July 23, 2004
Right Regulation
Arguments today about government regulation often degenerate into citations of examples intended to prove either that there is too much regulation or too little regulation. Of course it is easy to find such examples to support either argument, which suggests to me that “too much vs. too little” is the wrong argument. Regulations are not, nor can they ever be, a perfect tool for enforcing responsible behavior on the part of individuals and corporations. Does that mean we should start eliminating them every time we see a case where someone is unjustly hurt or inconvenienced by their enforcement? Of course not!
It's work, but the emphasis should always be on making regulations right and reasonable, tweaking them as necessary to assure that the worst abuses are outlawed, while harmless practices are not punished.
It is a useful metaphor to think of that which needs to be controlled, whether it is pollution, or mistreatment of employees, or the creation of unsafe products, as a body of water on a hill which ought to be constrained from flowing down the hill. Gravity is analogous to the greed or convenience, which would cause the bad stuff to escape. Dams are analogous to the regulations, which hold it back. It is not necessary or desirable to place a concrete cap over the whole lake to control it (over-regulation), but it is foolish to allow a torrent of water to cascade from a gaping mouth in the lake (under-regulation). The thing that people don't seem to get is that it is possible to have both over-regulation and under-regulation within a single system. In fact, sadly, it is often easier to establish rules, which control minor leakages, than to fight for the major regulation that would stanch the rampant abuses. In my analogy, this is like creating little dams to stop places where rivulets are escaping from the lake, while allowing the gaping mouth to remain open.
Those who fight regulations at every turn are forever shining a spotlight on those cases where onerous requirements prevent reasonable actions, and arguing that we are fundamentally over-regulated. Those who want to keep misbehavior in check will shine the spotlight on the rampant abuses, and sometimes argue that we are thus under-regulated and therefore defend even ineffective regulations on the grounds that we can't afford to undo regulations if they have any effect on curbing something undesirable. This desire to protect one’s turf is natural, but if in doing so the opposition is given the ammunition to label all regulation as over-zealous, then is it really worth it? It's time to concede that there is both under-regulation and over-regulation, and for both sides to cede ground in the regulation wars. My fear is that it is always easier to blow up those little dams controlling the rivulets than it is to construct the big one that would block the gaping mouth.
Posted by Walker Willingham at July 23, 2004 11:20 AMI agree that arguments about ‘too much’ versus ‘too little’ regulation can miss the real point. The central argument in any regulation discussion is whether or not the regulation should actually be the purview of the governing power in the first place.
When we talk about personal freedom issues, liberals, democrats, and progressives generally err on the side of less regulation. But when we talk about personal and corporate economic freedoms they become decidedly fascist. (Yes, I used that word for effect.)
Government should have a narrowly defined purpose and mission. Otherwise what you end up with is what your analogy describes. Building a damn around a mountain. Which besides being pointless is counter intuitive anyway. Why would we want to keep water on top of a hill?
The analogy is apt because in an unintended way it describes what happens when reality isn’t taken into account. Regulating greed or avarice is precisely what you describe, Walker. Working completely contrary to the laws of physics and common sense. Rather than trying to regulate greed and avarice, (why not lust and gluttonly then too?), government should stick to regulating theft and fraud which are the actual actions which harm rather than the sins that motivates them. That way we can make damns in strategic places like the ends of valleys. Let’s work smarter not harder.
Posted by: Eric Simonson at July 24, 2004 12:48 AMMoving away from allegorical facism (yes, I use THAT for effect:-), I would like to relate my own experience with the private and public sector.
I work in the civil engineering field. I started my career working for the Texas Highway Department. I worked there for five years. I learned the basics of inspection of construction projects. We were always teased by outsiders about our cushy jobs and the few complete dead weight morons that had worked there for years. It bothered me.
I eventually left the Highway Department and went to work for private firms in the same field. The work was more diverse, and I developed a broader understanding of the technical aspects of the business.
I have now been in this business for over 25 years and have learned the following lessons:
The Highway Department inspectors produced the highest standard of quality in Construction with the possible exception of the Corps of Engineers.
This standard has deteriorated with the introduction of the privatization of some the work in the last 10 years or so. Looking back, I personally worked very hard when I was with the Highway Department.
The privatization was done with the intent to reduce the cost to the government. Knowing how contracts work, I know this savings hasn’t occurred except for the long term cost of pensions.
The private companies generally have much poorer benefits and spotty retirement plans. They still have many dead wight morons working for them. They just cycle them more (hire and fire). The owners become millionaires and the workers generally get shafted and really don’t care at all about whether the contractors deliver quality construction.
While I have not seen corruption in the awarding of Highway contracts, City and County contracts are very corrupt and based on personal associations and political contributions. Several companies exist soley on these contracts.
