18 months after President Obama authorized a program providing $7.6 billion to states to help homeowners escape foreclosure, fund have been awarded to only about 7500 homeowners. In the same time period, banks have foreclosed on 1.5 million homes.

Stories like this one fuel disgust with government. What they really highlight is that we're trying to manage 21st century problems with 19th century methods.

Rather than building a government bureaucracy to award funds, the program should have set goals for number of homeowners whose mortgages would be relieved (or even better, the conditions that would justify loan modification) and left it to the banks to meet those expectations.

The regulatory overhead should have been in testing outcomes, not managing process.

Let me be clear by analogy. Imagine that Google's search quality team wrote a set of rules for sites to be approved for inclusion in Google, and had a bureaucracy to allow sites into search results. Instead, Google tests the quality of search results, and uses algorithmic regulation to remove results that are deemed bogus.

The analogy in this case isn't exact, but the idea of algorithmic regulation is central to all internet platforms, and provides a fruitful area for investigation in the design of 21st century government.
Shared publiclyView activity