Federal Regulations Have Made You 75 Percent Poorer

Reason.com? No thanks.

Don said:

I can understand. They strike fear in the hearts of Keynesians everywhere.

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Or self-selecting stories it wants to post instead of holding the entire discussion.

Reading the actual (academic) article, I'm finding some really crass assumptions.

The biggest one is: the market is elastic for any changes in regulation. If we suddenly dropped all our regulation, our income would *that* much higher! Which is absurd thinking.

A more useful tack is to make the assumption that it does not grow or shrink the economy, but changes its shape (which is your argument) which this article does not address.

And I would argue that much of the regulations does not impact growth so much but volatility. You can scream higher in the booms and fall harder in the busts; this is not good for everyone and can result in decreased growth as the more domestically conservative* folks are burnt out.


* domestic = the household

While we're at it we can get rid regulations about murder and rape. After all we can trust people to do neither of those things.

Reason.com is one of those frustrating sources because they're just grossly biased, basically shills for a specific political agenda, but they present as very clean-cut and intelligent and make a lot of noise about being reasoned and whatnot. Hell, they even put it in their title. But they are useless. They are nothing but a talking points megaphone. They are the Huffingtonpost.com of the right. A bunch of parrots mimicking dogs barking. But because of their packaging, they get more credit than they deserve. IMO, of course.

Anyone who claims with certainty anything that includes indefinite words such as "would," "could," or "should", or logically flaws argument forms such as "if/then," is lying to us. Anyone who declares that if Such-n-That were instead This-n-T'other, puppies and ice cream would be the result instead of bugs and poo, is lying to us. They do not know what they claim they do, and they have not figured out what they claim to have figured out. They are playing make-believe. They are pitching their product. They are broadcasting to all of us the speculative, fantasy-league politicking they like to do amongst themselves, and expecting all of us to believe them as if they are experts in anything but spinning tales.

"75% richer" is the kind of rhetoric that snake oil salesmen use to hawk garbage. This elixir will make you 75% more virile, youthful, intelligent, and successful! If everyone did what we think you should all do, you'd be 75% richer! The word for this kind of declaration is "bullshit."

If you look at society today, there is one area where regulations lagged to the point of being nonexistent. That would be in the IT arena - specifically the Internet. The regulations were too late in this case.

In a way, it is the last area where you saw companies hanging out the proverbial shingle and declaring themselves a business. Did it come with the bad since regulations didn't hamper it? Yes. You had the scammers, phishers, viruses, DDoS attacks, trogans, worms, etc. However, from that, business created a solution (vice regulations). You had the increase in an entire industry - compsec (computer security).

However, and this can't be stressed enough, you had the very good. You had an explosion of the information age. Social networking, digital content for music and movies, digital banking, email, etc, etc.

I always wonder what the Internet would look like today if regulations kept pace with the growth. Would it be a far different creature? Would it be less useless? Entire industries have grown from the Internet and advancements have not been stifled from regulations. I can imagine our technology output would have been severely limited if not for the relatively free construct of the Internet.

Thus, I can see the validity of this argument. Oh and I work for the government. In the name of safety and "efficiency" actions that used to cost the government a few hundred dollars about five years ago now cost over $100,000. The sad part of that is the government did it to themselves and were often trying to solve problems with more regulations which really didn't need solving. After being on the inside, so to speak, I have a much greater appreciation for the waste and abuse of these regulations. Many of them are created for no other reason than to justify some civil servant's job.

75% seems like an incredibly exaggerated number.

I used to read Reason daily, but I got bored by it's repetitiveness and lack of original reporting.

Unions are corrupting the government.

Legalize Marijuana.

Regulations are stifling growth.

(probably 50% of their articles)

It's not so much that they're wrong, although they do exaggerate, it's that they completely ignore other issues.
Large corporations are much more influential than unions, yet they never write about corporate corruption.

They also engage in subtle climate denial.

This is something I have first-hand knowledge of, because I worked on regulatory approvals for several years in the wireless industry. Without regulations, your cell phones would not work. An entire industry completely dead. Because a lot of those regulations are technical specifications to insure that a) the devices don't interfere with each other, and b) the devices communicate properly with other devices, and c) you don't have different segments of the industry trying to use the same frequency bands for different purposes.

One of the big problems I have with the whole "regulations are bad" arguments is that they never go beyond that. Which regulations are bad? The anti-regulators never answer that question. I wonder why.

clintl said:

One of the big problems I have with the whole "regulations are bad" arguments is that they never go beyond that. Which regulations are bad?

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Well, to start with, those pesky regulations on power plants. Without government coercion forcing them to regulate emissions, for example, the power companies could be making a lot more money for their shareholders. That money would be invested into the economy, increasing growth.

Plus, thousands of jobs would be created in developing high tech masks and home air filtration systems.

And safety regulations and minimum wage? You know why we can't compete with places like India and China, why our garment industry collapsed?

Because we can't pay workers thirty cents an hour, and are forced to construct factories that won't collapse.

If it weren't for government regulation, all of us would be rich and happy. (Except, perhaps, for those workers)

If only the US was a libertarian paradise, like . . .

Funny, I can think of a single country in the world that is based on libertarian principles. You'd think that since it's such an obviously superior system, bringing freedom and prosperity to all citizens, it would have caught on somewhere by now.

I guess that's because not only are Americans too stupid and blind to appreciate the benefits of the libertarian ideal, so is everyone else in the world.

rugcat said:

Well, to start with, those pesky regulations on power plants. Without government coercion forcing them to regulate emissions, for example, the power companies could be making a lot more money for their shareholders. That money would be invested into the economy, increasing growth.

