Regulations are a really big drag on US growth

[matchewed]

forummm,
Thanks for responding and clarifying the source of Meaningful Use.  I was not aware it came before ACA, but it does make more sense on timing.

Anyways, you are missing the point.  All those regulations cost the hospital money to enforce and run.  Do you think managing an IT department or collecting patient satisfaction surveys has no cost?  What about all those classes staff has to take to learn how to acquire better scores. Don't forget hiring the company to collect those surveys.  All this has a cost that must come from somewhere. Usually this comes from the backs of the employees who get paid less and overworked.

As for the comment regarding non profit hospitals make the most.  Yes, there are many non profit hospitals that profit immensly.  There are even more non profit hospitals that run on a profit margin of 1-3%. Those hospitals budgets are very tight.  Just look around at how many hospitals required closing down or partnering with bigger mega corps to stay afloat.  This is what regulation has done to them.

I will not go into if regulation has increased patient care or patient safety.  All I will say is those regulations cost money.  That money comes from higher medical care costs, lower wages, and overworked staff.

Every few months more regulations keep coming. Documentation keeps on increasing, this cost is real and ever increasing.

And therein lies the oversimplification. You have not factored in the benefit analysis and just blanket talked about costs. Just talking about costs and not mentioning the benefits doesn't actually mean very much if you use it to say that the costs are bad.

[Yaeger]

It's great you have an opinion, but you have provided exactly zero evidence for that opinion. We certainly all agree that regulation has a cost, but you have provided exactly zero support for your assertion that the costs outweigh the benefits and without that attempting to draw _any_ conclusion is ridiculous.

The evidence is there, I've provided it. Any benefits you see, the burden of proof is on you to prove that the benefit is greater than the cost, as externalities tend to have very subjective components.

YOU might value benefits from increased environmental regulation since 1980 and think them beneficial in general, but telling the poor that they should accept lower wages as a result of their contribution to a cleaner environment.. less so. They could care less about the minor impact of fossil fuels to the environment while they freeze during the winter. Maybe that social 'benefit' can keep them warm. Or put food in their bellies.

[obstinate]

Yeah, I don't think any intellectually honest discussion can be had while OP continues to ignore the effect of these regulations on uncompensated externalities. There are liberal think tanks that put out studies showing that regulations benefit the economy by willions of dollars per year. Whether that is accurate really depends on whether their assumptions about the externalities are accurate. But refusing to acknowledge externalities at all? Beyond the pale when it comes to talking about the economics of regulation. It's not just that Yaeger is on a different page; he isn't even reading the right book. #NoThanks

[rocketpj]

Well, there certainly are plenty of almost completely unregulated economies out there to look at.   Hell, we even have a number of deregulated economies to look at to see how well they fared (hint - not well).

Me, I'll take a regulated economy that includes food safety rules for restaurants and food suppliers, worker safety regulations to keep me alive to enjoy my income, etc. etc.  Vehicle safety regulations to keep that transport truck from dropping an axle and obliterating my family as we pass on the highway.  I like that zoning regulations prevent a chemical plant from being set up next to my house.  Etc. etc.

Regulations have a purpose.  Some are outdated, some need to be eliminated, and some need to be created to deal with our changing world.  This is why we have these crazy 'democracies' that help to

But as Winston Churchill once said, 'A fanatic is someone who can't change his mind and won't change the subject'.  So, as you were.

[EnjoyIt]

forummm,
Thanks for responding and clarifying the source of Meaningful Use.  I was not aware it came before ACA, but it does make more sense on timing.

Anyways, you are missing the point.  All those regulations cost the hospital money to enforce and run.  Do you think managing an IT department or collecting patient satisfaction surveys has no cost?  What about all those classes staff has to take to learn how to acquire better scores. Don't forget hiring the company to collect those surveys.  All this has a cost that must come from somewhere. Usually this comes from the backs of the employees who get paid less and overworked.

As for the comment regarding non profit hospitals make the most.  Yes, there are many non profit hospitals that profit immensly.  There are even more non profit hospitals that run on a profit margin of 1-3%. Those hospitals budgets are very tight.  Just look around at how many hospitals required closing down or partnering with bigger mega corps to stay afloat.  This is what regulation has done to them.

I will not go into if regulation has increased patient care or patient safety.  All I will say is those regulations cost money.  That money comes from higher medical care costs, lower wages, and overworked staff.

Every few months more regulations keep coming. Documentation keeps on increasing, this cost is real and ever increasing.

And therein lies the oversimplification. You have not factored in the benefit analysis and just blanket talked about costs. Just talking about costs and not mentioning the benefits doesn't actually mean very much if you use it to say that the costs are bad.

Again, I never said benefits do not exist.  There are benefits to many regulations.  But there are also costs as well.  We as a society need to accept those costs if we are willing to demand those benefits.  Those costs are lower wages and a decrease in economic growth. 

