Regulation........
This is an excellent Op Ed piece which I completely agree with.
In fact this guy says exactly what I say all the time.
The only difference is I post it here and it mostly gets ignored. This guy makes the same points and the NY Times can’t wait to print it for millions to read.
Oh well.
Maybe this guy is more effective.
http://opinionator.blogs.nytimes.com/2013/12/08/what-obama-left-out-of-his-inequality-speech-regulation/?_r=0
History tells us that in periods when protective governmental institutions are weak, irresponsible companies tend to abuse their economic freedom in ways that harm ordinary workers and consumers. The victims are often less affluent citizens who lack the power either to protect themselves from harm or to hold companies accountable in the courts. We are in such a period today.
Three decades of deregulation and restrictions on legal liability had given companies greater freedom to innovate and expand. But irresponsible companies also had greater freedom to subject their workers to unsafe working conditions, to market predatory loans to desperate borrowers, to sell defective toys and automobiles, to discharge toxic pollutants, to invade the privacy of Internet users, to market unsafe food, drugs and medical devices, and to subject the world economy to systemic risks.
The laissez-faire culture that prevailed in both government and the private sector so deeply discounted risks to workers, consumers, the environment and the financial system that a series of crises was inevitable.
The deadly oil refinery explosion in Texas City, Tex., in 2005, the financial sector meltdown of 2007-8, the Upper Big Branch mine catastrophe in West Virginia and the Deepwater Horizon oil spill, both in 2010, multiple disease outbreaks because of contaminated peanuts, eggs, hamburgers and seafood, and dozens of motor vehicle and toy recalls were just a few of the visible consequences of the laissez-faire mentality that has pervaded the American political economy.
Less visible, but equally devastating, were the heart attacks caused by poorly regulated painkillers, the quiet desperation of millions of “underwater” homeowners who owed more in mortgage debt that their homes were worth, and the subtle but steady and irreversible increase in global temperatures as a result of carbon emissions.
The laissez-faire revival also contributed to the growing disparities in wealth and well-being that became painfully obvious during the last decade. While corporate executives, Wall Street bankers and hedge fund managers greatly benefited from the three waves of assault on regulation, the fortunes of blue-collar workers and the working poor steadily declined. Median incomes have fallen over the last decade.
The disparities brought on by the laissez-faire revival, however, go far beyond the vast disparities in income and wealth. It is of fairly small consequence to the disabled miner whose boss violated federal safety standards that the mining company’s revenues, profits and executive bonuses are on the rise. But the disparity becomes unconscionable when lax pension-protection regulations let the company spin off its “legacy liabilities” (pension and health-insurance guarantees) into an undercapitalized shell for the sole purpose of filing for bankruptcy protection.
Not all of the adverse effects of the laissez-faire revival have fallen disproportionately on the middle class and the poor. Lax regulation of airplanes is as risky for passengers in first and business class as in coach. The rich and poor suffer from the side effects of hastily approved prescription drugs. But the overall burden of deregulation is borne by those least able to carry it.
The chief executive of the giant meat producer does not have to worry about losing a finger or contracting carpal-tunnel syndrome as he attempts to extract more “efficiency” from a poultry processing plant by persuading the Department of Agriculture to allow the company to speed up production lines. The health of few rich people is at risk from the plumes of unregulated toxic emissions that migrate through neighborhoods adjacent to large petrochemical complexes. The affluent tend not to live so close to railroad tracks as to be affected by toxic gases escaping from derailed tank cars.
Wealthy people injured by defective products can afford to hire lawyers to sue the responsible companies. Not so the middle class and the poor, who must rely on attorneys working on a contingency-fee basis. The caps on damages and restrictions on liability that state legislatures have enacted at the behest of big business make it very difficult for potential attorneys to justify taking on many entirely valid claims. Unless they are severely injured and incur enormous medical expenses, ordinary people are effectively deprived of their right to recover damages in court.
The recent confluence of crises undermined the bedrock assumptions of laissez-faire minimalism. The stage was set after the 2008 elections to recapture the spirit of reform that permeated the Progressive, New Deal, and Public Interest Eras and to enact fundamental changes to reduce short-term profit incentives and enhancing the public good. After all, the economy had been nearly destroyed as a direct result of reckless risk-taking by financial institutions, enabled by decades of deregulation.
