Instead of trying to anticipate every potential harm, AI regulation should mandate open, internationally consistent audit trails, similar to financial transaction logs. This shifts the focus from pre-approval to post-hoc accountability, allowing regulators and the public to address harms as they emerge.

A bureaucracy can function like a tumor. It disguises itself from the "immune system" of public accountability by using noble language ("it's for the kids"). It then redirects resources (funding) to ensure its own growth, even if it's harming the larger organism of society.

Treat government programs as experiments. Define success metrics upfront and set a firm deadline. If the program fails to achieve its stated goals by that date, it should be automatically disbanded rather than being given more funding. This enforces accountability.

A regulator who approves a new technology that fails faces immense public backlash and career ruin. Conversely, they receive little glory for a success. This asymmetric risk profile creates a powerful incentive to deny or delay new innovations, preserving the status quo regardless of potential benefits.

Beyond headline-grabbing scandals, the most insidious impact of a kleptocratic administration is its refusal to enforce existing laws, from financial regulations to anti-corruption acts. This quiet dismantling of the legal framework fosters a culture of impunity where bad actors thrive, ultimately harming ordinary people and destabilizing the entire system.

Instead of only using AI to help people comply with complex regulations, its real power lies in helping policymakers simplify them. AI can analyze thousands of pages of rules to identify what is vestigial, conflicting, or redundant, enabling the simplification required for scalable government services.

Regulatory capture is not an abstract problem. It has tangible negative consequences for everyday consumers, such as the elimination of free checking accounts after the Dodd-Frank Act was passed, or rules preventing physicians from opening new hospitals, which stifles competition and drives up costs.

Unlike credit rating agencies which lacked direct financial consequences for bad ratings, this model creates "skin in the game." By structuring as a managing general agent (MGA), the auditor's compensation is tied to the profitability of the insurance policies, creating a powerful incentive to maintain rigorous, honest standards.

The "cost-plus" regulatory model allows utilities to earn a guaranteed return on capital investments (CAPEX) but no margin on operational expenses (OPEX). This creates a powerful, often inefficient, incentive for utilities to solve every problem by building expensive new infrastructure, even when cheaper operational solutions exist.