The Economist: Over-regulated America, The home of laissez-faire is being suffocated by excessive an
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[td][QUOTE]AMERICANS love to laugh at ridiculous regulations. A Florida law requires vending-machine labels to urge the public to file a report if the label is not there. The Federal Railroad Administration insists that all trains must be painted with an “F” at the front, so you can tell which end is which. Bureaucratic busybodies in Bethesda, Maryland, have shut down children’s lemonade stands because the enterprising young moppets did not have trading licences. The list goes hilariously on.
But red tape in America is no laughing matter. The problem is not the rules that are self-evidently absurd. It is the ones that sound reasonable on their own but impose a huge burden collectively. America is meant to be the home of laissez-faire. Unlike Europeans, whose lives have long been circumscribed by meddling governments and diktats from Brussels, Americans are supposed to be free to choose, for better or for worse. Yet for some time America has been straying from this ideal.
Consider the Dodd-Frank law of 2010. Its aim was noble: to prevent another financial crisis. Its strategy was sensible, too: improve transparency, stop banks from taking excessive risks, prevent abusive financial practices and end “too big to fail” by authorising regulators to seize any big, tottering financial firm and wind it down. This newspaper supported these goals at the time, and we still do. But Dodd-Frank is far too complex, and becoming more so. At 848 pages, it is 23 times longer than Glass-Steagall, the reform that followed the Wall Street crash of 1929. Worse, every other page demands that regulators fill in further detail. Some of these clarifications are hundreds of pages long. Just one bit, the “Volcker rule”, which aims to curb risky proprietary trading by banks, includes 383 questions that break down into 1,420 subquestions.
Hardly anyone has actually read Dodd-Frank, besides the Chinese government and our correspondent in New York (see article). Those who have struggle to make sense of it, not least because so much detail has yet to be filled in: of the 400 rules it mandates, only 93 have been finalised. So financial firms in America must prepare to comply with a law that is partly unintelligible and partly unknowable.
Flaming water-skis
Dodd-Frank is part of a wider trend. Governments of both parties keep adding stacks of rules, few of which are ever rescinded. Republicans write rules to thwart terrorists, which make flying in America an ordeal and prompt legions of brainy migrants to move to Canada instead. Democrats write rules to expand the welfare state. Barack Obama’s health-care reform of 2010 had many virtues, especially its attempt to make health insurance universal. But it does little to reduce the system’s staggering and increasing complexity. Every hour spent treating a patient in America creates at least 30 minutes of paperwork, and often a whole hour. Next year the number of federally mandated categories of illness and injury for which hospitals may claim reimbursement will rise from 18,000 to 140,000. There are nine codes relating to injuries caused by parrots, and three relating to burns from flaming water-skis.
Two forces make American laws too complex. One is hubris. Many lawmakers seem to believe that they can lay down rules to govern every eventuality. Examples range from the merely annoying (eg, a proposed code for nurseries in Colorado that specifies how many crayons each box must contain) to the delusional (eg, the conceit of Dodd-Frank that you can anticipate and ban every nasty trick financiers will dream up in the future). Far from preventing abuses, complexity creates loopholes that the shrewd can abuse with impunity.
The other force that makes American laws complex is lobbying. The government’s drive to micromanage so many activities creates a huge incentive for interest groups to push for special favours. When a bill is hundreds of pages long, it is not hard for congressmen to slip in clauses that benefit their chums and campaign donors. The health-care bill included tons of favours for the pushy. Congress’s last, failed attempt to regulate greenhouse gases was even worse.
Complexity costs money. Sarbanes-Oxley, a law aimed at preventing Enron-style frauds, has made it so difficult to list shares on an American stockmarket that firms increasingly look elsewhere or stay private. America’s share of initial public offerings fell from 67% in 2002 (when Sarbox passed) to 16% last year, despite some benign tweaks to the law. A study for the Small Business Administration, a government body, found that regulations in general add $10,585 in costs per employee. It’s a wonder the jobless rate isn’t even higher than it is.
A plea for simplicity
Democrats pay lip service to the need to slim the rulebook—Mr Obama’s regulations tsar is supposed to ensure that new rules are cost-effective. But the administration has a bias towards overstating benefits and underestimating costs (see article). Republicans bluster that they will repeal Obamacare and Dodd-Frank and abolish whole government agencies, but give only a sketchy idea of what should replace them.