Unfortunately, far-reaching reforms have not been forthcoming. The business community’s idea infrastructure shifted to defensive mode and — with help from lavish corporate spending to influence elections — beat back the most significant reform proposals of the Obama administration and congressional Democrats, like the suggestion that giant banks be broken up because they are not only too big to fail, but also too big to manage or regulate.
Instead of comprehensive change, Congress settled for patch-and-repair reforms. The Dodd-Frank financial reform act and the Food Safety Modernization Act, both enacted in 2010 while Democrats still controlled both houses of Congress, were, to be sure, important attempts to fix badly broken regulatory programs. But neither statute will bring about fundamental changes in the underlying incentive structures that ultimately determine the behavior of regulated companies and industries. And the agencies charged with implementing those reforms have made only modest progress.
We are now in the midst of a fourth assault on regulation, following the 2010 midterm elections. Having failed to seize the initiative in 2009, the Obama administration has done very little to deflect that assault. Rather than rising to the defense of beleaguered regulatory agencies, the president hosted a closed-door “summit meeting” with 20 chief executives of major corporations, where he promised to work more closely with the business community. He then ordered all regulatory agencies to review all previously issued rules with an eye toward “streamlining” or eliminating as many as possible.
The business community has emerged virtually untouched from a confluence of crises that in previous eras would have resulted in profound redistributional changes. For this surprising development, the idea and influence infrastructures that conservative foundations and corporate America carefully created over a 35-year period can claim much of the credit.
That gets us back to Mr. Obama’s speech last week. While he touched on many of the macroeconomic forces driving the surge in inequality since the 1970s — skill-biased technological change, the dismantling of American manufacturing, the globalization of commerce and finance, and a “trickle-down” ideology of tax cuts for the rich — he barely mentioned regulation.
Sadly, the crises resulting from deregulation will almost certainly continue until political forces realign themselves and a new social bargain is struck under which the business community’s economic freedoms are once again constrained by a government that is more willing to impose greater responsibilities on powerful economic actors and a legal system that is capable of holding them accountable for the harm that they cause. Until then, a crucial check on the seemingly inexorable advance of economic inequality will be missing.
In fact this guy says exactly what I say all the time.
The only difference is I post it here and it mostly gets ignored. This guy makes the same points and the NY Times can’t wait to print it for millions to read.
Oh well.
Maybe this guy is more effective.
http://opinionator.blogs.nytimes.com/2013/12/08/what-obama-left-out-of-his-inequality-speech-regulation/?_r=0
History tells us that in periods when protective governmental institutions are weak, irresponsible companies tend to abuse their economic freedom in ways that harm ordinary workers and consumers. The victims are often less affluent citizens who lack the power either to protect themselves from harm or to hold companies accountable in the courts. We are in such a period today.
Three decades of deregulation and restrictions on legal liability had given companies greater freedom to innovate and expand. But irresponsible companies also had greater freedom to subject their workers to unsafe working conditions, to market predatory loans to desperate borrowers, to sell defective toys and automobiles, to discharge toxic pollutants, to invade the privacy of Internet users, to market unsafe food, drugs and medical devices, and to subject the world economy to systemic risks.
The laissez-faire culture that prevailed in both government and the private sector so deeply discounted risks to workers, consumers, the environment and the financial system that a series of crises was inevitable.
The deadly oil refinery explosion in Texas City, Tex., in 2005, the financial sector meltdown of 2007-8, the Upper Big Branch mine catastrophe in West Virginia and the Deepwater Horizon oil spill, both in 2010, multiple disease outbreaks because of contaminated peanuts, eggs, hamburgers and seafood, and dozens of motor vehicle and toy recalls were just a few of the visible consequences of the laissez-faire mentality that has pervaded the American political economy.
Less visible, but equally devastating, were the heart attacks caused by poorly regulated painkillers, the quiet desperation of millions of “underwater” homeowners who owed more in mortgage debt that their homes were worth, and the subtle but steady and irreversible increase in global temperatures as a result of carbon emissions.
The laissez-faire revival also contributed to the growing disparities in wealth and well-being that became painfully obvious during the last decade. While corporate executives, Wall Street bankers and hedge fund managers greatly benefited from the three waves of assault on regulation, the fortunes of blue-collar workers and the working poor steadily declined. Median incomes have fallen over the last decade.