There are a few excellent private companies. But they still participate in the corrupt contracting and influence games, they have to.
My observation is this. While there are problems with waste in any large government organization, I found, in general, the Highway Department to be highly effective, the personel to be largely competent and dedicated, and the employees reasonably compensated and with decent healthcare and retirement plans.
The private industry is largely corrupt, produces low quality work, abuses it employees and leaves them poorly insured with poor retirement plans and
enrich unscrupulous, greed driven owners. The cost of healthcare and feeding and housing them when they retire will be passed on to taxpayers anyway.
While I personally have learned more because of my private industry experience, I don’t think the privatization has benefitted the public at large.
Granted, this is anecdotal in nature, but I think shows the problems associated with making idealogical statements and assuming public perception is always on target.
One of the worst offenders from a corrupt point of view always used to say he wished he could run the Highway Department and make it more “efficient”. He was of course Republican. His reputation in the business is abyssmal. I’m glad he never has gotten the chance.
This experience is a large part of why I dislike the economic theories of the “Supply Siders”. Businessmen understand what is in their interest, and while there are honest and honorable types out there, they are swimming in a pool of sharks. Politicians like Tom Delay and George Bush make my skin crawl because they play on the public perception that private business is more efficient than government. In someways it is. But who really benefits? Why has corporate execitive compensation outstripped the workers, even when profits haven’t? Why has wealth continued to be concentrated in fewer and fewer hands?
I personnally believe the robber barrons have returned and have way too much influence in America. The Republican party in particular sells this as good for America, while stealing from the middle class to enrich the wealthy. The Democrats under Clinton have joined the pigs at the troth.
On another note, I worked for the Trinity River Authority once, also. This is a somewhat hidden agency that operates water treatment and sewerage plants on the Trinity River. Access to its sites is restricted, so the public generally doesn’t know it exists.
They decided they were going to manage construction of a major Wastewater Treatment plant in the Dallas area. This was a total boondogle. They had no competence in field and allowed the contractor to essentially work unmonitored because the inspection staff they hired didn’t know what was good practice or bad. Needless to say, I didn’t work there long when I pointed this out to them. They offered me a huge severence, which I presume was to buy my silence.
I wouldn’t have tried to fight a huge agency anyway, It would have been suicidal and pointless.I’ve never desired being a martyr.
Posted by: Greg at July 24, 2004 02:47 AMGREG,
To say privatisation lacks in standards and quality is an understatement. Thank you for bringing this to mention.
In the state of Florida we have had nothing but problems with Jeb Bush’s privatisation.
The problem is that with bids and state contracts “red” privatising states always take the lowest bidder. The lowest bidder is many times (if not always) shoddy quality work that A: costs the taxpayer more in the long run to go back and fix & B: It is substandard and quite dangerous structurally.
There’s one story that comes to mind of this: Outside of Tampa there was a contractor re-building and fortifying existing overpasses, About seven months ago an overpass they had just finished had a giant steel girder on the front of it collapse on a busy highway killing three, one child crushing their car. It had actually come down into traffic and cars were going around it when this happened.
We have roads down here that have barely visible lines or lines too narrow and some that are actually fading soon after they’ve just been painted. Privatisation has been a nightmare down here. Projects take forever to get done and some get started and they stop for one reason or another(leaving it for weeks) and another company has to take over. Thank God this isn’t a northern state with real seasons or it would be a real disaster with what states have to cope with.
And as for the corruption aspects I don’t doubt it a bit. He who donates the most gets a bigger slice.
And the Republican assumption of efficiency thing is absolute nonsense. How does shoddy work that others have to go back over and repair cost us less?? We are in a state that is WELL KNOWN for scammers. Whether it’s plastic surgery or multi-level marketing schemes it still is a state of pirates. Now the state’s major infrastructure and reconstruction is being privatized? This is plausible to someone?
A: scammers bidding low and in return doing low grade work.
B: Public safety hazards
C: A state contract going out on the same project that should have been done right in the first place years earlier if they had a reputable company doing it right the first time.
This is what republicans call EFFICIENT?!!!
Republicans can say what they want about Labor Unions but Unions don’t have these problems, this would be a rarity. We don’t see this in Massachusetts or some other blue state because there are standards and standards that cost less in the long run. Not to mention aren’t a public safety hazard.
Republicans just want EASY ANSWERS they can serve up to the public to ensure votes and I’m afraid that’s it in a nutshell. Popularist answers to complex questions with lots and lots of nests being feathered and coffers being filled.
