It is not uncommon to hear the right complaining about the “government controlling their lives”. Most are not talking about radio transmitters being planted in the their brains (yet ) but their proof invariably hinges on regulation. If you listen to them, regulation is controlling them from morning ’till night. We rarely hear what regulations are making them so miserable. If you cannot understand their dilemma in the simple recognition which comes with the word ‘regulation’ then you are not one of them. The assumption they have seems to be that regulation comes from the big, bad, bureaucratic, government man from above. This boogie man has the same position as Satan in Christianity. He is responsible for all ills in human society. He has nothing better to do than torture all the hapless creatures on earth. There actually is a medical condition for these folks caused by an overactive amygdale.1
The truth is that regulation does not fall from heaven or ascend from hell. Regulation bubbles up from the electorate and corporations.
A plane crashes. People fly on planes. People want some assurance that their plane will not crash so we get the FAA.
Pollution starts giving people cancer in a highly industrial region. People do not want cancer. People do not trust the corporations telling them not to worry because it is not the corporation’s fault. People want assurance that someone else more objective is looking out for them so we get the EPA.
The banking industry starts making risky loans. The bank fails. People do not want to show up at the bank only to see that the doors are locked, the lights are off and there is no one to call to get their deposited money back. This is why we have banking regulation.
De-regulated financial markets start bundling up packages of people’s home mortgages into bonds. The whiz kids doing this figure out that they can get more money for these packages if their bond rating is higher. They come up with some fancy math no one understands to show that the risk for losing money on these packages is small, even though there are seemly larger and larger numbers of risky loans making up these packages. They also figure out that wining and dining these private rating agencies goes a long way towards getting them better bond ratings. Before long these seemingly fantastic, low risk, high yield packages are running out of mortgages needed to create them. The whiz kids get another idea, “let’s create a market that will make getting mortgages easier than getting candy out of a vending machines…folks can get mortgages to get money to do whatever they want to do…who can turn down free money?” When the market blows up and causes a deep recession people want someone to keep it from happening again, to do something about it, so we get financial regulation, again. The whiz kids get bonuses for their hard work crashing the economy and their last great idea is to blame the government for causing the recession in the first place.
Kids get a new toy. The put the toy in their mouth. They get lead poisoning. People do not want their kids to get lead poisoning so they demand a Consumer Product Safety Commission.
People get Ebola. People do not want to get Ebola. People demand that the CDC do something about it. They even demand that the government regulate the people coming from those Ebola countries by isolating them for weeks.
Regulation also comes from large and powerful companies that want to reduce competition, drive others out of their market, keep prices and margins high and also, at times, to keep substandard or dangerous products out of the market. The companies have deep pockets. They fund political campaigns. When their candidates get in office they expect payback. They get the regulations they want . This is called cronyism or corporatism.2 Some economic whiz kids come along and tell us that the government is the one that made cronyism possible. If the government were not around to interfere with the workings of the ‘free’ market there would be no corporatism. Well, that is ostensibly true since corporatism is defined as,
a system of running a state using the power of organizations such as businesses and labor unions that act, or claim to act, for large numbers of people3
It does not take a whiz kid to know, no government – no corporatism. However, a couple problems arise after this: 1) It is not possible to have a government which in no way interacts with the market 2) If the market did not have a government it would have to create one. Of course, the whiz kids, with dubious motives, assure us that the closer we come to an ineffective, non-infringing government on the market, the more the market will take cares of us…sort of like evolution where, you know, the strong survive. What they are really telling us is that the new government, the laissez-faire (fancy French name for let the market decide) government will do a much better job at taking care of us. Trust the market to keep planes from crashing, pollution from killing us, bankers from stealing our hard earned money, financial whiz kids from wizzing all over us, kids from eating lead, people from getting Ebola or any of the nasty viruses and bacteria. Oh, and we all know corporations would have no capability to manipulate the market like in the Gilded Age, monopolies, etc. because the market would decide not to let them do that – right?
Well, now that we have established the fact the government is the big, bad, boogie man otherwise known as Satan and the ‘free’ market is the saint of evolution, I guess we can go vote for…you know who!
_________________
1 See The Conservative and Liberal Brain
2 See Formalism: When a Lie Becomes Truth (really)
3 Encarta Dictionary: English (North America)