The Tipping Point – When the Cost of Rules and Regulations Exceed Their Benefit

Are we really applying common sense to the way we govern, or are we laying the seeds of our own destruction?

The issue here is that free society continually strives to protect the rights of the individual in the belief that if we protect each of us individually, then we protect society against dictators, despots and power seekers. Yet as we pursue this noble and needed goal, we burden ourselves with an ever increasing administrative burden, and ever increasing costs.

In Our Zeal to Protect the Individual, we Don’t Measure the Cost
When economic times are good, these costs seem manageable.

When there is an ever increasing pool of young productive workers providing ever increasing amounts of tax revenue to the government, these costs seem reasonable.

But as the workforce ages, or money and resources become scarcer, as is the case currently, these costs consume far too much of our scarce resources.

What is the Cost /Benefit to Society Compared to the Harm to an Individual?
A wrong occurs, whether minor or major, that catches the public’s attention; calls come insisting that government take action to prevent a similar wrong in the future, and the scenario described occurs.

The government reacts and In due course there is another bureaucracy to administer the possibility that the wrong may occur again, and the costs of this administration, including the pensions for the administrators are permanently in place – forever.

A Way to Judge the Benefit Against the Cost
Wouldn’t it be nice to have a template prepared so that every time someone proposed a new rule or a new protection, there would automatically be a calculation of the true lifetime cost of that proposal.

Wouldn’t it be nice if the true cost were known, not just the annual cost? True cost includes lifetime benefits to all the people engaged in protecting us against that particular malfeasance occurring again?

Wouldn’t it be nice if – before the proposed changes were instituted, that cost was made know to all? In this way, the outcriers for the new rules and those onlookers could compare the true cost of the current harm done to someone against the true cost of preventing that occurrence in the future.

More Criteria
If we knew the true cost, we could then apply other simple criteria. For example, “How assured are we that these new rules can work universally as we expect them to, or will they only work in isolated and specific circumstances?”

“Will the new rules create more opportunity for intelligent people to take advantage of the new rules to beat the system in new ways?” You would be amazed to see how often this occurs and with stunning regularity.

The Right of the People
It is time to start stop naively applying the supposed rights of the individual to every circumstance and to every violation.

The principle of the rights of the individual in our society must take into account the cost to every member of society of new rules to protect isolated members of society, or isolated incidents within society.

Rights and Freedoms
The principles under which we live must be sacred and inalienable, but they must be so because of our beliefs and our morals. Violators should be looked upon with disgust and abhorrence.

The problem is that our society promotes wrongdoers by aggrandizing them, by buying their books, by making movies about their deeds, by putting them on reality TV. People are people and this fascination is a fact that will not change.

What we can do however, is to do away with the need to regulate every possible wrongdoing, and at the same time make profits earned directly or indirectly from wrongdoing, confiscateable to the state.

Cost / Benefit
Giving onlookers the ability to judge the cost of rules as compared to the cost of the offense, would put an entirely different spin on these matters. In most cases, if we truly believe someone has been harmed, it would be far less expensive and far more beneficial to simply issue a cheque from government to the party harmed for the estimate of the loss.

The Social Media
A revolution has occurred: wrongs or misdeeds, or scandals, or interesting violations, or anything of interest now spreads across Twitter, Facebook, Linked In, and all the rest of the social media with blazing speed.

Social unrest in the Mid East is tracked and promoted by the social media. Protests against tyrants, flotillas against blockades, news of violations of human rights spreads with blazing speed.

We No Longer Need all of This Profusion of Rules and Regulations.
Social media is truly the will of the people, is far more instant, doesn’t force future generations of our children to bear the cost of our attempted regulations, and bears greater waste and prestige with every passing hour.

We simply have to 1) shame transgressors by immediately publicizing them; 2) consider them in our hearts as less than desirable people; and 3) pass encompassing laws that force transgressors of all misdeeds to surrender all earnings from their transgressions to the state.

By Larry Cyna

Mr. Cyna is an accomplished investor in the Canadian public markets for over 20 years, and has managed significant portfolios. He is a financing specialist for private and public companies, and has expertise in real estate and debt obligations. He has assisted private companies accessing the public markets, has been a founding director of public companies and continues as a strategic consultant to selected clientele. He is and has been a director, a senior officer and on the Advisory Board of a number of TSX and TSXV public companies in the mining, resource, technology and telecommunications sectors, and the Founding Director of two CPC’s with qualifying transactions in mining and minerals. He was an honorary director of the Rotman School of Management MBA IMC program, has completed the Canadian Securities Institute Canadian Securities Course & Institute Conduct and Practices Handbook Course, was a former Manager under contract to an Investment Manager at BMO Nesbitt Burns, a roster mediator under the Ontario Mandatory Mediation Program, Toronto, a member of the Institute of Corporate Directors of Ontario, a member of the Upper Canada Dispute Resolution Group, and the Ontario Bar Association, Alternate Dispute Resolution section. He obtained his designation as a Chartered Accountant in Ontario in 1971 and was the recipient of the Founder’s Prize for academic achievement together with a cash reward. He became a CPA in the State of Illinois, USA in 1999 under IQEX with a grade of 92%. He is a Member of the Institute of Chartered Accountants of Ontario and the Canadian Institute of Chartered Accountants. He holds certificates in Advanced ADR & in Civil Justice in Ontario, Faculty of Law, University of Windsor, certificate in Dispute Resolution from the Ontario Institute of Chartered Accountants. Previous accomplishments are Manager of Cymor Risk Consultants LP specializing in Risk Management Assessment; CEO of Cyna & Associates specializing in mediation and ADR; Founder & Senior Partner of Cyna & Co, Chartered Accountants, a fully licensed and accredited public accountancy firm with international affiliations; and was a partner in a large public accountancy firm. Mr. Cyna is well known in the Canadian Investing community. He is invited to, and attends presentations given by public companies usually 3 or 4 times each week. These presentations are intended by the various hosting companies to present their inside story to sophisticated parties and Investment Managers for the purpose of attracting funding, or of making parties more interested in acquiring shares of those companies. Being a part of this keeps Mr. Cyna deeply involved in the current market and leads to numerous investment opportunities.

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