by comparing the death rate of the drugs delayed or denied by the FDA to the rate at which drugs delayed by the FDA would have saved lives. For another example, Robert Goldberg of Brandeis University in 1995 calculated that over 200,000 Americans had been killed by FDA delays of medicine that would have saved their lives.

In Europe, the DCB (Device Certifying Body) has a much better track record than the FDA in America. The DCB averages 250 days for medical device approval, compared with the FDA's 820 days. But the DCB is a private regulatory agency, much like UL.

How many actual, real-world examples do I have to find before people start to pay attention?

As far as testing things is concerned, FDA can't actually prevent labs from existing, because there are a number of them that do various chemical and physical tests.

Most of them are doing testing under the aegis of the FDA. You are right that they don't stop independent testing, but it's also true that the independent testing doesn't count as far as approval is concerned. And since it takes on average $1 billion for a pharmaceutical company to go through the FDA approval process, it's understandable that they don't spend even more money on independent testing, especially considering after the FDA's average ten-year delay they only have a couple of years to recoup their costs before the patent expires.

And, of course, the cost of all of this regulation drives up the price of medical care even further.

But I have assumed that FDA and all other government agencies can be altered, redirected, or eliminated by Congress and new ones created.

Yes, but Congress acts very slowly, and based on political, not scientific, merits. Also, Congress is not exactly known for giving up power.

But it can happen. Why do you think I've been advocating the Libertarian Party? They're the only party that's going to do anything towards getting rid of these ridiculous regulations and getting us back on track.

Anyway, as regards regulating products and services in general, would you feel safer with properly done government regulation, regulation by the makers and purveyors of things, or no regulation at all?

Free market regulation, no contest. But if it were between government regulation and no regulation at all, I honestly believe we're safer with no regulation at all.

[Michael Redman]

Originally posted by shanek
Well, I gave the numbers themselves. They were made simply by comparing the death rate of the drugs delayed or denied by the FDA to the rate at which drugs delayed by the FDA would have saved livesWell, then, the numbers are obviously nonsense. They are ignoring all the "drugs" that were never submitted to the FDA because the makers knew that they wouldn't ever be approved. Obviously, with no government regulation, the market would be flooded with snake oil poisons, which this comparison completely ignores. There is no way to know just how much dangerous crap would be marketed if the FDA were abolished, so there can't be any informed claim of the overall numbers of lives affected by the operation of the FDA. We would simply have to take the risk, and see what happens.

[shanek]

Originally posted by Michael Redman
Well, then, the numbers are obviously nonsense. They are ignoring all the "drugs" that were never submitted to the FDA because the makers knew that they wouldn't ever be approved. Obviously, with no government regulation, the market would be flooded with snake oil poisons, which this comparison completely ignores.

Why would a free market corporation want to poison their clientele? This argument has always baffled me.

In the entire history of the FDA's existence, they have only had to forceably recall a drug ONCE—and that was when there was still some controversy over whether or not the drug was actually the cause of the problems. Now, explain that to me!

There is no way to know just how much dangerous crap would be marketed if the FDA were abolished,

Is that all you have, fear tactics?

[Thanz]

Originally posted by shanek


The point is, since they were getting away with fraud, they had no incentive to work properly. It was easier to defraud people. I want to know how on earth you think letting people get away with fraud is a part of self-regulation?

I think that you are missing the point entirely here, possibly due to terminology. In Australia (as in other countries) it appears that the rules that apply to the practice of law are enforced by the Law Society, which is in turn, made up of lawyers. So you have a group of lawyers telling other lawyers what they can/can't do. This is what he means by "self-regulating".

I think that A_U_P's point is that the lawyers who are running the Law Society do not do a good job at policing the profession, as evidenced by the problems here. Letting people get away with fraud should not be part of self-regulation - that is the problem. This is why A_U_P says it didn't work.

[Victor Danilchenko]

shanek

Why would a free market corporation want to poison their clientele?Why do herbal supplement companies release useless, and often dangerous, crap? Some companies have long-term goals -- these will want to keep customers; others are fly-by-night operations with the aim of making a quick buck and getting out. Both are financially (but not necessarily ethically) sound.

You have to stop relying so much on logic disconnected from empirical data. The simple fact is that there are companies peddling snake oil, and they were rather widespread before FDA.

Is that all you have, fear tactics?No, it's a legitimate criticism of the data you rely on.

[Lemastre]

Originally posted by Victor Danilchenko
shanek Why do herbal supplement companies release useless, and often dangerous, crap? Some companies have long-term goals -- these will want to keep customers; others are fly-by-night operations with the aim of making a quick buck and getting out. Both are financially (but not necessarily ethically) sound. It's my impression that most vitamins and herbal supplements are safe if taken in recommended amounts. That doesn't mean they do anything, good or bad, although some can do you damage if you're unusually susceptible to them. They're not regulated in the way prescription drugs are, but the absence of regulation as to content mostly means that the products can contain less than the labeled amounts of active ingredients. This may in fact increase consumer safety. And the amount of ingredient is found to vary from bottle to bottle in some cases.

The most useful piece of information we lack seems to be a scientifically established picture of what these things do and how well they do it. The label on a supplement very carefully makes no mention of why the supplement should be taken. Nor are there double-blind studies of most supplements to establish their value and side effects. Puff pieces in industry-supported magazines and anecdotes from users here and there are relied on by the makers to raise public interest in the products. And you can rely on clerks in health-food stores to steer you to the pill for your symptom.

The FDA should not be asked to add supplements to their responsibilities, however, since they've more than they can handle efficiently already.

[a_unique_person]

Originally posted by Thanz


I think that you are missing the point entirely here, possibly due to terminology. In Australia (as in other countries) it appears that the rules that apply to the practice of law are enforced by the Law Society, which is in turn, made up of lawyers. So you have a group of lawyers telling other lawyers what they can/can't do. This is what he means by "self-regulating".