America needs a smarter approach to regulation. First, all important rules should be subjected to cost-benefit analysis by an independent watchdog. The results should be made public before the rule is enacted. All big regulations should also come with sunset clauses, so that they expire after, say, ten years unless Congress explicitly re-authorises them.
More important, rules need to be much simpler. When regulators try to write an all-purpose instruction manual, the truly important dos and don’ts are lost in an ocean of verbiage. Far better to lay down broad goals and prescribe only what is strictly necessary to achieve them. Legislators should pass simple rules, and leave regulators to enforce them.
Would this hand too much power to unelected bureaucrats? Not if they are made more accountable. Unreasonable judgments should be subject to swift appeal. Regulators who make bad decisions should be easily sackable. None of this will resolve the inevitable difficulties of regulating a complex modern society. But it would mitigate a real danger: that regulation may crush the life out of America’s economy.[/QUOTE][/td]
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[url]http://www.economist.com/node/21547789[/url]
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The comments are painful too
I don't like how they compare the US to Europe and all that bullshit.
There needs to be rules, maybe they're too complex currently, but just getting rid of rules doesn't help us.
[quote]
Next year the number of federally mandated categories of illness and injury for which hospitals may claim reimbursement will rise from 18,000 to 140,000. There are nine codes relating to injuries caused by parrots, and three relating to burns from flaming water-skis.
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Something like this seems overly complicated, wouldn't it just be easier to say "all illnesses and injuries" rather than listing 95% of all possible ways to get injured?
[editline]17th February 2012[/editline]
And when I saw this
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All big regulations should also come with sunset clauses, so that they expire after, say, ten years unless Congress explicitly re-authorises them.
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All I could say was "why?"
If you have a regulation like rat shit can't be in the food you serve at your restaurant, why should that be re-voted on every ten years?
Fuck these guys, all these regulations are written by lobbyists and are full of holes Wall Street exploits.
Then they whine that there is too many and will try to remove any rules they can't exploit the hell out of.
Simple, clear rules aren't proposed because they'd actually work, thus not profitable.
Great logic Economist, instead of reforming necessary rules, just do away with them!
What is with this desire to go back to laissez-faire capitalism? I'm sorry, was the industrial revolution not evidence enough that MAYBE it's not that good of an idea.
[QUOTE=Governor Goblin;34745019]What is with this desire to go back to laissez-faire capitalism? I'm sorry, was the industrial revolution not evidence enough that MAYBE it's not that good of an idea.[/QUOTE]
it makes plutocrats more money
Murdoch. That's all that need be said.
The economist is(as usual) right. We have way too many rules on the book and these rules are too open to corruption from lobbyists and special interests. We need clear, consistent rules.
[editline]17th February 2012[/editline]
[QUOTE=PvtCupcakes;34742070]
All I could say was "why?"
If you have a regulation like rat shit can't be in the food you serve at your restaurant, why should that be re-voted on every ten years?[/QUOTE]
"Big Regulation". That means regulations that affect a large amount of people and businesses in big ways. Saying you can't have rat shit in the food isn't big regulation, it's mostly common sense. The Dodd-Frank bill is an example of big regulation.
Yeah, I agree, we should go back to laissez-faire!
Don't you see, it's a better future for all!
[IMG]http://thyblackman.com/wp-content/uploads/2011/07/nword4u.gif[/IMG]
[B][I][U]NOPE.[/U][/I][/B]
Regulation is here to stay. Remember what happened last time when America had L-F-Capitalism? Children missing limbs, cancer, lung diseases, a diseased, dying, and starving population, not to mention SLAVERY. Yeah, sorry, but LF Capitalism creates suffering for the common man while the rich continue to fill their coffers and live in luxury. [del]VIVA LA COMMUNISM[/del]
[QUOTE=certified;34745578]Yeah, I agree, we should go back to laissez-faire!
Don't you see, it's a better future for all!