Plus, thousands of jobs would be created in developing high tech masks and home air filtration systems.

And safety regulations and minimum wage? You know why we can't compete with places like India and China, why our garment industry collapsed?

Because we can't pay workers thirty cents an hour, and are forced to construct factories that won't collapse.

If it weren't for government regulation, all of us would be rich and happy. (Except, perhaps, for those workers)

If only the US was a libertarian paradise, like . . .

Funny, I can think of a single country in the world that is based on libertarian principles. You'd think that since it's such an obviously superior system, bringing freedom and prosperity to all citizens, it would have caught on somewhere by now.

I guess that's because not only are Americans too stupid and blind to appreciate the benefits of the libertarian ideal, so is everyone else in the world.

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Generally, where regulations fail is on the law of unintended consequences. Remember, it's not just federal regulations either. You have regulatory bodies at the federal, state, county, and town levels. Examples? Well, the young girl with the lemonade stand being ticketed for not having the proper license. I am sure that's not what they intended but nonetheless, it's the result.
http://www.cbsnews.com/2100-501370_162-6758706.html

Or how about building a house. There should be regulations to protect homeowners and workers alike. Once again, however, the law of unintended consequences takes over. Here are some examples of that (for a quick read on the article, it discusses how regulations can cause onerous burdens on the small business owner and how some regulations require approval through committees that aren't even in existence).
http://www.nahb.org/news_details.aspx?newsID=15823

Here's the thing about regulations. They are meant to serve a purpose and usually a valid one (note I said usually because some of them do not make sense under any circumstances). However, overlapping and onerous regulations do indeed hurt people and stifle business. Want to know how difficult it is in today's environment? Open a business. Except for something Internet based (which as I said upthread is relatively free of regulations), you will be paying thousands upon thousands of dollars to comply with the various and often expensive regulations.

I love clean water, clean air, safe working environments, safe food, etc. However, you must be honest and admit that both simplification and common sense could go a long ways towards removing the myriad of often confusing regulations.

The law of unintended consequences should never be used as an excuse to do nothing when there's a problem that needs addressing.

southbel said:

Generally, where regulations fail is on the law of unintended consequences.

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Surely there are regulations that are onerous, have unintended consequences, and are just plain stupid. I don't think there is anyone who would dispute that.

The same goes for laws in general.

But the solution is to work to improve the system, to make it better. It will never be perfect; there will always be stupid stuff, but the libertarian goal to get rid of all possible regulations and laws is a solution far worse than the problem.

Remember, lack of regulation has its own unintended consequences. When the banks and financial companies were finally freed from "overly restrictive" regulations, business boomed, and a lot of people made fortunes.

However, the collapse of the self generated bubble (and to a lesser extent of the entire economy) was surely not a consequence any of the proponents of deregulation expected.

There are "unintended consequences" of doing nothing. Some of them can be pretty bad.

rugcat said:

Surely there are regulations that are onerous, have unintended consequences, and are just plain stupid. I don't think there is anyone who would dispute that.

The same goes for laws in general.

But the solution is to work to improve the system, to make it better. It will never be perfect; there will always be stupid stuff, but the libertarian goal to get rid of all possible regulations and laws is a solution far worse than the problem.

Remember, lack of regulation has its own unintended consequences. When the banks and financial companies were finally freed from "overly restrictive" regulations, business boomed, and a lot of people made fortunes.

However, the collapse of the self generated bubble (and to a lesser extent of the entire economy) was surely not a consequence any of the proponents of deregulation expected.

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I've never been drawn to the libertarian philosophy but I am indeed drawn to the less is more when dealing with regulations.

On the housing crisis, I don't believe there's been consensus on the exact cause (some say government intervention and others say deregulation). I personally believe it was a confluence of actions which caused it but that's besides the point. To say that it was regulation alone, however, is not entirely fair either.

There seems to be this pervasive belief that each and every person from birth to death should be free of any risk. This is taking personal decision out of the equation and forcing the government agencies to legislate, either through regulatory bodies or laws themselves, to protect, at all costs, the citizen. Where is the line between life itself having inherent risks and enacting regulations for protecting the worker, consumer, etc? I err on the side of less but I do admit that each and every regulation had an inciting event which led to said regulation. However, I do believe our society has gone too far over to the other side of the equation and the very laws and regulations we initially wanted have managed to create a quagmire of unintended consequences which no one really wanted.

It's not an easy thing as some groups claim (e.g. most libertarians). It's a balance. The question, which far exceeds my capabilities, is how to maintain that balance?

The overall gap in logic with this is remarkable.

It's like saying, "If Uncle Joe hadn't been hit by that train, he'd have lived a long and healthy life." There are far too many people and possibilities involved to make that assumption.

Williebee said:

The overall gap in logic with this is remarkable.

It's like saying, "If Uncle Joe hadn't been hit by that train, he'd have lived a long and healthy life." There are far too many people and possibilities involved to make that assumption.

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Right. Now tell that to the Krugmanites/neo-Keynesians who continue to gush over the Stimulus Bill...and keep asking for even more.

robeiae said:

Right. Now tell that to the Krugmanites/neo-Keynesians who continue to gush over the Stimulus Bill...and keep asking for even more.

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You think they'd listen either?

Probably not.

Wasn't it David Axelrod...an Obama man...who said something to the effect that the federal government is "too vast"?

He may have a point.

I don't understand. The question remains unanswered, does it not?

Don said:

Oh, noes!. You've asked The Question Libertarians Just Can't Answer!

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Here's the article that your link is replying to.

http://www.salon.com/2013/06/04/the_question_libertarians_just_cant_answer/

Anyone interested can read both and decide for themselves which makes a good case and which is bullshit.