Andrew Samwick writes about the well-known problem that employers — both private and public — have been underfunding their pension plans for years:

There is nothing inherently wrong with a defined benefit pension plan, but its implementation has been a challenge in both the public and private sectors. It is a promise to pay compensation in the future. To honor that promise responsibly, the plan sponsor needs to fund it adequately in the time interval between when the promise is made and when it is kept. Simply put, that hasn’t been happening in large private sector plans and in most public sector plans. The problems are worse in the public sector because voters don’t pay as much attention to the financial bottom line as shareholders do and because the accounting standards are sharper for private sector plans than public sector plans. For many years, elected officials have been making promises that future (now, near-future) taxpayers are not going to want to keep.

This seems like a problem that really could be solved via privatization: instead of allowing employers to self-fund their pensions, require them to use an outside fund (or funds). An outside fund would insist on contributions being adequate to fund projected payouts since they’re the ones on the hook to make good. No gameplaying tolerated. And as long as there are enough funds out there, competition would keep them from going in the other direction and demanding contributions that are excessive.

What am I missing here? (Aside from the fact that employers wouldn’t like the idea of not being allowed to play games, that is?) A whole swath of regulations would be required to make this work, but surely nothing more complicated than what we already have. Almost anything seems better than allowing employers to decide for themselves what’s adequate and what isn’t.

Matt Yglesias on requirements that businesses provide parking for their customers:

For the millionth time this isn’t something that needs regulating. Land is a valuable commodity. And ability to park one’s car is also valuable. Property owners in any given area are perfectly capable of evaluating what portion of land should be dedicated to parking based on the market demand for parking relative to the demand for other uses of land.

Requirements in cities and suburbs vary, but here in the burbs the general idea behind parking regulations is to make businesses pay for their own externalities instead of fobbing them off on other people. If I provide parking for my customers, and someone opens up next door and decides not to bother, then his customers will take up all my spots. If neither one of us provides enough parking because there’s a neighborhood nearby, then our customers will take up street parking that owners of existing houses have paid for and are accustomed to using. In both cases, there are people who would like to regulate parking in order to make life more convenient and prevent free riding.

Now, if your goal is simply to reduce the amount of parking so that it’s a pain in the ass and people will drive less, that’s fine. It’s a pretty roundabout way of doing it, but whatever. But if your goal is to match parking spaces to cars, then it’s simply not true that property owners are the best judges of how much parking is needed. Like profit maximizers anywhere, they’ll do their best to provide as little parking as possible and instead try to free ride on the parking that other people have already created and paid for.

If there were an efficient way to allow customers to park only in spaces specifically paid for by each business, then property owners could be left alone to determine their own parking requirements. But that’s rarely the case. Thus, regulations.