Re: The Myth About the High Cost of Regulations
Sorry it took so long to get back to this one.
Originally Posted by timj219
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.
Last edited by Sluggo; 12-11-2011 at 08:11 AM.
- Frustrated Independent
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin
"Every time something really bad happens, people cry out for safety, and the government answers by taking rights away from good people.” - Penn Jillette amazingly enough, and I agree.