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Regulating Toward Lawlessness

 “If you have ten thousand regulations you destroy all respect for the law,” Winston Churchill

Churchill reportedly said that in 1949 in the House of Commons as he defended free markets from the overregulation prone post-World War II Labour government.  If he were alive today, I wonder what he would say when he learned that in the United States there are currently more than 1,000,000 federal regulatory restrictions on the books?

Take a look at this graph from the Mercatus Center at the George Mason University:



There is no regulatory relief in sight in that graph, quite the opposition. That is why this area will always have a permanent class of lawyers and lobbyists. Someone has to help you navigate the regulatory bramble, while others will help you cut through it, for a rather sometimes hefty price.

In yesterday’s The Hill newspaper, a study to be released later this year by two college professors concludes that:

economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.”

That may or may not be true. For our purposes, and as someone who has worked in and out of government, navigating the federal regulatory and Congressional landscape is difficult. It is designed to be. Why bother with laws if they can be changed easily?

As for the study, I tend to bristle when I see the word elite used to defend or explain an issue. Who decides who or what group qualifies as a member of the elite? Why, members of the elite. It is all also usually a tell-tale sign of a liberal or pro-government bias.

In the Los Angeles Times a few days ago, there was similar albeit a little more disturbing piece about yet another study concluding that (emphasis my own):

politically connected firms on average are less likely to be involved in SEC enforcement actions and face lower penalties if they are prosecuted by the SEC. Contributions to politicians in a strong position to put pressure on the SEC are more effective than others at reducing the probability of enforcement and penalties imposed by an enforcement action. Moreover, the amounts paid to lobbyists with prior employment links to the SEC, and the amounts spent on lobbying the SEC directly, are more effective than other lobbying expenditures at reducing enforcement costs faced by firms.

Basically this person believes that of you throw a lot of money at politicians, you’re less likely to face scrutiny from a federal regulator. A summarized by the Los Angeles Times:

A $1-million increase in contributions by a corporation to a political action committee in the five years before a violation of SEC rules, she finds, can reduce the probability of an enforcement action from the SEC by more than half (from 8.58% to 3.43% in her sample). Her conclusion is that “long-term PAC contributions are effective at deterring SEC enforcement.”

These folks believe that money is the root of all evil. In both studies there appears to be some sort of pro-government bias. The little people are out of luck. The system will not work for you unless you’re throwing money around to politicos. If you have a lot of money, the laws do not apply to you because you can figure out ways to “game the system”.

Maybe these folks need reminding that we live in a federal republic, at least we used to. We have local, state, and federal governments to attend to the many issues that keep this our cities, states and country moving. Voters elect citizens to represent them. The elites forget or ignore this. It is a major disconnect in most of these studies that try to decipher issues that may or may not plague the federal government or the American political system.

The bigger issue for freedom and prosperity has nothing to do with money in politics or you versus me issues. It has to do with the regulatory superstate that the federal government continues to impose with impunity on the states and individuals. Think ObamaCare. The only way to change the regulatory madness is to elect people to public office who understand that the road to prosperity is paved with free markets, not governments.

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