Right wingers like to blame our lack of economic growth on excessive government regulations. While I would agree that there are likely plenty of regulations on the books that could be repealed without harming consumers, the truth is that we have plenty of big problems with industries that are under-regulated and cases where regulations are not enforced. All too often, this occurs when the people who suffer are poor. Here are a couple of examples.
In the first case, the LA Times published a three part series on Buy Here Pay Here car dealerships, which sell cars under a model similar to rent to own furniture stores. This industry is mostly unregulated, and involves loaning money to desperate car buyers at usurious rates. Many customers default on their loans and the cars are repossessed and sold to the next person doc one along.
In the second case, NPR and the Center for Public Integrity produced a multi-part series on how clean air regulations are not preventing industrial plants from discharging massive amounts of air pollution and damaging people’s health, mostly due to lax enforcement. Activists in Tonawanda, New York fought for thirty years to curb pollution from a nearby plant. The plant, in the meantime, systematically deceived regulators and continued its polluting ways. For all the talk of excess regulation, the plant remains open and is still producing pollution, albeit at a lower level.
For all the talk I hear about excessive regulation, what I read a lot of are stores about insufficient regulation. It’s also worth pointing out this Treasury Department blog post that examines what an economy that’s stagnating due to regulatory uncertainty might look like, and argues that the US economy is not showing those symptoms.
On a related topic, I found Tyler Cowen’s theory that regulatory enforcement depends more on the number of regulators rather than the number of regulations to have interesting implications. There’s an argument to be made that to implement an effective regulatory regime, it’s just as important to get rid of useless old regulations as it is to implement new ones.