The disparities brought on by the laissez-faire revival, however, go far beyond the vast disparities in income and wealth. It is of fairly small consequence to the disabled miner whose boss violated federal safety standards that the mining company’s revenues, profits and executive bonuses are on the rise. But the disparity becomes unconscionable when lax pension-protection regulations let the company spin off its “legacy liabilities” (pension and health-insurance guarantees) into an undercapitalized shell for the sole purpose of filing for bankruptcy protection.
Not all of the adverse effects of the laissez-faire revival have fallen disproportionately on the middle class and the poor. Lax regulation of airplanes is as risky for passengers in first and business class as in coach. The rich and poor suffer from the side effects of hastily approved prescription drugs. But the overall burden of deregulation is borne by those least able to carry it.
The chief executive of the giant meat producer does not have to worry about losing a finger or contracting carpal-tunnel syndrome as he attempts to extract more “efficiency” from a poultry processing plant by persuading the Department of Agriculture to allow the company to speed up production lines. The health of few rich people is at risk from the plumes of unregulated toxic emissions that migrate through neighborhoods adjacent to large petrochemical complexes. The affluent tend not to live so close to railroad tracks as to be affected by toxic gases escaping from derailed tank cars.
Wealthy people injured by defective products can afford to hire lawyers to sue the responsible companies. Not so the middle class and the poor, who must rely on attorneys working on a contingency-fee basis. The caps on damages and restrictions on liability that state legislatures have enacted at the behest of big business make it very difficult for potential attorneys to justify taking on many entirely valid claims. Unless they are severely injured and incur enormous medical expenses, ordinary people are effectively deprived of their right to recover damages in court.
The recent confluence of crises undermined the bedrock assumptions of laissez-faire minimalism. The stage was set after the 2008 elections to recapture the spirit of reform that permeated the Progressive, New Deal, and Public Interest Eras and to enact fundamental changes to reduce short-term profit incentives and enhancing the public good. After all, the economy had been nearly destroyed as a direct result of reckless risk-taking by financial institutions, enabled by decades of deregulation.
Unfortunately, far-reaching reforms have not been forthcoming. The business community’s idea infrastructure shifted to defensive mode and — with help from lavish corporate spending to influence elections — beat back the most significant reform proposals of the Obama administration and congressional Democrats, like the suggestion that giant banks be broken up because they are not only too big to fail, but also too big to manage or regulate.
Instead of comprehensive change, Congress settled for patch-and-repair reforms. The Dodd-Frank financial reform act and the Food Safety Modernization Act, both enacted in 2010 while Democrats still controlled both houses of Congress, were, to be sure, important attempts to fix badly broken regulatory programs. But neither statute will bring about fundamental changes in the underlying incentive structures that ultimately determine the behavior of regulated companies and industries. And the agencies charged with implementing those reforms have made only modest progress.
We are now in the midst of a fourth assault on regulation, following the 2010 midterm elections. Having failed to seize the initiative in 2009, the Obama administration has done very little to deflect that assault. Rather than rising to the defense of beleaguered regulatory agencies, the president hosted a closed-door “summit meeting” with 20 chief executives of major corporations, where he promised to work more closely with the business community. He then ordered all regulatory agencies to review all previously issued rules with an eye toward “streamlining” or eliminating as many as possible.
The business community has emerged virtually untouched from a confluence of crises that in previous eras would have resulted in profound redistributional changes. For this surprising development, the idea and influence infrastructures that conservative foundations and corporate America carefully created over a 35-year period can claim much of the credit.
That gets us back to Mr. Obama’s speech last week. While he touched on many of the macroeconomic forces driving the surge in inequality since the 1970s — skill-biased technological change, the dismantling of American manufacturing, the globalization of commerce and finance, and a “trickle-down” ideology of tax cuts for the rich — he barely mentioned regulation.
Sadly, the crises resulting from deregulation will almost certainly continue until political forces realign themselves and a new social bargain is struck under which the business community’s economic freedoms are once again constrained by a government that is more willing to impose greater responsibilities on powerful economic actors and a legal system that is capable of holding them accountable for the harm that they cause. Until then, a crucial check on the seemingly inexorable advance of economic inequality will be missing.
posted by res17 at
December 10, 2013
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