Labor Unions are actually good for the state as are Unions of all kinds. This is all revenue that gets recirculated into the state and communities not to mention standards are kept in place for the most part with the INSPECTORS there working hand in hand(as opposed to “see you occasionally”) with what is going on.
I don’t mind some privatisation of public works but with bidding as it is always going to the lowest and usually going over the original bid laid down earlier (those companies absorbing the cost and then taking it from other projects they have contracts for) this is problematic. The Republican rationale is that they won’t get another job? Okay So that’s the rationale it’s a testing field? Five bad companies before you find a good one? What does that cost us the taxpayer in the long run?
Posted by: SB at July 24, 2004 06:31 AM
For those who would lift the burden of government regulation from the back of private industry, it’s instructive to remember that industry was not always regulated.
Posted by: American Pundit at July 24, 2004 07:20 AMEric questions whether regulation, outside theft and fraud, should be the purview of government. Does he really believe, for instance, that there should be no laws setting the levels of mercury that can be released into our watersheds? Is the public good really best served by industry self-regulation? Who does enforcement? It is true that industry should have a natural self-interest in not destroying the resources from which they make their profits, but that isn’t going to stop abuses when there is money to be made now, and I don’t trust even the most responsible industries to err on the side of safety and the public good in setting the standards.
Eric writes:
When we talk about personal freedom issues, liberals, democrats, and progressives generally err on the side of less regulation. But when we talk about personal and corporate economic freedoms they become decidedly fascist… .We liberals believe there is a pretty compelling reason for regulation of corporations: Industry gone awry has a harmful effect on the public good, personal vices only harm the individual and those in their immediate constellation. I think you would find that the CEOs of the more responsible players in industry are thankful for the government’s role in regulation. They want to protect the resources on which they depend, be good community citizens, have happy, fairly compensated employees, and they want rules in place to assure that others compete fairly.
Rather than trying to regulate greed and avarice, (why not lust and gluttony then too?), government should stick to regulating theft and fraud which are the actual actions which harm rather than the sins that motivates them.
No it is not possible to regulate greed directly, but it is necessary to have sensible regulations to protect workers, consumers, and the environment. We can and should debate what is sensible, but the notion that government should entirely get out of the business of regulation is a non-starter. I used the lake analogy because it is easy to visualize, and of course the “water” was supposed to represent the bad stuff, not water. I thought of making it a lake of sulfuric acid, but that would have tended to constrain the analogy to environmental issues, and I think it can be used more broady to apply to labor and consumer issues. There are onerous regulations which nitpick stuff way beyond what is needed, and we should get rid of those, but let’s not throw out the baby with the bathwater, and let’s be willing to create new regulations as needed to control real threats to the public good.
Does he really believe, for instance, that there should be no laws setting the levels of mercury that can be released into our watersheds?
Now why would I want to drink poison? The dumping of chemicals into water that is going to get into drinking water or food supply falls under theft and fraud. Two-fold… for one it’s a property crime and I’d also argue a form of assault. I’m not a lawyer so those aren’t meant to be lawyerin’ terms by any means.
What I said is that liberals are starting with the premise that corporations are greedy and greed needs to be regulated. That is the wrong scope for regulation. From that they are extrapolating regulation of industry that is absurd. Targeting and demonizing Walmart for selling mass quantities of inexpensive goods. The idea that ‘communities’ should have ‘democratic’ control over businesses dictating wages, hours, size of stores, types of goods sold ostensibly to save (more expensive) local mom & pop stores. This is the kind of marxist clap-trap we get into when we don’t set the ground rules to begin with.
Liberals want to use regulation to enact their moralist (and sometimes theological) social policy. That should be off limits.
How far is too far? Some would have us enforce quite radical social justice ideas through the argument you are making about, ‘protecting workers, consumers, and the environment’. I see citizens missing in this list. THe bill of rights applies to all Americans, any regulation should as well. When we talk about regulation, so often what I hear from liberals is that in their minds it is a tool to strike at the rich corporate boogey man.
Posted by: Eric Simonson at July 24, 2004 07:34 PMEric, I like your contortionist definitions of theft and fraud. Which of the following corporate regulations fall under the category of “prevention of theft and fraud” and which fall under the category of “invasive government meddling” (all of these, by the way, would not exist if not for government regulations)?
—> Requiring construction, heavy industry, and assembly-line workers to wear hard hats and safety goggles.
—> Requiring businesses to give employees lunch breaks and bathroom breaks.
—> Requiring food manufacturers to put nutrition information on food products, including notification of dangerous allergens such as peanuts and carcinogens such as saccharine.
—> Requiring credit card issuers to disclose to their customers *all* terms and conditions on the card application form. (aka, the “Schumer box”)
—> Requiring ATM machines to tell you when they are going to charge a fee for using an out-of-network bank (another Chuck Schumer law, by the way).
