On my way out, but here is another one from the pages of the PI.
Exploring the goofiness issue.
M
Sunday, December 21, 2003
Regulating businesses Dean's idea of heaven
JAY AMBROSE
SYNDICATED COLUMNIST
Howard Dean, now assumed to be the leading candidate for the Democratic presidential nomination, has a plan to reregulate American businesses, which raises an interesting question: Is this guy goofy?
Dean says corporations are getting out of hand and that it's time to nail them to the wall, especially those great big media companies and utilities. The government will thereby make people trust our economic system again. Step back from this political chore, he has told reporters, and the ordinary worker suffers.
There is not just a little bit wrong with this line of thinking, but a whole lot wrong with it, starting with the fact that "regulation" is a word meaning that government takes control. It squats on freedoms, which some of us might suppose is antithetical to the basic premises of this land. Sure, some regulation is necessary, but just as surely, most regulations do little good. Taken as a whole, they are economically destructive, and more than that, there is a theory that they can and do kill people.
Dean's fundamental assumption that this country has engaged in deregulation to a disgraceful degree is mistaken. While administrations and Congress have seen fit in recent decades to significantly slacken regulations in such major industries as telecommunications, it is not as if the federal government does not still employ tens of thousands of bureaucrats to enforce hundreds of thousands of rules. The annual cost to businesses is now put at $834 billion a year, and these costs, it should be remembered, are passed on to consumers in higher prices and to workers in lower wages or lost jobs.
The battered manufacturing sector, for example, likely would have many more employees aboard if -- as one economist suggests -- the building of a new factory did not first entail paperwork requirements whose difficulty is roughly on the order of scaling the Empire State Building. Compensations? Well, it would be nice to think there were plenty, but research by some social scientists indicates that a majority of regulations have no measurable beneficial consequences.
In fact, a Harvard study co-authored by a scholar now in the Bush administration concluded that the government could save 60,000 lives a year if it quit plowing money into regulations that were ineffective and instead put the money into programs that really did count for something, such as providing flu shots for all Americans. There is politics, leftist ideology and bureaucratic stubbornness to contend with, though, and while the government reportedly has become somewhat better at conducting cost-benefit analyses, I would not advise holding your breath until government regulates wisely.
I've found mention in articles about another theory to hold in mind when you hear the likes of Howard Dean enthuse over regulations as if they were little pieces of heaven. Reductions in the gross domestic product kill, researchers reportedly say, because some people consequently will have far less money and will encounter the special dangers the poor encounter, such as inadequate medical care. Because regulations reduce gross domestic product, they share responsibility for these deaths.
President Clinton generally adhered to the philosophy of regulating less, as did his two immediate predecessors. If deregulation has had its momentary perils, it has overall benefited the economy. Dean seemed to know as much when he was governor of Vermont. A news story tells us that he ran a regulation-shy, pro-business administration. These days, he seems to think regulation a fine idea, along with other economy-hampering policies.
Maybe Dean genuinely has come to a new conviction about the needs of this country. Voters certainly should suppose he may well follow through if he has a chance, and they should consider a fundamental truth of government, namely, that even well-intentioned programs have unintended and sometimes deadly consequences. The government has enormous power, far more than any corporation, and what it does affects millions of us. Presidential candidates ought to look before they let their mouths do too much leaping, and there was a great deal of evidence for Dean to look at on this issue. The fact that he apparently did not raises another issue, the goofiness issue.
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