[Yaeger]

Yeah, I don't think any intellectually honest discussion can be had while OP continues to ignore the effect of these regulations on uncompensated externalities. There are liberal think tanks that put out studies showing that regulations benefit the economy by willions of dollars per year. Whether that is accurate really depends on whether their assumptions about the externalities are accurate. But refusing to acknowledge externalities at all? Beyond the pale when it comes to talking about the economics of regulation. It's not just that Yaeger is on a different page; he isn't even reading the right book. #NoThanks

I'd like to see these studies from liberal think tanks. I'd also like to see the cumulative effects of those regulations on the economy. Plus, I'd like for politicians to acknowledge, to the poor, that the increased regulations contribute to their lack of opportunity and the cycle of poverty.

The whole assumption is that the costs of these regulations, not the benefits from correcting externalities, are greater than the sum total. I never denied that there were externalities, those are included even in this study as part of the government's CBA. Also, something that this study didn't go into as much, or identified in various other studies, are the impacts of 2nd and 3rd order effects, costs, or benefits of these regulations on the economy which I think is more important and require more government Ex post CBAs on these topics to see if the regulation had to projected effect.

If you want to argue that the benefits are also more than cumulative, sure, go right ahead. Convince me.

[MilesTeg]

It's great you have an opinion, but you have provided exactly zero evidence for that opinion. We certainly all agree that regulation has a cost, but you have provided exactly zero support for your assertion that the costs outweigh the benefits and without that attempting to draw _any_ conclusion is ridiculous.

The evidence is there, I've provided it. Any benefits you see, the burden of proof is on you to prove that the benefit is greater than the cost, as externalities tend to have very subjective components.

YOU might value benefits from increased environmental regulation since 1980 and think them beneficial in general, but telling the poor that they should accept lower wages as a result of their contribution to a cleaner environment.. less so. They could care less about the minor impact of fossil fuels to the environment while they freeze during the winter. Maybe that social 'benefit' can keep them warm. Or put food in their bellies.

The burden of evidence is on you, as the person making the original positive claim "regulations aren't worth it". You provide no evidence of that claim, only a paper which expressly states that it does not attempt to make that claim.

Add in a portion of appeal to emotion and general intellectual dishonesty/rhetorical B.S. you display here and elseware, and I'm done with your foolishness.

[tipster350]

Of your many baseless and preposterous assertions, claiming that regulations are the direct cause for subsistence wages and the cycle of poverty is the most ridiculous of all. Repeating your points or trying to find pseudo-scientific "studies" to back up your opinions that you seem desperately wedded to does not make them true.

[gaja]

Socialist countries have even more regulations, but the stats don't show less growth. This TED talk shows an interesting (and funny) take on "Where in the world is it easiest to get rich" https://www.youtube.com/watch?v=A9UmdY0E8hU

[Yaeger]

The burden of evidence is on you, as the person making the original positive claim "regulations aren't worth it". You provide no evidence of that claim, only a paper which expressly states that it does not attempt to make that claim.

I never made that claim and you're inferring a lot that just isn't there. If you had a stance counter to mine, you had ample opportunity to make it and provide supporting evidence instead of trying to attack me. It's petty, grow up.

[Yaeger]

Of your many baseless and preposterous assertions, claiming that regulations are the direct cause for subsistence wages and the cycle of poverty is the most ridiculous of all. Repeating your points or trying to find pseudo-scientific "studies" to back up your opinions that you seem desperately wedded to does not make them true.

I never said they were a 'direct cause.' I never even said that it was the intended, or desired, effects of various regulations.

However, there are many studies on this issue if you desire to do some googling. You can be of the opinion that the U.S. is better off with more and more regulations, and that's fine though I'd prefer proof. However, if you make the claim that ALL regulations (even the preponderance) support greater economic growth you'd need to support that with evidence.

[tipster350]

Of your many baseless and preposterous assertions, claiming that regulations are the direct cause for subsistence wages and the cycle of poverty is the most ridiculous of all. Repeating your points or trying to find pseudo-scientific "studies" to back up your opinions that you seem desperately wedded to does not make them true.

I never said they were a 'direct cause.' I never even said that it was the intended, or desired, effects of various regulations.

However, there are many studies on this issue if you desire to do some googling. You can be of the opinion that the U.S. is better off with more and more regulations, and that's fine though I'd prefer proof. However, if you make the claim that ALL regulations (even the preponderance) support greater economic growth you'd need to support that with evidence.

I have not made any claims that all regulations support greater economic growth; nor do I care to make any further points in this thread, as it has no hallmarks of a serious discussion. If anyone needs to do some googling for facts, it starts with you, the one who initiated this thread topic.

[Cyaphas]

I've always felt that there should be a  standardized sun-setting applied to every Federal regulation & tax law, outside of the Constitution that is. Attach it to how many votes it got to pass, put in a minimum 10 year sunset and a max 20 year sunset.

With how quickly our technology is changing I wonder if we already haven't hit the limits to what 536 people can reasonably regulate and control. The size and scope of the US Federal Government truly is both historically massive and intimidating.

I also feel if we paid our legislatures more, we'd attract more talent. Percentage wise, for how much each legislature controls in funding, they receive little in pay. If we paid our Senators, Representatives and President a lot more, theoretically wouldn't they be less likely to be swayed by bribery?

