Thread: The Myth About the High Cost of Regulations

I find it ironic the more that some from the far-right continue to complain about the "left", the more appealing it sounds. Just imagine a government which actually responds to the demands and needs of the voters instead of the corporations and the rich. Nah, it's a pipe dream in this country anymore.

Originally Posted by timj219

But that's not really the issue is it? The claim regularly made by business owners and their politicians is that regulations offer no benefit and impose a cost so dire that it will at best eliminate jobs and probably drive businesses in to bankruptcy. Of course a government regulation has some cost. Conditions imposed by market forces have a cost too. Every time you want to get one person's money in to your pocket using someone else's labor there is going to be a cost.

The argument being made by business owners is that only those regulations which are imposed by government (and that were not actually requested and written by the particular industry lobby doing the complaining) are evil job (profit) killing things with no redeeming qualities.

Sorry it took so long to get back to this one.

I think it is the issue if one is going to start a thread making an argument about "The Myth About the High Cost of Regulations." It opens a debate about the nature of government regulations, or a call on them being about the protection of something (or some group) vs. political intentions. We already pick dozens of winners and losers through regulations, perhaps better said who has help and who does not.

The Durbin Amendment of the Dodd-Frank Act comes to mind with the amendment only applying to banks with over $10 billion in assets as opposed to just applying to all banks dealing in debt card interchange fees. In that regulation an argument can be made that right or wrong those banks targetted by the amendment now have a cut of profit removed directly by the amendment making those Banks change gears to find the difference. There was some illusion by those supporting the amendment that the banks targetted (which they were targetted by size) would walk away from those profits. Everyone flipped out with the expected result of Bank of America, Wells, Citi, and a handful of others going after account fees has direct response to this regulation (that shift from buisness paying the higher fees to the individual account holders in those banks paying the difference.) We could have a similar debate on the EPA regulating "dust" potentially effecting output costs from farming, ranching, etc. And another similar debate on the cost impact to businesses involved with the HIPAA security rules governing the security of healthcare data. All of those examples may have good intentions but came with a cost for business, then passed to the consumer or industry, to absorb.

The point is in those example regulations (or in the case of the EPA, policy) will have a direct effect on the cost of doing buisness changing the business model. Right or wrong I am not really arguing for the purpose of this thread. But what I am arguing is the point of regulations is to implement policy changing the model for those involved in the industry targetted. Protect the environment, protect a group of people, remove profits coming at the expense of small businesses, protect healthcare data, etc... but it all comes down to changing how business is done with restrictions and guidelines which you cannot avoid will effect costs. There may be the political position that just boils down to "tough shit" for those with higher costs but it is absent of any reality to assume that Regulations do not come with costs (again, both intended and unintended.)

I am not arguing for no Regulations, don't get me wrong as we clearly need them to deal with the type of economy we have these days. But, I do feel we have entirely too much regulation in many areas and it does effect both the cost of business and the prices ultimatly consumers pay for goods and services. You cannot avoid that in an economy designed to only show growth when a diminishing middle class takes on an increasing level of consumer debt. That is an accurate statement to the status of the very damaged middle class these days. In my opinion the government is very culpable as it is more about protecting political interests these days over any real genuine honest intention to right a problem. I do apply that to both those with (D) and (R) behind their names as they both invent things that ultimately continue to damage what is left of the middle class.

I believe the $10B limit on the Durbin Amendment to the Todd-Franklin Act was deliberately set so as not to require all banks to adhere to the red tape requirements of a problem which only plagued the greediest and largest banks, and which they did not do because they wish to remain competitive. Was it not?

Your other examples appear to be just as bad. Who doesn't want their healthcare records protected so they are not discriminated against when they need to find a new job? Who wants to suffer asthma attacks in counties which are too stupid to take reasonable cost-effective measures to control excessive dust?

Granted, some regulations are indeed dishonest attempts to subvert and control minor companies from competing with those larger corporations which want monopolies in their respective fields. And those should obviously be opposed. But complaining that we don't need regulation in a period where drastically needed regulations are being deliberately destroyed to accommodate the rich and powerful is disingenuous at best. There really aren't very many really stupid regulations anymore. Those were weeded out long ago. What remains is an attempt to remove even more useful regulations under the pretense of "small government".

Originally Posted by Formaldehyde

I believe the $10B limit on the Durbin Amendment to the Todd-Franklin Act was deliberately set so as not to require all banks to adhere to the requirements of a problem which only plagued the greediest and largest banks. Was it not?

Your other examples appear to be just as bad. Who doesn't want their healthcare records protected so they are not discriminated against when they need to find a new job? Who wants to suffer asthma attacks in counties which are too stupid to take reasonable cost-effective measures to control excessive dust?

You clearly did not read my post and have resorted to trolling.

I was not debating if each was needed or not, as in supportive or not. I said for the purpose of this thread I was just talking about regulations and cost. I was showing, with a few examples, regulations effecting the cost of business models generally passed onto the consumer (or industry.) I even clearly said I was not for removal of all regulations, or even the ones I named, given the nature of the economy these days. Just that we have too much regulation (and policy) which is making matters worse.

Given that you apparently admit your own examples are not those which should be removed, let's see some reasonable examples of "too much regulation (and policy) which is making matters worse". Regulations and their enforcement clearly cause greater cost to those which it directly affects. The real issue is when it is obviously not warranted and when those costs are not largely or completely counterbalanced by reduced costs in other areas or by the population in general.

Originally Posted by Formaldehyde

Given that you apparently admit your own examples are not those which should be removed, let's see some reasonable examples of "too much regulation (and policy) which is making matters worse". Regulations and their enforcement clearly cause greater cost to those which it directly affects. The real issue is when it is obviously not warranted and when those costs are not largely or completely counterbalanced by reduced costs in other areas or by the population in general.

Why? More to the point and in line with my other posts, why does it have to matter at all if I or you agree with the Regulation in question or not? Go open another topic and we'll discuss the importance of each item. Here we seem to be discussing Regulations adding to cost and my post matches that, if we agree they are needed or not does not seem to be what we are discussing. You are the one debating something else.