side bar
logo
Tuesday, August 9, 2022

Columns

Deregulation puts consumers at risk


Conservative candidates tout deregulation as desirable: Fewer burdens on businesses will foster growth and create jobs, whereas federal and state regulations are unnecessary impediments that put people out of work for no reason. The target audience is often small business owners. Has this myth been examined by the party?

Recent government data on unemployment during the recession suggests that it holds some truth, but not nearly as much as Republicans claim. CNN reported that in the first half of 2011, only 2,085 unemployed people cited government regulation as the culprit. Over 55,000 lost jobs were attributed to insufficient demand. The National Federation of Independent Business claimed that less than 20 percent of small businesses cited regulation as their most important problem. Once again, demand was key.

Some jobs are lost due to regulation, but it is not the devilish economy killer that Republicans say it is. Gary Burtless of the Brookings Institute agreed that little evidence supports that notion. Only a couple of the team of 16 economists from CNN Money seriously complained about regulations.

Enbridge CEO Pat Daniel, who works in North American energy transportation, praised new crude finds in Canada. Why? The country has the social consciousness, technical competence and regulatory infrastructure for responsible development. Daniel supports a new bill in the Senate that would place more regulations on the pipeline industry, including increasing inspections and creating new guidelines for infrastructure updating.

Tort reforms regulate problems after they have occurred, when regulations could have prevented those problems in the first place. That would decrease the need for litigation; so deregulation may be the problem that Republicans are trying to fix on a different front.”

Candidates also ignore ways that businesses are increasingly protected by tort reform bills (including Texas businesses: Perry crowns this as a fine achievement). States have been enacting these bills in order to reign in supposedly out-of-control litigation. They often place monetary limits on damages awards, joint and several liability, and venue choice, restrict the time frame consumers can bring lawsuits, make government agency approval sufficient to bar suit and mandate additional pretrial screenings. That means that someone who is hurt by a product has less time to initiate a lawsuit and faces a multiple gatekeepers. The producer faces much less threatening payments if the plaintiff is successful, and these rules make slim chances of success even slimmer.

Basically, regulating hurt consumers’ methods for recourse is fine, but regulating businesses’ ability to shirk responsibilities is a heinous act of anti-patriotism.

Arguments against regulation seem backwards, or at least lacking. Bart Chilton, a commissioner on the US Commodity Futures Trading Commission, told the New York Times that he is confident that new Dodd-Frank regulations will actually spur growth. Mandates create jobs in the financial sector, adding accountants and other internal controls. EPA emissions regulations or taxes would create incentives for investment and job creation in research and development.

Another unfortunate flip side is that tort reforms regulate problems after they have occurred, when regulations could have prevented those problems in the first place. That would decrease the need for litigation; so deregulation may be the problem that Republicans are trying to fix on a different front. Plus, what are a few thousand jobs when considering the good done by meat inspection, prevention of nuclear radiation accidents and adequate disclosure of information on products such as cigarettes and prescription drugs?

We cannot know precisely how regulation affects the economy, and politicians are doing a horrible job pretending that they can. Economic debates should focus less on which governor created the most jobs and more on realistic balancing of interests.

Rachel Farhi is a senior English literature and political science double major and may be reached at [email protected]

 


Back to Top ↑
  • COVID-19
  • Sign up for our Email Edition

  • Follow us on Twitter

  • Polls

    How are your classes going so far?

    View Results

    Loading ... Loading ...