Lagomorph, one problem is that the United States -- unlike virtually all of its
international competitors, including the supposedly "socialist"
Scandinavian countries (which are actually more free-market than *we* are, now
that they've liberalized and we've bureaucratized) -- has a horribly
unwieldy and irrational regulatory regime, layered *on top of* the world's
costliest and most plaintiff-friendly tort system. We have two redundant layers
of protection against harm, either of which alone is more cumbersome than it
needs to be. Ironically, "regulation" can lead to a false
sense of security. The financial industry, for instance, is one of the most
strictly regulated industries in the universe. It *still* blew up -- because in
the race between underpaid G-10s writing regulations versus the $800/hour
corporate lawyers structuring transactions around them, who do you think's
going to win?And so we had idiot borrowers thinking "duh, they
wouldn't loan me this money if they didn't think I could pay it
back," when they should have been asking *themselves* if they could pay it
back. The loan terms really weren't that obscure; any fool should have
There are regulations, and then there are regulations. Typically, liberals tend
to frame the argument in terms of "lots of regulations" versus "no
regulations." The sensible middle ground -- just the right amount of
regulation -- gets ignored.The problem is that there is no serious
effort by government to ensure that a regulation yields more public benefit than
it costs those on whom it is imposed. That asymmetry is irrational, and results
in society as a whole being less well off.We require there to be an
environmental impact analysis done before certain projects are undertaken, to
make sure that a project with a private benefit, doesn't impose greater
costs on everyone else. This should also be done with regulations: There
should be an Economic Impact Analysis requirement, to make sure that we
aren't imposing $100 of costs on the regulated, in order to obtain $10 of
There used to be an insulation company that ran ads saying you pay for
insulation whether you have it or not. The same could be said for regulations.
You pay if you don't have them in the form of diminished health, injuries,
and other ways. A certain amount of regulation is necessary to maintain quality
of life-- even Mitt Romney acknowledged this in the second presidential debate.
While there can be regulatory overreach, it seems many conservative commentators
tend to lump all regulations together as bad, regardless of merit.The alternative to having regulations is to handle all damages through the
tort system. This might be doable for something like E. coli contamination from
tainted spinach, where a specific harm (illness or death) could be traced back
to a particular supplier, but it becomes vastly less tenable as the linkage
between source and effect becomes more diffuse, say, a death from smog from
SLC's inversions. Who are you going to sue, every car owner in the valley?
If critics of regulations want to eliminate them and turn to torts, then all
they are doing is shifting the costs from the executive branch to the judicial
The notion that the government itself is a greedy, profit seeking, organization
that puts itself above the general welfare of it’s citizens, is a phony
propaganda tool of those who want freedom to act in unfair and criminal ways.
The proper reason for government regulations is the protection of
the little people from their internal enemies who would take their wealth
without providing the proper goods and services. It is our Constitution that
brought that reason to the fore. Another reason is that given the
power to control our government, business and it’s greedy parents use
government regulations in the competition with competing business operations.
Because of the great financial power of business, this reason sometimes
overshadows the proper reason. So to avoid an all-out war with
other corporations, the strategy is to remove all the regulations using the
false notion that regulations are bad. The real loser from this strategy is the
general welfare of people.
Let's hear from Matt about what happens (or HAS happened) when there is
inadequate regulation. Our food, water, pensions, mortgages, working conditions,
traveling safety, and general product quality all come into play here. It's
not just jobs.
I don't trust business or the people who run it to let it function without
I'm surprised that there wasn't a word in this piece about the reason
for the regulations. Might it be to ensure that the food we're eating and
the water we're drinking are clean and healthy? Could it be that the
financial services industry nearly brought this country--indeed the world--to
its knees because of complex and largely unregulated financial products like
derivatives, labeled "financial weapons of mass destruction" by Warren
Buffett back in 2003? Could it be that predatory lenders managed to convince
naive and unsophisticated home buyers to take on loans they wouldn't be
able to pay for when interest rates reset?Sure, there is a cost to
regulations. But there is an enormous cost to society when we let capitalism go
unchecked.Next time, it might be nice if the Deseret News tried to
show both sides of the story.
Please refer to comments under "Matthew Sanders: Six things you should know
about the costs of federal regulation" as it is the identical printed
printed a day earlier.The points made in this story are all valid
but there are salient counterpoints that should also be considered as well.
@ DesNews: Really? You're running the same story from yesterday with a
different headline - do you not have anything else for the opinion section?As for regulations - there is a reason we have them. Namely, some
businesses cannot be trusted to do the right thing. Regulation protect both
consumers and good businesses from the bad businesses.
"f the old adage holds true, that "time is money" then when
regulations cost time, they cost jobs." would love to see this
economic model where capitalist driven businesses would take their windfall and
automatically transfer that lower cost of doing business into more jobs. This
completely ignores the demand side. For many to most products, demand is
finite. Less regulation on the production side does not equate to increased
demand. Most industries, given the constraints of demand, would not
turn a profits windfall into jobs - that money would flow to the bottom line.
This notion that less regulation equates to a higher demand curve is a fiction
of neoconservatives minds. There are many other constraints on demand.
Deregulation does not, even in most cases, drive demand.The idea
that bureaucracy is crippling the economy is a popular neocon idea. ANd yet
there are models that show that consumer confidence in products also drives
demand - vis a vie - epa and fda reeducation. A perceived "safe"
product has a much higher demand curve. Take cars as an example - the corollary
is clear. The notion the deregulated products have a higher demand
curves - therefor driving jobs - is pure fiction.