[rocketpj]

I've always felt that there should be a  standardized sun-setting applied to every Federal regulation & tax law, outside of the Constitution that is. Attach it to how many votes it got to pass, put in a minimum 10 year sunset and a max 20 year sunset.

With how quickly our technology is changing I wonder if we already haven't hit the limits to what 536 people can reasonably regulate and control. The size and scope of the US Federal Government truly is both historically massive and intimidating.

I also feel if we paid our legislatures more, we'd attract more talent. Percentage wise, for how much each legislature controls in funding, they receive little in pay. If we paid our Senators, Representatives and President a lot more, theoretically wouldn't they be less likely to be swayed by bribery?

Not sure there's such a thing as 'satiated' for the corrupt and greedy.  I read once that a typical Congressperson gets a >1000% pay raise as soon as they leave office.  Not hard to figure out why.

It would be good in any country to set up a system to regularly review and update laws and regulations.  Unfortunately, most regulations and laws are boring as toast and would be of zero interest to the general public (and huge interest to those who are in any way constrained by them).  A review board would be ground zero targeting for corruption.

[EnjoyIt]

This is so sad.

Why is it that people can't agree that complying with regulations cost money. That money comes from somewhere. Usually it comes from lower wages or decrease in growth.

Simple common sense. No?

[GrumpyPenguin]

This is so sad.

Why is it that people can't agree that complying with regulations cost money. That money comes from somewhere. Usually it comes from lower wages or decrease in growth.

Simple common sense. No?

No one is saying that compliance doesn't cost money.  But that's just one side of the coin.  People obviously disagree about the total costs and benefits of regulation, not just the costs or just the benefits.  The fact that people can't see that there are both costs and benefits to regulations and that these need to be weighted against each other is sad to me.  It's really common sense, but people seem to be missing that entirely.

[paddedhat]

This is so sad.

Why is it that people can't agree that complying with regulations cost money. That money comes from somewhere. Usually it comes from lower wages or decrease in growth.

Simple common sense. No?

Well, sure it is, and it has little to do with the thread. The issue being discussed is the cost/benefit analysis of the regulatory burden in our society. The rational folks clearly point out that any modern society needs a pretty significant regulatory burden in order to not destroy our environment, and keep their citizens safe and healthy. As several have pointed out, in many cases the pendulum can easily swing too far, and become an unreasonable burden, and maintaining a balance needs is important.

On the other side of the argument you have this.

"You can keep the regulations, but realize the damage it does to society. When you're arguing for workers to be paid a living wage, poverty or income inequality it's these very things keeping them 'safe' that keeps them poor, uneducated, and sick."

This statement is a product of somebody who believes that things like clean air, safe water, control of public heath risks,  well regulated safe transportation, and other results of regulation do indeed harm the public and make workers poor, uneducated and sick. Pretty twisted thinking, and nothing I would call logic, but that's what this thread is about, not the fact that regulations are a expensive, or need to be paid for in lower growth or wages.

[EnjoyIt]

This is so sad.

Why is it that people can't agree that complying with regulations cost money. That money comes from somewhere. Usually it comes from lower wages or decrease in growth.

Simple common sense. No?

"You can keep the regulations, but realize the damage it does to society. When you're arguing for workers to be paid a living wage, poverty or income inequality it's these very things keeping them 'safe' that keeps them poor, uneducated, and sick."

This statement is a product of somebody who believes that things like clean air, safe water, control of public heath risks,  well regulated safe transportation, and other results of regulation do indeed harm the public and make workers poor, uneducated and sick. Pretty twisted thinking, and nothing I would call logic, but that's what this thread is about, not the fact that regulations are a expensive, or need to be paid for in lower growth or wages.

But don't both statements above say just about the same thing in a different way.  I can repeat it.

Regulations cost money to uphold.  This money has to come from somewhere.  usually that money comes from lower wages and decreased growth.  Those lower wages prevent a living wage for many, and decreased growth decreases the amount of available jobs as population grows.  The regulations have some benefits but also harms society in other ways.  We as society have to decide if we are willing to accept the lower wages and lower growth to have those regulations.  Again I am not saying those regulations have no benefit, but they do come at a very steep price.  I pointed to a few examples in medicine in an earlier post.  I read another post this morning about the regulations teachers have to deal with that make their work harder and now require the hiring of teachers aids to keep up with those regulations.  Maybe it will lead to more educated students which I doubt.  But it definitely leads to lower wages for teachers and more kids per classroom.

[gaja]

You all say "regulations cause decreased growth" like it is known truth, but really it is only politics and opinions.

Look at this (peer reviewed) article, especially the tables: http://www.sciencedirect.com/science/article/pii/S2306774814000039 Table 5 "Where is dealing with construction permits easy and where not?", shows Denmark on the easy list, and India on the difficult list. Please do not tell me you believe Denmark has less regulations than India!? Sweden, Denmark and Norway are all on the list of countries where it is easiest to trade across the borders. Not only do those countries (especially Sweden) have more regulations than anyone else in the world; they follow every single one to the letter and beyond.

The conclution of the article is that ""good" business regulations is associated with higher economic growth". Having good and predictable governance saves you a lot more money in the long run, than freedom and unpredictability.