I think that A_U_P's point is that the lawyers who are running the Law Society do not do a good job at policing the profession, as evidenced by the problems here. Letting people get away with fraud should not be part of self-regulation - that is the problem. This is why A_U_P says it didn't work.

Thank you, I was wondering what was going on.

[shanek]

Originally posted by Victor Danilchenko
Why do herbal supplement companies release useless, and often dangerous, crap?

Because the government passed a law allowing them to do so without fear of reprisal. We've been over that before, Victor.

You have to stop relying so much on logic disconnected from empirical data.

:rolleyes:

[Michael Redman]

Originally posted by shanek
Why would a free market corporation want to poison their clientele? This argument has always baffled me.To make money, obviously.In the entire history of the FDA's existence, they have only had to forceably recall a drug ONCE—and that was when there was still some controversy over whether or not the drug was actually the cause of the problems. Now, explain that to me!Because there was an FDA to prevent the release of bad drugs. Boy, Shanek, this is easy! Besides, we’re talking about whether companies would sell poisons in the absence of the FDA, not despite it.Is that all you have, fear tactics? No! I have history. Before government regulation, there were all sorts of poisons sold as cures. We are now witnessing the exact same thing with "dietary supplements". No regulation, and corporations sell things that hurt people.

Do homeopathic medications work?

Do corporations still sell them?

Why don't you get this?

[Michael Redman]

Originally posted by shanek
Because the government passed a law allowing them to do so without fear of reprisal. No reprisal? :eek:

It is your contention that the market will regulate bad/harmful products out of the market, becasue no one will buy them, and because they will get sues when they hurt people. Therefore, government intervention is not needed.

So, why does the government refraining from regulating dietary suppliments allow their makers to profit in the market from worthless or harmful products? You seem to be contradicting your own position.

[shanek]

Originally posted by Michael Redman
To make money, obviously.

Come on, you can do better than that.

Because there was an FDA to prevent the release of bad drugs. Boy, Shanek, this is easy!

Oh? You're acting like that was the only drug recalled ever! But ONE drug forceably recalled by the FDA over its history, compared to dozens upon dozens of drugs VOLUNTARILY recalled by the pharmaceutical companies for safety fears, AFTER they had been FDA approved?

Yeah, I guess non-answers are easy, but they're not very useful.

Before government regulation, there were all sorts of poisons sold as cures.

There was also only the slightest fraction of medical knowledge that we have now. Come on, you're comparing apples and accordions!

We are now witnessing the exact same thing with "dietary supplements". No regulation, and corporations sell things that hurt people.

No, there's regulation, but the regulation protects them. The law has basically defined them as harmless substances. Why don't you get that?

[shanek]

Originally posted by Michael Redman
So, why does the government refraining from regulating dietary suppliments allow their makers to profit in the market from worthless or harmful products? You seem to be contradicting your own position.

The government isn't just refraining from regulating them—it's actively protecting them!

[chulbert]

Originally posted by shanek
Why would a free market corporation want to poison their clientele? This argument has always baffled me.

Why does this baffle you? Isn't the entire cigarette industry based on a poisonous product? Didn't Ford know the Pinto had a tendancy to explode? If a food establishment is shut down for food safety violations, weren't they probably aware they were doing things wrong?

The concept is simple: The expected cost of litigation or getting "busted" is less than the price of making the product safe.

[Michael Redman]

People don't try to market drugs that they know will not be approved. They might very well market these drugs if they knew there was no approval process. Therefore, we know nothing about what an unregulated market would look like, as far as harmful drugs, from what we see under the current regulatory system.

The fact that the FDA only recalled one drug, even if true, is irrelevant to whether or not companies would sell harmful drugs absent the FDA. (Ignore it all you want, but this is what we're concerned with here.)

Besides, recalling drugs is not the job of the FDA anyway, is it Shanek? Isn't the job of the FDA to reject bad drugs, before they enter the market and hurt people? Why do you completely ignore this, and pretend that recalled drugs matter?

How many bad drugs have failed to be approved by the FDA, and how many drugs have voluntarily not been submitted, because they wouldn't pass? This is the measure of the effectiveness of the FDA, and you haven't even addressed it!

[shanek]

Originally posted by chulbert
Why does this baffle you? Isn't the entire cigarette industry based on a poisonous product?

An inherently poisonous product that people want. And the cigarette companies have gone out of their way to make them as safe as possible. We've discussed this before, too, in other threads.

Didn't Ford know the Pinto had a tendancy to explode?

Yes, but because of the mandated weight and price limits they were powerless to fix it, even though they owned a patent on a safer gas tank.

If a food establishment is shut down for food safety violations, weren't they probably aware they were doing things wrong?

Maybe, maybe not. Many of them are shut down on technicalities that have nothing to do with food safety. And many unsafe establishments continue for a disturbing amount of time (well, we met every regulation! What more can we do?).

[shanek]

Originally posted by Michael Redman
People don't try to market drugs that they know will not be approved. They might very well market these drugs if they knew there was no approval process.

Again, why is the only alternative to a government approval process no approval process? I'm getting tired of this false dichotomy.

The fact that the FDA only recalled one drug, even if true, is irrelevant

Why were all of the other drugs recalled voluntarily?

And I have addressed the best, if not the only, measure of the FDA's effectiveness, that of lives saved. And by that measure, they are abysmal. They kill far, far more than they save. It's not even close.

[Ian Osborne]

Originally posted by shanek
And the cigarette companies have gone out of their way to make them as safe as possible. We've discussed this before, too, in other threads.

Is this before they surpressed studies showing just how dangerous they really are, or after?