[IMG]http://thyblackman.com/wp-content/uploads/2011/07/nword4u.gif[/IMG]
[B][I][U]NOPE.[/U][/I][/B]
Regulation is here to stay. Remember what happened last time when America had L-F-Capitalism? Children missing limbs, cancer, lung diseases, a diseased, dying, and starving population, not to mention SLAVERY. Yeah, sorry, but LF Capitalism creates suffering for the common man while the rich continue to fill their coffers and live in luxury. [del]VIVA LA COMMUNISM[/del][/QUOTE]
you put a lot of effort into a reply for an article you didn't read
I can understand getting rid of the really absurd regulations, the sad thing is that lobbyists are the ones who usually make the writ of law before it is voted on. So you can make out what that means.
Yeah the article is "Yay America!", but they bring up a couple good arguments. The rules we create are ridiculously written to the point that no one reads them, let alone understand them. It doesn't seem like they want us to do away with regulation, but make them simpler to understand and to erase the wordiness. But fuck that shit with the "America was meant to be the home of laissez-faire", that's a load of bullshit and that got us nowhere.
They're right. Kinda. Current regulations are horrible, abominable things dreamed up by the people who profit from them being horrible. As other people have iterated clean and well thought out regulations would be a good thing in this system.
I'm honestly a little disturbed at how increasingly far politicians are drifting away from the public, and how the gap isn't just widening, but our perception of the gap that's been there for a while is finally clearing up. We need to put some serious work as the global public to actually watch these people. They should be scared of us.
Yeah it's a "Yay America" post, but some decent points are brought up. For example, if it's really true that for every hour a patient is being treated that 30 minutes of paperwork is created, than that's fucked. Also, I've always received the impression from the United States that these pieces of legislation and regulation just stack on top of one another. Don't know if that really happens or not though.
wall-street plutocracy has made sure we don't follow the "excessive and badly written" regulation anyway so i don't know what the economist's beef is.
[QUOTE=thisispain;34746591]wall-street plutocracy has made sure we don't follow the "excessive and badly written" regulation anyway so i don't know what the economist's beef is.[/QUOTE]
No, they make it so only [I]they[/I] don't have to follow it. They write regulation that benefits them, they find loopholes and bribe regulators when it doesn't benefit them. These things are bad from an objective economic standpoint.
So does this mean if they do away with all corporate regulations and return to late 19th century laissez-faire capitalism, I'll be allowed to hire children and basically work them as slaves for the rest of their lives?
Oh yeah- that's totally the way to go...
I mean, just look at how happy these kids were to be working for barely nothing in foul coal mines:
[img]http://thinkprogress.org/wp-content/uploads/2011/03/child-labor2.jpg[/img]
See? Happy.
[QUOTE=LunchboxOfDoom;34746782]So does this mean if they do away with all corporate regulations and return to late 19th century laissez-faire capitalism, I'll be allowed to hire children and basically work them as slaves for the rest of their lives?
Oh yeah- that's totally the way to go...
I mean, just look at how happy these kids were to be working for barely nothing in foul coal mines:
[img]http://thinkprogress.org/wp-content/uploads/2011/03/child-labor2.jpg[/img]
See? Happy.[/QUOTE]
Learn logical fallacies please. Then you can be readmitted to the grownup discussion about economics.
[QUOTE=yawmwen;34746764]No, they make it so only [I]they[/I] don't have to follow it. They write regulation that benefits them, they find loopholes and bribe regulators when it doesn't benefit them. These things are bad from an objective economic standpoint.[/QUOTE]
Of course, that is true. But the article's point of view seems to be that we should go back to laissez-faire, when in fact the answer is better regulation not no regulation.
[QUOTE=Megafanx13;34746848]Of course, that is true. But the article's point of view seems to be that we should go back to laissez-faire, when in fact the answer is better regulation not no regulation.[/QUOTE]
"More important, rules need to be much simpler. When regulators try to write an all-purpose instruction manual, the truly important dos and don’ts are lost in an ocean of verbiage. Far better to lay down broad goals and prescribe only what is strictly necessary to achieve them. Legislators should pass simple rules, and leave regulators to enforce them."
The author isn't talking about no regulation. He is talking about exactly what I am talking about, which is cutting out a ton of crony capitalism through cutting out regulation.
I suppose it couldn't hurt to simplify regulation, not remove any, just make it easier for businesses and the government to understand.
I really dislike how people don't take any time to think about these arguments. I can understand being for regulation, but the mentality a lot of people have here is just irrational and uneducated. Many of the arguments here lack intellect. I'm going to blame it on the fact that most people are ignorant of economics and will not trust economic reasoning and evidence. There is certainly reason to be skeptical of a lot of economic ideas, but people seem to reject the most basic and well rationalized economic theory.
