Regulation necessary to keep businesses in check
Item: The CEO of Volkswagen has resigned after revelations that his company committed fraud on an epic scale, installing software on its diesel cars that produced deceptively low emissions results.
Item: The former president of a peanut company has been sentenced to 28 years in prison for knowingly shipping tainted products that later killed nine people.
Item: Rights to a drug used to treat parasitic infections were acquired by Turing Pharmaceuticals, which specializes not in developing drugs but in buying existing drugs and jacking up their prices. In this case, the price went from $13.50 a tablet to $750.
No doubt I, like anyone who points out ethical lapses on the part of some companies, will be accused of demonizing business. But there are people in the corporate world who will do whatever it takes to make a buck. And we need effective regulation to police bad behavior, not least so that ethical businesspeople aren’t at a disadvantage when competing with less scrupulous types. But we knew that, right?
Well, we used to know it. But Ronald Reagan insisted that government is always the problem, never the solution, and this has become dogma on the right.
As a result, too many important players now argue, in effect, that business can do no wrong and that government has no role to play in limiting misbehavior.
A case in point: This week Jeb Bush, who has an uncanny talent for bad timing, chose to publish an op-ed in The Wall Street Journal denouncing the Obama administration for issuing “a flood of creativity-crushing and job-killing rules.” Never mind the fact that private-sector employment has grown much faster under President Barack Obama’s “job-killing” policies than it did under Bush’s brother’s administration.
What are the terrible, unjustified regulations Bush proposes to scrap?
Carbon regulation must go, of course. So must Obamacare.
But Bush also proposes doing away with rules regarding the disposal of coal ash, a byproduct of coal-burning power plants that contains mercury and other contaminants. And he denounces the administration for “regulating the Internet as a public utility,” which can sound odd until you realize that what’s actually being regulated are Internet service providers, who often face little or no competition.
Last but not least, Bush calls for a rollback of financial regulation. Because why should we think that letting banks run wild poses any risks?
The thing is, Bush isn’t wrong to suggest that there has been a move back toward more regulation under Obama, a move that will probably continue if a Democrat wins next year. After all, Hillary Clinton released a plan to limit drug prices at the same time Bush was unleashing his anti-regulation diatribe.
But the regulatory rebound is taking place for a reason. We’ve now spent 35 years trusting business to do the right thing with minimal oversight — and it hasn’t worked.
So what has been happening is an attempt to replace knee-jerk opposition to regulation with the judicious use of regulation where there is reason to believe that businesses might act in destructive ways. Will we see this effort continue? Next year’s election will tell.