According to a recent article in the Economist, the United States has become “America the Overregulated,” and that’s quite a claim, especially from a British publication. There’s been a great deal of rhetoric about the amount of “unnecessary” federal regulations, particularly from the far right, but also across the political spectrum. Given the opposition to excessive regulation, why does it continue?
The simple, and largely accurate, answer is because there’s political pressure for more regulations to protect everything from workers to threatened and endangered species. Personally, I believe the majority of that pressure comes because of real concerns, but that raises another question. Why do we need regulations to deal with these concerns?
That’s where matters get interesting. One reason often cited is that, in a world economy, goods are purchased largely on price, and companies will do anything they can to keep costs down – unless effective regulations preclude practices that are unsafe, unhealthy, polluting, or environmentally degrading. Yet… over the past two years, U.S. corporate profits have soared, while wages have remained largely stagnant. At the same time, more and more wealth and income have gone to the top 1/10th of one percent of the U.S. population. People – those who have jobs – are working harder and longer, and usually under more stress, just to keep what they have… but the rich get richer.
Maybe… just maybe, we’ve been looking at only part of the problem. Would all of those regulations be necessary if there weren’t so much pressure to be more and more profitable? And that such profitability depends on lower costs and greater productivity? What if those at the top of the pyramid, and I’m talking about the 1/10th of one percent, not the top one or two percent, didn’t get to keep over 85% of their income?
Would investment bankers and CEOs be quite so inclined to push everything and everyone to the wall to get their $100 million bonuses if the government took 90% of everything over, say, $10 million?
A study from the University of Southern California found that a high percentage of young investment bankers who worked 80-120 weeks developed a wide range of stress-related illnesses and conditions that would likely reduce their life expectancy and that such conditions contributed to the high rate of burn-out in the field. We’ve also seen a huge growth in the use of steroids and other substances that build muscles in young adulthood, especially for young men seeking a professional athletic career, but such artificially enhanced muscular abilities almost invariably result in early death among those who wish to be professional athletes. Would the temptation be quite so great, if 90% of those $10-$100 million contracts went to the government? Would all the outsourcing take place if there weren’t so much pressure to be more and more profitable?
It seems to me that a great deal of the excesses in our society have been driven by greed… but if government were the beneficiary of the greatest excesses of that greed… would the pressures be so great to cut all the corners? Would regulation after regulation be so necessary to curb the excesses of the financial sector? Or to protect workers from greater and greater pressure to produce more and more with less and less?
Just a thought.