The Opportunity Cost of Doing Good

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This article is about the capture of government regulators by those who they are supposed to regulate. It has become so common place today that it does not get much attention. What isn't well known is why it has become more common. Not too long ago, the gap in pay between top regulators and corporate executives was small. As executive pay skyrocketed the gap widened. Top regulators who do not succumb to lobbying efforts may foreclose offers to take executive positions in the companies that they regulate. Therefore, the opportunity cost of doing their job effectively has risen along with the pay gap.