Monday, May 27, 2024

The De-Regulation Bamboozle

Chief WATB, Jamie Dimon
Chief WATB, Jamie Dimon

If you were to ask your basic, stereotypical CEO crybaby, such as Jamie Dimon, what the biggest threat to freedom is, they would undoubtedly answer “regulation.” Because, you know, there’s nothing worse than asking corporations play by the rules.  But the issue of de-regulation, currently a huge fad on Capitol Hill, runs far deeper than just a threat to Dimon’s delicate ego.  De-regulation is a major risk to us, the taxpayers.  Even if you’re a “freedom lovin’ real ‘merican” teabagger, you should be greatly concerned about de-regulation.  Let me tell you why.

Allow me to use an example to easily illustrate our issue.  Let’s say, for example, there’s a company called Kock Industries (Kock).  Kock is a massive polluter, releasing all sorts of carcinogenic goodness via air and water.  Now, let’s give that pollution an energy approved name, such as lovemal.  Lovemal causes cancer in children and the elderly, and it’s released via the air.

During the 2011 Congressional session, let’s imagine the Republicans were able to choke off funding to the EPA, allowing companies such as Kock the ability to pollute the air with all-loving lovemal.  As a result of Kock’s new-found ability to pollute, five children now have, let’s say, lung cancer.  Now, if you’ve ever had a loved one die of lung cancer – and I’ve had two! – it’s an absolutely horrible way to die.  But in the interest of free enterprise and freedom-loving, Kock’s pollution has made five children sick.

Here’s where it gets sticky for us, as taxpayers.  Let’s first assume we don’t give the slightest darn that five children, because of lovemal, have lung cancer.  After all, free enterprising Americans believe in the free market, and the free market will dictate that we have other energy choices besides Kock, even though they are a monopoly.  Invisible hand, right?  So, who pays for the care of those five children?  Why, we taxpaying Americans do, through some sort of Communist system such as CHIP or something equally devious.  Before these children die in excruciating, but freedom-loving, pain each one cost taxpayers $1MM in medical expenses.  Which, of course, is why corporations hate regulation.

The lack of thoughtful, effective regulation socializes risk and privatizes profits.

Can I make this anymore clear?  Kock did not have to regulate their pollution, and normal people are forced to pay for the consequences.  How about the recent financial crisis?  The Jamie Dimons of the world gambled their money on risky investments, and it was the government that was forced (for some reason) to clean up their mess, meaning we taxpayers paid to bail out the gamblers.  There is absolutely no difference between what happened during the financial crisis and the scenario I have outlined above.  If you care at all about spending, then the way to control taxpayer costs is to regulate.  Period.

Oh, but regulation hurts the economy!  Well, not so much.  Let’s look at this canard from a specific angle.  In order to be Sarbanes-Oxley compliant, public corporations must…follow me here…must hire people in order to be compliant.  Hires can be internal, external, and they have, at most, a negligible effect on the bottom line.  Basically, it’s a cost of doing business, sort of like buying toilet paper for employees.  In fact, financial compliance adds confidence to a company’s financials, meaning they’re even more valuable from an investment standpoint.  Number of jobs lost because of compliance needs?  None.  Number of jobs created?  Well, a whole helluva lot.

In economics, there is a term called a “public good.”  Basically, there are “goods” such as clean air and clean water that benefit all people.  By destroying thoughtful regulation – environmental, financial, etc. – this country is literally hurting itself.  Plans to de-fund the EPA aren’t only myopic, they’re plain stupid.  Corporations such as our imagined Kock want you, the taxpayer, to pay the cost of their pollution.  Again, they want to socialize all risks while pocketing all profits.  If you at all care about how your tax dollars are spent, you should be pro-regulation.

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