Like nearly a million of my fellow Americans, I participated in the Tax Day Tea Party movement last week. (My John Locke Foundation colleagues and I were involved in several dozen events across our state of North Carolina, attracting more than 23,000 participants.) I was glad to see that so many Americans recognize the tremendous threats to liberty and prosperity posed by fiscal irresponsibility in Washington as well as many state capitals.
But while targeting the big spenders, big borrowers, and big taxers is essential, I hope that this new movement towards fiscal conservatism doesn’t ignore the staggering cost imposed on households and businesses by fanatical regulators. Across a wide range of critical industries, from financial services and construction to energy and infrastructure, regulators in the U.S. and around the world are deepening the recession and hampering recovery with a host of rules that yield few real public benefits.
Obamanomics deserves criticism for fiscal recklessness and Euro-envy. But my pet peeve is that it is pathetically dainty. Our economy has structural impediments — in such areas as energy, water, shipping, and traffic congestion — that can only removed by major public and private investments in physical capital. Earth needs to be moved, resources harvested, nuclear plants constructed, rivers dammed, ports and freight rail capacity expanded, and highways resurfaced, widened, and built. At least the New Dealers didn’t mind getting their hands dirty. The current sentiment in Washington seems to be that windmills, solar panels, recycling, insulation, fluorescent bulbs, and monorails are all we need — and that no snail darter, rare fern, or Cape Cod vacationer need suffer as a result.
The country’s leading think tanks know otherwise. Here are some good reads on regulatory miscues:
• The Competitive Enterprise Institute’s Silvia Santacruz describes the current worldwide war on mining. Reasonable rules are obviously needed, but Santacruz warns of serious consequences if the current overreaching continues.
• Ben Lieberman of the Heritage Foundation sounds the alarm about the Environmental Protection Agency’s recent declaration that carbon dioxide and other greenhouse gases threaten public health and welfare — potentially paving the way for regulatory action even without the congressional creation of cap and trade. “This clears the way for the most expensive and expansive environmental regulation in history,” he said. “The EPA approach to regulating CO2 will dramatically affect the lives and day-to-day practices of all Americans … all for a change in the Earth’s temperature too small to ever notice.” The same threat exists at the state level, where regulatory agencies are seeking to declare CO2 a pollutant. My colleague Daren Bakst recently commented on North Carolina’s plans to do so.
• Why do regulators think they can get away with their obstructionist and prohibitionist policies? Because they know that years of misinformation and shoddy journalism have led the public to assume many “facts” about the environment that aren’t true. The Manhattan Institute has a new study identifying widely held myths about energy production, air quality, and other issues.
• The regulatory state builds on its own mistakes, rather than learning from them. The Reason Foundation’s Anthony Randazzo and J. Dustin Pope provide the example of how federal regulatory and monetary policies in the 1970s and early 1980s help create a dangerous boom-and-bust cycle not just in mortgages and mortgage-backed securities but also in financial regulation itself. They conclude, “history has shown time and again that government is unable to predict the negative and long-term consequences of its actions.”
What’s worse: when they know what they’re doing to us or when they don’t?