Matthew Sanders: Unwieldy bureaucracy is crippling the economy

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  • TheProudDuck Newport Beach, CA
    Feb. 1, 2013 2:34 p.m.

    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 known them.

  • TheProudDuck Newport Beach, CA
    Feb. 1, 2013 2:30 p.m.

    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 public benefit.

  • Lagomorph Salt Lake City, UT
    Feb. 1, 2013 10:39 a.m.

    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 branch.

  • Ultra Bob Cottonwood Heights, UT
    Feb. 1, 2013 10:03 a.m.

    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.

  • Mark B Eureka, CA
    Feb. 1, 2013 9:37 a.m.

    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.

  • Hutterite American Fork, UT
    Feb. 1, 2013 8:50 a.m.

    I don't trust business or the people who run it to let it function without bureaucracy.

  • vern001 Castle Rock, CO
    Feb. 1, 2013 7:36 a.m.

    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.

  • Tyler D Meridian, ID
    Feb. 1, 2013 7:25 a.m.

    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.

  • Maudine SLC, UT
    Feb. 1, 2013 6:21 a.m.

    @ 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.

  • UtahBlueDevil Durham, NC
    Feb. 1, 2013 6:08 a.m.

    "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.