[forummm]

Analyzing the impact of regulations is a very complicated job. And it's easy for someone who is opposed to one or more of them to make the numbers look terrible. Similarly, someone who wants a particular regulation could make the numbers look overly rosy. That's why you need professionals without an interest in the outcome to conduct an independent and honest evaluation of the costs and benefits.

It's a common trope among limited government types that "regulation" = "bad", and "government" = "bad". But it's really a case-by-case basis. For some applications, government is the wrong way to solve a problem. But for many, it's the best way we know of. Similarly with regulation. Sometimes we get the policy wrong. But sometimes the private sector gets the free market alternative wrong too. People make mistakes. Government screws up. Industry screws up. You just have to go with the best information that you have and have oversight to make sure that things are implemented as intended and evaluation to make sure they outcomes are as intended. And then take corrective action as needed.

I think that the vast majority of regulations in the US make us better off overall. Some may do that by trading short-term economic growth for some other valuable outcome (like not allowing our drinking water to be polluted by some industry that wants to dump poison in the river). Some may do that by restricting activity that enriches the few at the expense of the many (like not letting banks steal from their customers). Some may do that by restricting the financial industry in certain ways that enable everyone to have trust in the industry so we can have stable banking, assurance of payments, safe places to keep our money, etc. The banks might fight like hell against some of those regulations--because it would enrich them if they weren't in place--but by making the rest of us poorer.

Good regulation makes us all better off overall. Bad regulation does exist too. But nothing that people create is ever perfect. And the good outweighs the bad.

If you think about it, the places with the most regulation are also the best places in the world to live (US, Canada, Europe, Japan, etc). Not proof that it's because of the regulation, but evidence that societies can maintain and grow their economies even with a lot of regulation in place.

[EnjoyIt]

From your article above

A more plausible explication is that business regulations may have a positive effect on growth by removing certain market failures and improving economic efficiency. But, business regulations may have a negative effect on economic growth by creating substantial costs, undesirable distortions,. The impact of business regulations on growth depends on which effect is larger.

Again, regulations cost money to implement. That money has to come from somewhere. If those regulations lead to increased profit then it will lead to increased growth. Makes sense right? But if the regulation is created to benefit other externalities which may be framed positive for society but do not increase profits, then that cost must be subsidized by the company. Usually that subsidy is paid through lower wages and decreased growth. Makes sense right?

Two hypothetical examples to drive it home:
1) regulations that dictate how two companies handle a transaction making that transaction more efficient. This regulation is a net positive and will lead to growth for both companies.

2) regulation that dictates increased documentation on safety measures in the same transaction although may or may not lead to more safety will cost both companies money to comply and therefor a net negative which leads to decreased growth and/or lower wages.

Basically it depends on the regulations and its goals.

Another example: Philip Moris (a tobacco company) is pushing for regulations on e-cigarettes that would make it cost prohibitive for smaller companies to compete in the market. This will inevitably lead to closed shops and increased unemployment all in the name of safety of the electronic cigarette products.

[forummm]

2) regulation that dictates increased documentation on safety measures in the same transaction although may or may not lead to more safety will cost both companies money to comply and therefor a net negative which leads to decreased growth and/or lower wages.

Yes, possibly. Unless the safety measures are to ensure the safety of people besides the 2 people in the transaction. Then, by ensuring that 2 parties don't agree to a transaction that destroys the wealth of people not party to the transaction, it could have a negative effect on the profits of the 2 firms, but a beneficial impact on the overall economy. As you say, it depends on the regulation.

Another example: Philip Moris (a tobacco company) is pushing for regulations on e-cigarettes that would make it cost prohibitive for smaller companies to compete in the market. This will inevitably lead to closed shops and increased unemployment all in the name of safety of the electronic cigarette products.

Yes, this is an example of a special interest trying to get the government to act in a way that enriches it. Governments should ignore who's backing an argument, and instead look at the merits. In this case you have all of the costs associated with people having greater access to a harmful product (because it's tobacco), and the possibility that it will be even more harmful (if it's unregulated it could be filled with many toxins, have inconsistent dosage, have a dosage so high you OD, etc).

The ideal outcome for the society is that everyone quits tobacco of all kinds. That would save enormous amounts of money on medical care and prolong life and improve health. Since this is an unlikely outcome, the next best is for only people who can't quit smoking to switch to using e-cigarettes (because it's probably less harmful than smoking, but still harmful), and for no one else to start using them. But by making something seem less harmful and making it cheaper and easier to use and easier to hide, you make it much more likely that lots of people, including children, will start vaping and get hooked on tobacco and suffer the related health problems and attendant costs. And you have the further problem of people getting poor quality e-cigarette products if they are unregulated, which could kill or injure them. It's a very complicated problem with many competing interests from a societal perspective, as well as the competing business interests involved.

[EnjoyIt]

Yes, possibly. Unless the safety measures are to ensure the safety of people besides the 2 people in the transaction. Then, by ensuring that 2 parties don't agree to a transaction that destroys the wealth of people not party to the transaction, it could have a negative effect on the profits of the 2 firms, but a beneficial impact on the overall economy. As you say, it depends on the regulation.