[QUOTE=Pepin;34749590]I really dislike how people don't take any time to think about these arguments. I can understand being for regulation, but the mentality a lot of people have here is just irrational and uneducated. Many of the arguments here lack intellect. I'm going to blame it on the fact that most people are ignorant of economics and will not trust economic reasoning and evidence. There is certainly reason to be skeptical of a lot of economic ideas, but people seem to reject the most basic and well rationalized economic theory.[/QUOTE]
Please be more specific and don't give a pretentious non-answer. Stop using so many weasel words.
On-topic, I strongly agree that legal legislation needs to stop being written in ridiculous legalese. A good example of how to write laws in an actually readable format is [URL=http://creativecommons.org/licenses/by/3.0/]this[/URL]. People (i.e. lawyers and businessmen) are so anal about being as specific as possible and relying on technicalities to get their way.
What theory would that be Pepin
How about the theory of black-hole-money-suction-bailout-power due to rampant corrupt business practices allowed by deregulation?
[QUOTE=certified;34745578]Yeah, I agree, we should go back to laissez-faire!
Don't you see, it's a better future for all!
[IMG]http://thyblackman.com/wp-content/uploads/2011/07/nword4u.gif[/IMG]
[B][I][U]NOPE.[/U][/I][/B]
Regulation is here to stay. Remember what happened last time when America had L-F-Capitalism? Children missing limbs, cancer, lung diseases, a diseased, dying, and starving population, not to mention SLAVERY. Yeah, sorry, but LF Capitalism creates suffering for the common man while the rich continue to fill their coffers and live in luxury. [del]VIVA LA COMMUNISM[/del][/QUOTE]
Look Laisse-faire is an objectively bad economic theory, we all know that. But...
you are an absolute idiot. This article, despite mentioning Laisse-faire in it's title, actually states support for regulation and barely mentions it. You read the title and instantly went "I know what that is it's bad I'm not going to read the article I'm just gonna post now". Not only that, but your post was blatantly ignorant. I'm not even sure you know what Laisse-faire is. Slavery was by no god damned means even remotely related to Laisse-faire. I don't even know how you came to that conclusion. Your blatant demonization of Laisse-faire is also a blatant pile of non-facts, insane exclamations and general bullshit. I'm honestly depressed that I agree with you on the basic message of your post.
[QUOTE=Xystus234;34749727]How about the theory of black-hole-money-suction-bailout-power due to rampant corrupt business practices allowed by deregulation?[/QUOTE]
Just because the deregulation process was done inefficiently and by special interest groups doesn't mean that deregulation was the cause of corruption
[editline]17th February 2012[/editline]
In fact, if you really think laissez faire is a big corporation's wet dream, then someone like Ron Paul would have a lot more traction with businesses than someone like [url=http://articles.cnn.com/2010-04-20/politics/obama.goldman.donations_1_obama-campaign-presidential-campaign-federal-election-commission-figures?_s=PM:POLITICS]Obama[/url]
[QUOTE=SomeRandomGuy16;34749908]Just because the deregulation process was done inefficiently and by special interest groups doesn't mean that deregulation was the cause of corruption
[editline]17th February 2012[/editline]
In fact, if you really think laissez faire is a big corporation's wet dream, then someone like Ron Paul would have a lot more traction with businesses than someone like [url=http://articles.cnn.com/2010-04-20/politics/obama.goldman.donations_1_obama-campaign-presidential-campaign-federal-election-commission-figures?_s=PM:POLITICS]Obama[/url][/QUOTE]
Ron Paul is not a solution.
[QUOTE=HumanAbyss;34750115]Ron Paul is not a solution.[/QUOTE]
When did I ever say that he was
[QUOTE=SomeRandomGuy16;34750139]When did I ever say that he was[/QUOTE]
Just seemed like that. But I'm just stating that.
[QUOTE=HumanAbyss;34750165]Just seemed like that. But I'm just stating that.[/QUOTE]
I was just pointing out that the big corporations don't seem to want laissez faire, contrary to popular belief on FP. This is because the regulations often favor big business and don't allow the smaller companies to compete
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