It's Normal for Regulators to Get Captured

I’m in Chicago this week, preparing to give a seminar on covering the policy process at the Institute for Politics. So I don’t have much time to write about the secret Fed tapes that were released by "This American Life" last week. But I do want to make one point: This is not surprising. It’s normal.

Academics call it “regulatory capture,” the process by which the regulators who are put in place to tame the wild beasts of business instead become tools of the corporations they regulate, especially large incumbents. The important thing to understand is that regulatory capture is not some horrid aberration; it is closer to the natural state of a regulatory body. There are a lot of reasons for this, but here are the highlights: