No, overregulation isn’t crushing the American free market


Here’s House Speaker Mike Johnson:

“We want to take a blowtorch to the regulatory state. These agencies have been weaponized against the people. It’s crushing the free market; it’s like a boot on the neck of job creators and entrepreneurs and risk takers. And so health care is one of the sectors, and we need this across the board.” 

This is one of those geriatric hobby horses Republicans love to ride. Kevin Drum is having none of it, and he brings the receipts:

“I'm hardly in favor of regulation willy nilly, but all the evidence suggests that it hasn't hurt much of anything. Business applications in the US continue to rise. Our economic growth is the best among advanced countries. Construction spending has skyrocketed. The finance industry continues to make mountains of money. Innovation is strong. Business profits as a share of the economy have nearly doubled over the past two decades.

“At the same time, air and water quality has improved tremendously over the past 50 years. Industrial accidents have declined. Consumer protection is stronger. Seat belts and air bags save thousands of lives a year.”

*snip*

 

“Regulations often harm small companies more than deep-pocketed big ones. The deregulation of trains, planes, trucks and telephones was reasonably successful. (Deregulation of the savings and loan industry less so.)”

The five states that allegedly have the most regulation (CA, NY, NJ, IL and TX) have a combined GDP per capita a third higher than the least regulated ones (ID, SD, ND, MT and NV), and both have the same growth rate.

 

On the other hand, the market actually benefits from regulation because:

 

• it allows consumers to trust the products being offered by people they do not know personally;
• it ensures that the consumers have all the information they require to make informed decisions, and to know that information is accurate and has been controlled;
• it makes the rules of a competitive market clear to stop unfair practices.

 

The cost of using litigation to resolve these things (as Glibertarians seem to think will resolve these issues) is exorbitant (much higher than regulation).


https://jabberwocking.com/we-dont-need-to-take-a-blowtorch-to-regulations/

 

 

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