This is exactly what Yaeger was saying. Although the regulation may help society, that regulation has a cost. It will cost those companies money to comply with that regulation. That cost will be offset by lower wages and decreased growth.  We as society therefor need to either accept lower wages and poverty for those societal benefits, or choose to limit regulations. We can't have both.

[forummm]

Yes, possibly. Unless the safety measures are to ensure the safety of people besides the 2 people in the transaction. Then, by ensuring that 2 parties don't agree to a transaction that destroys the wealth of people not party to the transaction, it could have a negative effect on the profits of the 2 firms, but a beneficial impact on the overall economy. As you say, it depends on the regulation.

This is exactly what Yaeger was saying. Although the regulation may help society, that regulation has a cost. It will cost those companies money to comply with that regulation. That cost will be offset by lower wages and decreased growth. 

In a myopic view. If the transaction were to result in massive destruction in wealth for other people, then the 2 firms in question could have an increase in profits of $1 million, while other people experience a decrease in profits of $1 billion. Therefore, the regulation, by preventing one transaction, would increase economic output (and jobs, growth, etc) relative to the  scenario where it transaction could occur.

[EnjoyIt]

Yes, possibly. Unless the safety measures are to ensure the safety of people besides the 2 people in the transaction. Then, by ensuring that 2 parties don't agree to a transaction that destroys the wealth of people not party to the transaction, it could have a negative effect on the profits of the 2 firms, but a beneficial impact on the overall economy. As you say, it depends on the regulation.

This is exactly what Yaeger was saying. Although the regulation may help society, that regulation has a cost. It will cost those companies money to comply with that regulation. That cost will be offset by lower wages and decreased growth. 

In a myopic view. If the transaction were to result in massive destruction in wealth for other people, then the 2 firms in question could have an increase in profits of $1 million, while other people experience a decrease in profits of $1 billion. Therefore, the regulation, by preventing one transaction, would increase economic output (and jobs, growth, etc) relative to the  scenario where it transaction could occur.

Not quite sure what you are saying there. Can you please repeat it differently and maybe give me an example of some sort. Real or theoretical to elucidate your point.

I have shared 4 real life examples in the posts above 1 that benefits society and 3 that do not but created in the hopes there would be a benefit.

I do believe it is extremely myopic to create a regulation thinking it may help a subset of people without taking the cost in totality such as harming another group of people. Our school system is a terrific example. A whole slew of retarded regulations exist in the hopes of creating a more equal education for all. The net result is increased costs, decrease pay for teachers with overcrowded classrooms while our quality of education is declining. Good intentions gone awry and progressively getting worse with more regulations.

I see similar in the healthcare industry as well.

[the_gastropod]

It will cost those companies money to comply with that regulation. That cost will be offset by lower wages and decreased growth.  We as society therefor need to either accept lower wages and poverty for those societal benefits, or choose to limit regulations. We can't have both.

This keeps being regurgitated by you guys. And if trickle-down economics wasn't complete malarkey [1][2][3], you'd be right. Unfortunately for your argument, trickle-down economics is malarkey—corporations tend to maximize profits. In order to maximize profits, they tend to pay employees as little as possible. So any extra costs incurred simply lower profitability of the business (and the size of executive bonuses), but rarely impact normal employees.

[1] https://www.theguardian.com/business/2012/jul/21/offshore-wealth-global-economy-tax-havens
[2] https://www.hks.harvard.edu/news-events/publications/impact-newsletter/archives/autumn-2009/trickle-down-economics-revisited
[3] http://inequality.stanford.edu/sotu/SOTU_2014_CPI.pdf (p 31)

[Lagom]

EnjoyIt, what neither you nor Yaeger have provided is any proof whatsoever that regulations are meaningfully harming more than they help, despite your repeated claims that this is the case. All of the countries with the highest standards of living are highly-regulated, so anecdotal evidence is already overwhelmingly against you. The one cited paper literally acknowledges that it is not studying the overall cost/benefit outcome of regulations, and is thus not germane to this discussion. Yes, many of the fastest growing economies are less regulated, but so what? Would you rather live in those countries than the U.S.? I think not.

[davisgang90]

Of course one of the (un?)intended consequences of US regulations is that we offshore our pollution to other countries. 

I am one who sees great benefit in many of the regulations in the US.  At some point though we might be over regulating just a bit.  For example:

In most states you need over 300 hours of training at a school of cosmetology to become a shampoo technician.  300 hours...to learn how to wash and condition hair.  You can learn to solo in an aircraft in about a tenth that time.

https://www.tn.gov/commerce/article/cosmo-shampoo-technician

[EnjoyIt]

I nor Yaeger (I believe) are denying the benefits of regulations. Clearly we all like clean drinking water and <0.01% rat feces in our pudding.

But that regulation will always come at a cost that someone has to pay for. This costs leads to lower wages and decreased growth which decreases job opportunities.

If you think most business owners will willingly cut their profit for the sake of a regulation you are mistaken.

