Who best understands the oil industry, the media industry and the securities industry? An academic who studies people’s behavior or a well-regarded successful industry participant?

An academic may be very knowledgeable about an industry, but his views of the industry are primarily scrutinized by academics in esoteric academic journals. If he is wrong, he is criticized by his peers. (He cannot lose his job because he probably has tenure.) An industry participant, on the other hand, has his views scrutinized by the marketplace. If he is wrong, he loses his job or a lot of money.

Conflict-of-interest rules that discourage well-regarded, successful industry participants from becoming part of the government do a disservice to this country. It means the people who know the most about how the industry really works and who know the key participants in the industry will not be working for the government.

Conflict-of-interest rules that prohibit people leaving government service from participating in the industries they regulate discourage smart young people from joining government service. It does not give them the opportunity to invest in their careers by taking low-paying government jobs and then leveraging that experience to get well-paying private-sector jobs in the industry they know the best.

Conflict-of-interest rules that prohibit lobbyists with extensive knowledge about their clients’ industry from having direct access to government decisionmakers make the transfer of knowledge to the government inefficient and cumbersome at best.

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