Regulatory Infrastructure for the 21st Century — presented while the meltdown was still happening
This is Jonathan Hare's account, with its provenance shown. The person or organization named has not yet claimed or corrected it.
In December 2008, weeks after the election and while the financial crisis was still unfolding, Jonathan Hare presented to the Obama presidential transition team on the subject Regulatory Infrastructure for the 21st Century.
The meeting was with Reed Hundt — former chairman of the Federal Communications Commission, and the transition lead for what were referred to as the money agencies: Treasury, the SEC, the FDIC and the rest — together with a full team, drawn mostly from McKinsey and Goldman Sachs.
He was introduced by John Clippinger, then director of the Berkman Center for Internet & Society at Harvard.
The single most useful thing said in that meeting was said by the people objecting to him. Asked to accept transparency into underlying assets, the Goldman participants asked where their margins would go — correctly identifying that the informational asymmetry is the margin.
Each entry below carries its own provenance — the source, and how it was processed. That is the condition on which this graph can be extended by anyone without degrading.
The trail exists so that people who were there can reconstruct their own memories, recognize what they helped incubate, and add to or correct the record — or forward the few pages that belong to someone they know.
That the trust network Resilient Network Systems was building could prevent a repeat of the collapse then in progress.
The argument is the one this record makes throughout, arriving eight years before the patent priority. The 2008 crisis was not primarily a failure of regulation. It was a failure of verification. Nobody could establish, across institutional boundaries and in time to matter, what was actually inside an instrument, who else was exposed to it, or whether a counterparty's stated position was its real one. Regulators had authority and no visibility. Institutions had visibility into their own books and no way to see anyone else's without disclosing their own.
Adding rules to a system that cannot see itself produces more rules and the same blindness. What was needed was a substrate in which a claim could be verified without the underlying position being revealed — which is what Resilient was building, and what the architecture now generalizes.
Hare's position was that the only way to avoid another meltdown is transparency into the assets underlying these instruments, and he set out how the architecture could deliver it.
The Goldman Sachs people in the room raised an objection. Not that it was technically infeasible, and not that it would fail to work. Their objection was:
“Wait a minute. If that happens, where do our margins go?”
Because their superior visibility into the valuation of underlying assets is the margin. It is not incidental to the business — it is literally how the business makes money.
Hare's answer: that is not my problem. If you want to avoid another financial catastrophe, you are going to have to give up those margins and find another way to earn a living.
They did not adopt his approach.
Mostly McKinsey and Goldman Sachs. Which is to say: the people assembling the response to the crisis were drawn largely from the institutions the crisis had run through.
Hare records that without editorial comment beyond the observation itself. It is a fact about how the response was staffed, and it belongs alongside the argument he was making — that the failure was structural rather than a matter of insufficient oversight by insufficiently clever people.
It is a dated instance of the central claim being presented to the people responsible for the alternative, at the moment the alternative was most obviously failing, eight years before the patent priority and eighteen before this record.
Nothing followed from it, and the room said why. The response that was built was Dodd-Frank: more reporting, more capital requirements, more supervisory authority. All of it applied on top of a system that still cannot verify across its own boundaries without disclosure — and none of it touching the informational rent that had been named out loud as the reason the alternative was unwelcome.
Whether Hare was right is a question the next crisis will settle. That he said it then, to them, is checkable — and there is a witness and an email trail.
This is not a recollection standing on its own.
John Clippinger was in the room. He made the introduction and attended, and he is living and reachable.
And there is a documentary trail. Hare has email threads going back to that 2008 meeting — which he still forwards — together with threads from similar episodes since. He has told the story, by his own count, hundreds of times around Washington across eighteen years.
That combination is what separates this entry from most of the record: a dated meeting, a named participant who can confirm or correct it, and contemporaneous correspondence. The specific quotation is Hare's memory. That the meeting happened, who convened it, who was there and what was argued is checkable.
There is no single root. This is one view of the graph, from this node — what you see depends on where you enter and what you are looking for.
FCC chairman, then transition lead for the money agencies
Open →who made the introductionBerkman Center, the 1999 commission — and a witness in the room in 2008
Open →what he was presentingThe trust network, and the intelligence years
Open →the same problem, in healthcareThe identity paradox, in healthcare
Open →the structural argumentRemove the informational rent and the crime has nothing to steal
Open →the same argument, carried into deploymentIRS Chief Technology Officer — who sponsored the deployment
Open →Everything above is a distillation. The primary source is published in full, so that any claim on this page can be walked back to what was actually said — and where the two differ, the source governs.
This entry is deliberately incomplete. The gaps below are the things only certain people can settle — and settling one is a contribution like any other: recorded, timestamped and attributed to whoever made it.
Correct anything wrong, add what only you know, or claim this entry as your own. Write to evidence@qpncatalyst.io and Jonathan directly (both are on the button) — a timestamped confirmation comes back with your submission attached, as your own independent record. No account, no permission, no institutional standing required.
Public contributions earn Publicity Premium; bringing others who were there earns Cascade Premium. Everything is valued retrospectively as outcomes verify, so nothing has to be priced up front.
Correct this entry → Add a story, photo or link → Browse the graph →