For example NYC increased tax on cigarettes. Benefit is more people decreased cigarette intake. Harm is that created a black market for cigarettes which in the end also decreased revenue for the city. To make up for the shortfall other areas needed to be taxed higher. Clear benefit to society that is paid for by other tax payers and created illegal activity.  Nothing happens in a vacuum. The benefit may out weigh the harm in this scenario.

[forummm]

Yes, possibly. Unless the safety measures are to ensure the safety of people besides the 2 people in the transaction. Then, by ensuring that 2 parties don't agree to a transaction that destroys the wealth of people not party to the transaction, it could have a negative effect on the profits of the 2 firms, but a beneficial impact on the overall economy. As you say, it depends on the regulation.

This is exactly what Yaeger was saying. Although the regulation may help society, that regulation has a cost. It will cost those companies money to comply with that regulation. That cost will be offset by lower wages and decreased growth. 

In a myopic view. If the transaction were to result in massive destruction in wealth for other people, then the 2 firms in question could have an increase in profits of $1 million, while other people experience a decrease in profits of $1 billion. Therefore, the regulation, by preventing one transaction, would increase economic output (and jobs, growth, etc) relative to the  scenario where it transaction could occur.

Not quite sure what you are saying there. Can you please repeat it differently and maybe give me an example of some sort. Real or theoretical to elucidate your point.

Say Exxon wants to drill for gas in California and there's a lot of gas they could get really cheaply out of the ground and make a huge profit. But the way they want to do that requires injecting an incredible amount of highly toxic chemicals into the water system that feeds Los Angeles. So Exxon could make many millions of dollars drilling for gas. But we prohibit them doing that because it would mean some combination of killing or injuring millions of people, requiring the expense of untold billions of dollars getting water from somewhere else that was safe to drink, requiring all the businesses in Los Angeles to shut down because everyone moved away, massive losses in property values, etc.

Say a hedge fund (John Paulson) wants to make money so in 2006 they get a bank (Citigroup) to create a CDO full of mortgages that Paulson personally picked because he knew they were crap and Citigroup knows this and sells the package of CDOs to a pension fund (without disclosing how they were created and presenting them as though they were good assets) and lets Paulson bet against them. By letting a bank not act as a fiduciary to the pension fund, and not having sufficient disclosure requirements, Paulson is enriched at the expense of the state backing the pension fund.

Say a small number of businesses own all the providers of a resource and they decide to collude and set prices. By acting as a monopoly they can jack the price almost as high as they want to. Any business relying on that resource may become unprofitable and shut down, costing jobs and lowering economic output. People buying that resource are made poorer as a result of the higher price, so they have less money to spend on something else, thereby decreasing profits, jobs, and economic output in other industries as well.

In all these examples, profits for a small number of people are prevented from increasing because they would destroy much more wealth for many more people/firms.

[EnjoyIt]

The last two examples are illegal. The first one I agree is a great example of good clean water regulation that benefits society over employment in California and increased profits for Exxon.

Which is why every regulation needs to be evaluated in its totality and not just the intended result which may or may not happen such as the education in the US.

[gaja]

Regulations might be costly for some industries, but a huge gain for others. There is now a large and growing industry delivering gadgets that reduce pollution from ship engines; everything from suphur scrubbers to battery technology for hybrid solutions. The last one turns out to be very beneficial economically; the decreased fuel costs outweights the battery costs and installation within a year. It is just that nobody bothered to do anything other than business as usual before the regulations came.

The garbage and sewage industry was another example. Throwing it away in big landfills and dumping it in the ocean was the easiest and cheapest solution until the regulations came. Now garbage is considered one to the fastest growing industries; mining precious metals, producing biogas, extracting phosphorous, etc. Biogas production gives an average of 1.4 local jobs per GWh produced, and helps ensure that the drinking and bathing water stays healthy.

Unhealthy populations are very expensive, even in places were the welfare system is non existent. They contribute very little in taxes and cause the per capita spending to go down. If the kids are sick, parents work less and are more distracted. They also have less time and money to spend in local businesses. Healthy and well educated populations are more productive, and are more likely to both increase the revenue of local businesses and start their own businesses. So those environmental regulations that might be costly for the local paper mill, because they can't pour their shit into the local drinking water. But for the local economy overall it is a positive net.

Using illegal economies and black markets as an argument against regulations is just weird to me. I have no idea how to respond to that. You don't choose whether to follow laws.

[gaja]

The last two examples are illegal. The first one I agree is a great example of good clean water regulation that benefits society over employment in California and increased profits for Exxon.

Which is why every regulation needs to be evaluated in its totality and not just the intended result which may or may not happen such as the education in the US.

Fracking would increase the number of Exxon jobs, but other jobs would be lost because of the negative impact. Who would want to be a tourist in a highly polluted area? who would want to buy food or water produced there? The total net for the economy could just as easily be negative.

[2buttons]

I love the blind rage at the mere suggestion that regulation is costly. I love that immediately the liberal police cite clean water and air, as if that mom and apple pie is what Yaeger raised. I also love that they attacked him personally. "Progressive or liberalism" on display...it's only cool to have a differing view, if you agree with me.

This is so stupid. Some regulation is good, but defending all regulation with this level of vehemence is just plain idiotic. Of course there is harmful business regulation out there. To suggest otherwise is just plain crazy.

