Wednesday, March 28, 2012
John Stossel makes a couple of excellent and less-than-obvious points about how government regulation strikes at the heart of our economy by removing its most valuable asset -- brainpower -- from the equation at multiple levels.
[T]he thick rulebooks help cheaters by giving them an indecipherable screen to hide behind. They also mislead consumers by giving them the illusion of protection. "I don't need to worry because regulation protects me." It's why some sophisticated people gave all their savings to Bernie Madoff.In the first two clear, memorable sentences, Stossel has eviscerated the whole idea that government regulations somehow have a magical power to stop the unscrupulous, as well as protect the ignorant from the effort of careful thought. But he's not done. Aside from encouraging stupidity and aiding desception, regulations have a huge cultural cost:
On top of doing little good, endless rules kill the freedom that made America the land of opportunity. We preach entrepreneurship, and try to teach children the value, satisfaction and excitement of starting their own businesses. Then we let entrepreneurial opportunity be crushed under the weight of the regulatory state. The byzantine rules send this message to Americans: Don't try. Don't build anything. Don't innovate. Don't create anything new. [bold added]Americans who foolishly find amusement in stories, such as how difficult Stossel once found it to open a lemonade stand, should stop to think about what this is doing to us, now, as well as how this will stunt our children's psychological growth.
Stossel does note that "big businesses often have no problem with this". While this isn't the blanket condemnation of large businesses that is a commonplace on the left, I wish he had said something to the effect that some in business succumb to the temptation to take advantage of government regulation. His mention of big business is necessary, but in today's cultural climate, big business as such is often unjustly blamed for many of the problems caused by improper government, and I could see the mention adding some fuel to that fire. Aside from that, this is a great followup to another piece of his I noted here some time back about the cost of government meddling in prediction markets.