Conservatives whine that regulations hurt business and erode individual liberty.
Their complaints are a combination of exaggeration and cover for their quest for smaller government
It has been the sacred mantra of conservatives – American businesses and individuals are victims of excessive government regulation. It stifles business development; it obstructs job creation; and intrudes on individual liberty.
At any rate, that is the contention – but in many ways it is open to debate. Indeed, you could make a strong case for our nation being under-regulated, or at least poorly regulated. And those who expound the issue of over-regulation seem to have amnesia when it comes to revisiting the events of just the past year or two.
The oil spill
Which regulator oversees the oil industry? It is the Department of Interior's Minerals Management Service, an agency that has had a spotty record of weak regulation over the past few years. For many years, the agency was noted for becoming too “cozy” with oil and gas companies. Additionally, MMS has been beset by ethical transgressions. A major scandal involved sex, drugs and (quite literally) sleeping with the very industry it was regulating.
According to an audit by the Government Accountability Office, the regulator has clearly not over regulated offshore drilling and the risks involved. So much for regulating oil companies.
FDA
So, how do you like your eggs? I like mine safe! Do those who complain about Food and Drug regulation remember the egg recall just last year (how quickly we forget)? An Iowa company had a nationwide recall of 380 million eggs after some of its facilities were linked to an outbreak of salmonella that sickened hundreds of people across the country. The outbreak, which federal officials said was the largest of its type related to eggs in years, began in May 2010, just weeks before new government safety rules went into effect that were intended to greatly reduce the risk of salmonella in eggs. Federal regulators have grappled with the problem of salmonella in eggs since it first emerged in the 1980s. But proposals to improve regulations were largely unsuccessful until a year ago, when the Food and Drug Administration announced a new set of rules, which became effective on July 9, 2010 (and none too soon).
The company behind the recall, Wright County Egg, of Galt, Iowa, is owned by Jack DeCoster, who has had run-ins with regulators over poor or unsafe working conditions, environmental violations, and the harassment of workers and the hiring of illegal immigrants.
Of course the FDA also is also charged with regulating (protecting) our drug supply. This month alone there are 18 cases of drug products on the FDA recall or watch list. A recall is when a product is removed from the market because it is either defective or potentially harmful. Included on the list are products contaminated with bacteria, staph, salmonella, particulates…well you get the idea. As for me, I am comforted that the FDA is regulating my drugs and food supply; for those who feel you are over-regulated, be careful what you ask for.
Mine disaster
How quickly we forget. Again, last year, the Massey Energy’s Upper Big Branch mine killed 29 in the country’s worst mine disaster in four decades. In 2008, the Aracoma Coal Company, a subsidiary of Massey, agreed to pay $4.2 million in criminal fines and civil penalties and to plead guilty to several safety violations related to that fire. This week’s blast comes after a year in which the Upper Big Branch mine had repeated problems with methane buildups. Since April 2009, federal regulators have cited the mine eight times for “substantial” violations relating to the mine’s methane control plans, according to the records. Over-regulation? Tell that to the families of the dead miners.
Nuclear power
Just this month the Associated Press reported: “Federal regulators have been working closely with the nuclear power industry to keep the nation's aging reactors operating within safety standards by repeatedly weakening those standards, or simply failing to enforce them.
“Time after time, officials at the U.S. Nuclear Regulatory Commission have decided that original regulations were too strict, arguing that safety margins could be eased without peril, according to records and interviews.
“The result? Rising fears that these accommodations by the NRC are significantly undermining safety — and inching the reactors closer to an accident that could harm the public and jeopardize the future of nuclear power in the United States.
“Examples abound. When valves leaked, more leakage was allowed — up to 20 times the original limit. When rampant cracking caused radioactive leaks from steam generator tubing, an easier test of the tubes was devised, so plants could meet standards. Failed cables. Busted seals. Broken nozzles, clogged screens, cracked concrete, dented containers, corroded metals and rusty underground pipes — all of these and thousands of other problems linked to aging were uncovered in the AP's yearlong investigation. And all of them could escalate dangers in the event of an accident.” No over-regulation here.
Financial regulation
The big kahuna, and daddy of all lax and weak regulation activity. According to a highly regarded 231-page report issued by two non-profits (Essential Information and the Consumer Education Foundation) "Sold Out: How Wall Street and Washington Betrayed America." it shows that, from 1998-2008, Wall Street investment firms, commercial banks, hedge funds, real estate companies and insurance conglomerates made $1.725 billion in political contributions and spent another $3.4 billion on lobbyists, a financial juggernaut aimed at undercutting federal regulation. Nearly 3,000 officially registered federal lobbyists worked for the industry in 2007 alone (many former high government officials). The report documents a dozen distinct deregulatory moves that, together, led to the financial meltdown. These include prohibitions on regulating financial derivatives; the repeal of regulatory barriers between commercial banks and investment banks; an abused voluntary regulation scheme for big investment banks; and federal refusal to act to stop predatory subprime lending. Weak regulation in the financial area alone could consume pages of documentation, but the effects we see today in a shattered economy are evidence enough.
Why this is happening
I believe there are three reasons why many Americans, and particularily conservatives, rebel against regulation(s). The first the Frontier mentality imbedded in the American character. That is what Frederick Jackson Turner described as "the significance of the frontier." Turner noted that unlimited free land was available, and thus offered the psychological sense of unlimited opportunity. This, in turn, had many consequences such as “optimism, future orientation, and the shedding of restraints”. Moreover, the West was famous for self regulaton – I guess you could call it the law of the six-shooter.
Secondly, because America is probably the most litigious society on the planet, regulations create conflict, confrontation and ultimately constant legal friction between the regulators and the regulated. Thus they become highly unwelcome, and are percieved as onerous.
Finally, as a business owner for 5 decades, over regulation is in the eye of the beholder. To me, they were merely a nuisance, and never obstructed my business operations. But as a consumer also, I felt they were needed and valuable. To conservatives, they are cover for their ongoing thrust to shrink government.
At any rate, the contention that America is over-regulated is over-stated. Indeed, a case could be made based on the above examples that our regulation machinery is weak, often ineffective, and the regulators have been too close or too influenced by those they are hired to oversee. As stated earlier, those who call for less regulation might want to be very careful what they ask for.