[Lagom]

I love the blind rage at the mere suggestion that regulation is costly. I love that immediately the liberal police cite clean water and air, as if that mom and apple pie is what Yaeger raised. I also love that they attacked him personally. "Progressive or liberalism" on display...it's only cool to have a differing view, if you agree with me.

This is so stupid. Some regulation is good, but defending all regulation with this level of vehemence is just plain idiotic. Of course there is harmful business regulation out there. To suggest otherwise is just plain crazy.

Who has defended all regulation to a level of "stupid" vehemence? Your bias is showing more than any of the so-called "liberal police" you no doubt see every time your own world-view is challenged. 

[2buttons]

Re-read the posts. It's so obviously ugly.

[Lagom]

Re-read the posts. It's so obviously ugly.

Some are personal attacks, most are not. Those that are not are largely ignored, presumably because cognitive dissonance is uncomfortable.

[EnjoyIt]

I love the blind rage at the mere suggestion that regulation is costly. I love that immediately the liberal police cite clean water and air, as if that mom and apple pie is what Yaeger raised. I also love that they attacked him personally. "Progressive or liberalism" on display...it's only cool to have a differing view, if you agree with me.

This is so stupid. Some regulation is good, but defending all regulation with this level of vehemence is just plain idiotic. Of course there is harmful business regulation out there. To suggest otherwise is just plain crazy.

I think that is all Yaeger was trying to say.  All regulations have consequences intended or unintended.  Some regulations have a benefit such as no dumping in rivers or streams.  Other regulations have harm to society such as the war on drugs.  Some regulations have a massive benefit but also a drag on wages and growth.  I gave a few examples in the health care industry in an earlier post.

Ask any school teacher and see what they say about regulations in education and see how favorably they talk about those.

Ask some of the smaller doctors offices and see if regulation has created a benefit for them and their patients (that is if their office is still open.) 20 years ago a doctor can run an office based practice with just him and a secretary/nurse.  Today that same doctor needs a secretary, a nurse, a scribe, a coder and someone to do billing collections.  The original nurse secretary now gets their pay cut to help offset some of the costs of doing business.  Or what happens more often is that doctor will join a group of 10 doctors and run the office with 5 or 6 people which leads to 4 or 5 lost jobs.  decreased wages for everyone employed, a few unemployed people, for the benefit of electronic records, compliance enforcement of government regulations, and strange billing practices which are pioneered through CMS (basically medicare and medicaid since all insurance companies follow what CMS is doing.)


At the end of the day most regulations have a cost that needs to be paid by someone.  Sometimes that cost is offset by growth somewhere else, but in general it leads to decrease wages and increased unemployment since the last thing to go is profit.  I have given a few examples of that as well.

[2buttons]

http://www.businessinsider.com/ridiculous-regulations-big-government-2010-11?slop=1#1-private-investigators-license-1

[obstinate]

I love the blind rage at the mere suggestion that regulation is costly.

TBH there's very little rage in this thread, besides yours. People don't want to concede Yaeger's point because he's conflated regulations having some costs with regulations worsening long-term economic output. Although he claims to be factoring in the benefits, he clearly isn't, because the paper he cited does not include them.

Obviously, regulations have costs. Everyone who has even the most cursory understanding of politics or economics understands this. It's almost axiomatic. Bringing up this point has zero utility without also factoring in a realistic estimate of the benefits.

[forummm]

The last two examples are illegal.

That's what regulation does--makes things illegal.

[forummm]

The last two examples are illegal.

That's what regulation does--makes things illegal.

Also, I'm not sure the hedge fund example was against the law. This actually happened (Paulson made a billion dollars off of it). I don't remember if it was Citigroup, and who the counterparty was.

[2buttons]

I love the blind rage at the mere suggestion that regulation is costly.

TBH there's very little rage in this thread, besides yours. People don't want to concede Yaeger's point because he's conflated regulations having some costs with regulations worsening long-term economic output. Although he claims to be factoring in the benefits, he clearly isn't, because the paper he cited does not include them.

Obviously, regulations have costs. Everyone who has even the most cursory understanding of politics or economics understands this. It's almost axiomatic. Bringing up this point has zero utility without also factoring in a realistic estimate of the benefits.

Are you normally not honest? There absolutely was rage on your side. When name calling ensues and people telling someone to go away because they don't like their viewpoints, its 1000% rage.  Sorry, but they don't like Yaeger's opinion and the vitriol spews (including hating on him so far that people break the forum rules), every angle is used to discredit him, and it goes so far that common sense flies out the window, all under the guise of the liberal greater good. 

I was just laughing at the absurd arguments. All regulation is not good. Its been created by man and man is fallible. There are thousands of awful regulations out there, and a lot of them inhibit business for sure. Everyone is entitled to an opinion, but not their own set of facts.

Yes, I am a big dirty Republican, big surprise.  I believe in limited government.  I think there is some great things that regulation has done - basic policy on clean water, air, medicines etc. In fact, Republicans used to be the environmental party, until the Dems took over and run things out of control - feel free to look it up.

