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Did We Handcuff our Regulators?

May 26, 2010
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In today’s Washington Post, Steven Pearlstein offers another feeble condemnation of the Bush Administration’s regulatory policies, suggesting that federal agencies are no longer effective because they were “shrunken in size, stripped of talent and resources, demoralized by lousy leadership, captured by the industries they were meant to oversee and undermined by political interference and relentless attacks on their competence and purpose” under the 43rd.  Unfortunately for Pearlstein, whatever the faults of regulators like the MMS are, they aren’t due to a lack of resources or personnel, as Tad Dehaven explains over at Cato (with graphs!):

It’s true that regulators often do the bidding of the industries that they regulate. But “regulatory capture” is a long recognized phenomenon that undermines the contention that the government is well-suited to be a watchdog.

Regardless, is Pearlstein right that federal regulatory agencies were “dramatically” shrunk? Not according to a new study from George Washington University and Washington University in St. Louis. The figure shows that regulatory spending actually rose an inflation-adjusted 31 percent during the Bush administration.

That’s about $13 billion in $2009.  DeHaven also notes that regulatory staff rose by 42 percent under the Bush Administration, or about 80,000.  The hard numbers don’t sound that enormous, but they are fairly large in terms of percentages.  My point here isn’t to split hairs, but to point out that it seems pretty tough for regulatory agencies to have been “shrunken in size”, “stripped of talent and resources”, or “cripple[d]”, if you’re an Ali Frick fan, by a government that increased their resources by 31 percent and increased their staff by 42 percent.  Maybe it is time for business to end its “war against regulation”, as Pearlstein suggests, but personally, I think it’s well nigh time that said regulatory agencies quit doing drugs, watching porn at work, and hobnobbing around with executives from the industries that they’re supposed to be regulating.

These agencies’ failures are the shortcomings of a well-staffed, well-funded government, not free enterprise, as most people across the political spectrum are willing to acknowledge.  And apparently it’s George W. Bush’s fault that his regulators were too well-staffed and well-funded.  Perhaps liberals will come to the conclusion someday that maybe some governmental failures are independent from the size of government, i.e. perhaps more isn’t always better.  I anxiously await that day.

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One Comment leave one →
  1. The Destructionist permalink
    May 27, 2010 10:15 PM

    In light of the BP oil calamity it’s quite obvious that something must be done, and fast, if we are to save our world from corporations that would prefer to place huge profits above that of our environmental and financial welfare.

    As large corporations gobble up smaller corporations in an attempt to seize an even bigger piece of the global economic pie, it seems that businesses have been allowed to grow, unfettered, into unwieldy corporate behemoths (a.k.a., British Petroleum) with little, if any, regulations regarding their obligations to national sovereignties or allegiances.

    Maybe it’s just me, but I believe that if a corporation begins its “life” in a particular country, than it has an obligation to that country and its people: due in part to the patronage of its citizens throughout the years in helping that corporation to grow. When I hear about American businesses pulling up stakes and moving to other countries in lieu of cheaper labor and supplies elsewhere, I feel both embarrassed and betrayed. (They would be nothing if it weren’t for people like you and me. After all, we purchased their services, time and time again, fostering them constantly by giving them the opportunity to flourish. Our final reward for all our efforts? Millions of fellow Americans out of work, all desperately hoping that their unemployment benefits never run out.)

    I agree that the bad news is not just happening here in America, but around the globe. I blame that on the evolution of the business model: over the years, it has been compressed into a precise science in an effort to squeeze every last drop of profit out of the proverbial “bottom-line.” I began to notice the change in the late 1970’s when I was in my teens. Back then, it was a different world for me and I didn’t seem to care too much. Today however, it is a different story.

    What can we collectively do as Americans?

    Contact your representatives in the House and Senate. Let them know that

    big business should be regulated and ask them to enact laws to:

    1.Ensure that all corporations “born” within the United States deter from any and all actions that would adversely affect our country;
    2.Place high tariffs on imports from American businesses that move their bases of operations (not to mention our jobs) to other regions of the world;
    3.Work to limit their corporate power and influence in Washington D.C. by passing laws whereby politicians, found to have ties with said corporations or corporate lobbyists resign.
    4.Endeavor to ban all corporate favors and corporate lobbyists from Washington D.C.
    Essentially, it’s up to us to fashion our own future. If we don’t, rest assured that someone, or some corporation will.

    •(I know that BP was not born and reared here in the United States. I was merely using it as a reference as to what corporations are capable of doing if left to their own devices.)

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