Tuesday, April 26, 2011

The Case for Regulation

Let’s cut to the chase, shall we. No one likes being told what to do. Obeying the speed limit, getting to work on time, taking out the trash, curbing the dog, paying the bills, doing the taxes, etc, let’s just save everybody the trouble and agree, for the sake of argument, that few, if any, have a fondness for these activities. Left to our own devices, I dare say none of us would bother to observe most, if not all, of them. The sad truth is, deeply embedded within the human psyche is a natural resistance to taking direction, no matter how good it might be for us. From a biblical perspective, the story of Man’s fall from grace in the Garden of Eden is a perfect analogy. Given the choice between living under the auspices of a loving Creator who provided every need and asked but one thing in return – to obey his simple instructions – Man chose to go his own way and, as a result, forfeited paradise. Sad, but true.

Now imagine, if you will, how much more dicey things get when, instead of individual people hating to observe the most basic of rules, laws and social mores, we add to the mix the vast majority of companies, small and large, to the equation that have an equal aversion to taking direction. You can appreciate where this is going. The airline that doesn’t perform routine safety checks on its aircraft, the meat and packing company that doesn’t inspect its beef for botulism, the chemical manufacturer that thinks it’s okay to dump its waste into the water supply, or the oil producer that doesn’t ensure its rig is safe before it starts drilling for oil, are not just the rare exceptions to the rules; they represent the standard operating procedure for how corporate America would and often does behave, absent any semblance of rules and regulations.

Even with a plethora of regulations already on the books, corporations still push the envelope to see how far they can go without getting caught. The BP oil spill in the Gulf of Mexico is a case in point. Can you imagine how much worse things would be if those regulations were to suddenly disappear?

And it isn’t just our physical well-being that would be in jeopardy. Our financial health would forever be at risk. The recession of 2008-09 was the direct result of a failure to properly regulate an industry, which thought nothing of marketing sub-prime mortgages it knew were worthless to unsuspecting consumers. When the mortgage bubble burst, the entire world economy went into the tank and countless millions were adversely affected. Believing industries can regulate themselves without outside agencies overseeing them is the epitome of delusional thinking.

The costs associated with these regulations aren’t cheap. Critics of government regulation on the Right have long held that these regulations place an undue burden on the economy, which eventually get passed on to the consumer in the form of higher prices, and there is some truth to that. The airline ticket, the steak dinner, the cleaning products, the gas at the pump, all cost more in an economy that is well regulated. The comeback from the Left? That’s the price you pay as a society to live in a safer world.

This is the fundamental dilemma that plagues the nation. Everyone hates having to pay higher prices for government regulations, yet few, if any, would opt to strip them away entirely. Truth be told, the world we live in would be radically different without some form of government regulation. The issue for most is how much regulation to have and how effective it must be.

We have seen, first hand, what happens when corporations take advantage of loopholes in the poorly written regulations, or, as was the case with the great recession, non-existent regulations in the first place. The repeal of Glass-Steagall in 1999 set the stage for the mortgage meltdown by eliminating the dividing line between Wall Street investment firms and commercial banks. The year before the repeal, sub-prime loans made up just five percent of all the mortgages written in the U.S.; by 2008 they comprised almost thirty percent. This cannot be a coincidence. Once more, in an attempt to placate a private sector desirous of greater profits, the government made the fatal error of assuming these financial institutions could and would adequately police themselves.

And yet, with an overabundance of data supporting the need for greater regulation, forces on the Right are doing everything within their power to either strip away those regulations they deem too costly, or simply rendering ineffective those regulations they can’t repeal. The failed attempt by Congressional Republicans to prevent the EPA from enforcing its greenhouse emission regulations during the recent budget battle was a case in point. Regulations that lack enforcement are analogous to tigers with no teeth, or speed limits without cops.

Yep, no cops, no tickets. Imagine such a world. No limits, no rules, no consequences. Make believe, you say? Not to some. This is the reality that awaits us if Republicans have their way. They have made their intentions crystal clear. They want to eliminate virtually every law and regulation that “costs” corporate America its precious profitability and trust that the great engine of capitalism can govern itself, despite all the evidence to the contrary. Polluters won’t pollute and swindlers won’t swindle. Why? Because that would be against their best interests, that’s why. And in this crazy, upside down world we call politics, a lot of supposedly intelligent politicians are peddling this nonsense to an awful lot of gullible voters, who, quite frankly, should know better.

Yes, rules and regulations are a drag. They are inefficient, costly and most definitely unpopular. But, in the long run, having them is better than the alternative. Democrats must connect the dots on this issue and drive home the point to the electorate or else the unspeakable will happen and they will have nobody to blame but themselves. They must convince voters that despite the added expense, regulations have helped make the country a safer and more secure place to live in than it was decades ago.  Imagine what it must’ve been like in Cleveland in 1969 when the Cuyahoga River caught fire because it was so polluted. Or how hard it was to breath in downtown Los Angeles because of the smog in the 1970s.  Think it can’t happen again? Guess again.

Still not convinced? Next time you’re late for work and the boss reads you out, tell him you find his rules counterproductive to your personal best interests. Let me know what happens.  In the meantime, I'll leave with the closing words to a Randy Newman song many of you know quite well.

Burn on, big river, burn on
Burn on, big river, burn on
Now the Lord can make you tumble
And the Lord can make you turn
And the Lord can make you overflow
But the Lord can't make you burn

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