What I can't stand, on both sides, is this this blind allegiance to an issue or President that has got us into a position where its Trump vs. Hillary or Bernie Sanders - yes rage is here - because people are stupid and the cannot think for themselves anymore.  You stack your Facebook feed with only your side. Same with twitter and the one sided political backslapping and the other side shaming begins. I blame all you people for the current election.  Don't just start arguing on the internet. Think about it for a brief second.   

You think all regulation is good? All of it? Seriously? Really? All regulation? What if its a regulation against something you support? Still think its good? You think every regulation every Democrat lawmaker makes is perfect? 

Holy smokes (head shaking). 

*I know of a ton of bad regulation from Republicans too. Ever taken your shoes off at the airport?  All regulation is good...still laughing at the absurdity, and sad for critical thinking in the United States.

[forummm]

You think all regulation is good? All of it? Seriously? Really? All regulation?

Please show me where someone said "all regulation is good" in this thread.

Republicans used to be the environmental party,

A really long time ago. The parties have changed. The Republicans used to be more liberal and moderately in favor of civil rights and into conservation. Then the parties realigned and the Republicans moved to the other side of those issues about 50 years ago.

[2buttons]

So you agree that regulations inhibit business, that was the premise of Yaeger's argument? Got it.

You weren't actually knee jerk arguing absurd positions because his political position is not the same as yours?

Sorry, somehow I missed the point where you made those important points.

[Lagom]

So you agree that regulations inhibit business, that was the premise of Yaeger's argument? Got it.

You weren't actually knee jerk arguing absurd positions because his political position is not the same as yours?

Sorry, somehow I missed the point where you made those important points.

If we take your claim that you are being more objective than us "liberal police" at face value, then the entire "argument" is pointless anyway since you are focusing on something not worth contesting: that regulations consume resources. No shit. Why bother arguing that point without considering any other factor? There is absolutely no point to doing so. Thus the only two logical conclusions here are either you are all trolls or you are far more ideologically blinded than you are claiming we are.

[2buttons]

There it is. More of the name calling. Trolling? Really? Just because we don't agree. There it is folks. Progressives.

Are you kidding me? Did you see the link I posted? Care about the poor, liberal? Philly doesn't. Charges $300 licensing fee for bloggers. Bloggers.  Bloggers.

A friggin blogger.

So that single mother, who has a min wage job, can't start a blog at night to try to generate income, unless she pays $300 up front. Good call. City needs more tax dollars. You know better. 

Don't forget folks. All regulation is good, no matter who it hurts.

[2buttons]

If we paid our Senators, Representatives and President a lot more, theoretically wouldn't they be less likely to be swayed by bribery?

Love sun setting idea, but it's basically there already, just no one pays attention to it. It's called an authorization bill.

On cash for Members, it's not the wage, it's the chance to get paid for influence later. Fact is Members of Congress are far less corrupt than people think.  There are always a few bad apples, but most of them don't vote based on cash. Sure, there are the power hungry types (HRC), but most go to Washington because they truly do care. I don't have an answer.  More cash is provocative, but not sure it gets us there.

[Gin1984]

We can argue all day about the math and how much a part of that massive loss can be offset by intangible benefits. However, I think everyone here has agreed that there is a significant drag on the economy because of it. The premise stands. By all means, if you disagree, post a study that at the very least supports your opinion.

This has never been about the push to eliminate all regulations, as even I support *some* of those. However, it's my opinion that we do have excessive regulations stemming from growth in the 1970's through today that limit US economic growth, impact the poor (while helping them), and sabotage our long-term welfare.

No, not everyone has agreed that.  Asking us to post a study implies that your post actually was peer reviewed study.  That seems to be under contention.

[Lagom]

There it is. More of the name calling. Trolling? Really? Just because we don't agree. There it is folks. Progressives.

Are you kidding me? Did you see the link I posted? Care about the poor, liberal? Philly doesn't. Charges $300 licensing fee for bloggers. Bloggers.  Bloggers.

A friggin blogger.

So that single mother, who has a min wage job, can't start a blog at night to try to generate income, unless she pays $300 up front. Good call. City needs more tax dollars. You know better. 

Don't forget folks. All regulation is good, no matter who it hurts.

smh... You are willfully ignoring almost everything we say that remotely contradicts your worldview, repeatedly putting words in our mouths, and then acting persecuted over it in an insulting and condescending manner. But yes, I am the name-calling jerk here who is incapable of independent thought. Guess I'll just carry on with that in my little bubble. It is so nice and cozy in here.

Edit: And to provide you yet another opportunity to ignore anything that contradicts your claims, I totally agree there are tons of utterly stupid and indefensible regulations out there that should be eliminated. But that doesn't remotely mean that every regulation is terrible, which is just as sweeping and illogical a claim as "all regulations are good," except you seem to have no problem with that reversed tautology. Also, while I consider myself a "liberal" or "progressive" in some respects, I strongly dislike the Democratic party and much of what I'm sure you would define as typical liberal politics. I would say I lean libertarian except I don't. If anything, I'm probably something like a more socially liberal small-govt republican (as in how the party used to be, plus I care about inequality and injustice).