—> Requiring pharmaceutical companies to reveal the potential side effects of their drugs.
—> Requiring organizations that subcontract to the government to conform to strict accessibility guidelines (to allow the disabled to access government services).
—> Requiring publicly-traded companies to publish reams and reams of financial reports and disclosures according to strict SEC document guidelines.
—> Requiring restaurants to post those “Employees must wash hands before returning to work” signs.
—> Requiring compliance officers at brokerages to do background checks on customers to ensure that they are not on lists of known terrorists and felons.
—> Requiring factories to install and clearly mark fire exits that conform to strict safety codes.
—> Requiring food packing plants to submit to regular government health inspections.
—> Requiring makers of childrens’ clothing to avoid certain flammable materials.
A strict libertarian would oppose all of the above, I would assume. A libertarian might argue that if a food plant shipped poisonous meat to supermarkets and six kids die, then the market will force that plant out of business. Or a bank that charges too many hidden fees will be spurned by educated consumers. Is this how you feel about the above issues? It seems to me that for every “bad” regulation there are hundreds of great ones, yet the deregulating right seems to always want to throw the baby out with the bathwater.
-Cf
All I can say to the above post, Eric, is HUH?
Who protests against Walmart for offering cheap prices? I’ve personnaly never met anyone. What they do protest about is paying their employees non livable wages, bribing public officials to change zoning laws, buying from slave child labor in China. Perhaps you are for child slave labor.
As for the poison you drink, well as the bartender says name your own. I live in Houston, and if you believe the petrochem industry doesn’t pollute the enviroment, you are truly naive. There are daily releases in the air and water. It isn’t well publicized,and usually buried in technical gobbledegook, but ask anyone who lives downwind of the plants, or watch the news when they say that the carcinogenic aromatic ehtylenes won’t harm you, or when a plant blows up every few months and they tell people to shelter in place. but don’t anounce what the release was for several days, or when the San Jacinto River catches on fire once in a while.
Posted by: Greg at July 24, 2004 11:31 PM> Liberals want to use regulation to enact
> their moralist (and sometimes theological)
> social policy.
Eric, can you name a current government regulation that is an example of this? Can you name ten examples of this? I can’t even think of one.
-Cf
Posted by: Christopher Fahey at July 24, 2004 11:38 PMEric!
Listen up, CORPORATIONS ARE SURVIVAL OF THE FITTEST and it doesn’t get anymore Darwinianly real than that. That’s what they are merger by merger by buyout and sell off. That is their existentially perpetual state, THAT’S IT! No sunny blue skies just supply demand and survival!
Eric your affinity for corporations like they are pets or something is amusing. It is all just a body of contractual elements that when in the right formula makes money.
I don’t think they are evil or good but need to be monitored so as the power they have doesn’t usurp those of the citizenry of the United States or any other country. And in lobbies they do usurp, as well as their influence peddling, You don’t agree that this is a dangerous element to our Republic?
They (corporations) have no obligation to create jobs, correct? You yourself have said that prior, correct? Then why should they get preferential governmental treatment and bail outs, corporate welfare, incentives and the rest? If what they do isn’t in the best interest of the country why do they get better treatment than the people of this country that pay the taxes that support it?
They have the power to buy influence politically, ensure public monies (subsidies) and pass legislation, stuff that you with all of your opinions don’t have the voice to do in this country. Even Rush Limbaugh is smart enough to see corporate lobby handprints on everything, but you can’t?
Eric I understand what you are saying but it’s stupid. Right now we are a Corporate Oligarchy essentially, is that a good thing Eric? Where corporations take YOUR tax dollars and pay THEIR own bills via subsidized grants. That’s feasible to you?
Just because a corporation does well that doesn’t mean that we as a nation do well. We should have fair (natural) competition and not a corporate welfare state where hands who’ve bought influence through campaign support get truckloads of multi-million dollar freebies at our expense.
Now as for extreme free-marketism that’s radicalism Eric! If you want to change a portion of the NAFTA agreements well then you must be a Isolationist as Rove and Hughes slant it. Eric wise-up there has to be anti-trust laws and trade agreements that work for all. And public Works projects that someone can be held accountable for, THAT IS WHAT WE NEED not this Libertarian mumbo jumbo pulpit on “Corporations need Wuv toooo” preamble but real stuff Eric.
The world doesn’t work by a clear set of over-simple baby answers sold to you wholesale at the Newt Gingrich Flea Market. This is complex stuff Eric that requires responsibility from a myriad body of angles to work.
I don’t know what else I can tell you!
Posted by: SB at July 25, 2004 12:03 AM
