Just like the free trade debacle clearly many people promoting the current regulatory system are sincere. In fact the tragedy is that they are sincere. They have become another vested interest group only driven by pride instead of money. Unable to admit they are wrong in spite of reams of contrary data they continue to march like lemmings over the cliff of destruction by promote bad policies. In some ways these sincere and sometimes gullible people are the most insidious threat to our economy. You really can’t reason with a ‘true believer”.

Finally there is the manipulation of our education system. Once you fill it with true believers who teach dogma rather than reason or facts then you effectively indoctrinate whole generations with this kind of nonsense. The result is a kind of pseudo “common sense” that pervades the electorate making their manipulation just that much easier.

The dire consequences of this regulatory situation are poorly run companies (e.g., the auto industry), lack of competitiveness, market manipulation and often bankruptcy. Companies run by accountants in a non-competitive market and which rely on market manipulation to maintain profits become bloated with inefficiency and complacency. When the market changes they are unable to adapt and either die or ask for even more government bailouts. Sometimes a hard dose of reality is required instead of a bailout.

In terms of what can be done I’m not hopeful. Clearly we need a balance between effective regulation and over regulating which causes economic strangulation. Regrettably there are powerful special and vested interests against any kind of meaningful reform and they have an array of time tested effective weapons they can deploy to prevent reform (such is the power of human nature). In order to fix things first you have to be honest with yourself and admit when you are wrong. Speaking from personnel experience I can tell you it is extremely hard to shed your preconceived notions and objectively try to look at a situation. It is just so hard to admit you’ve been wrong for so long but if you don’t then your pride makes you one of the most devastating and pernicious vested interests! As for the next step? Personally I can think of only one method which may work; namely throw the rascals out!

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Tags: Economics, free trade, politics

This entry was posted on Tuesday, November 10th, 2009 at 5:11 pm and is filed under Economics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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