Sunday, July 13, 2008

The Truth About Government Regulation

John McCain has famously expressed his admiration for Theodore Roosevelt, especially when it comes to his trust busting and government regulation.

What McCain and many others don't seem to realize is that government regulation of business existed in Roosevelt's time and onward in order to protect big business from consumers, not the other way around.

Progressives have constructed an army of tall tails to protect us from this knowledge. According to their myths brave reporters uncovered wrongdoing by business that government then stepped in to reform with regulations.

But this is all untrue. What regulation actually designed, what big business tycoons worked hand in glove with politicians and bureaucrats to create, was a system of onerous and expensive requirements to force small competitors out of the market. This left only the large companies who had the pricing power to force consumers to pay for the whole thing. The result was that consumers paid more for products that were no better in quality, and small companies had no chance to get in and under price the big companies.

This scenario had been played out many times over the years -- in the meat packing industry, the steel industry, the coal industry, the airlines, and on and on. In 1909 it was Republicans who were calling for government regulation of the steel industry, for example. Said one industry man, “I believe we must come to enforced publicity [socialization] and government control . . . even as to prices.” It was the Democrats who objected to this plan as being "socialistic", and indeed it was a form of central command control of the economy to the benefit of corporations.

Jonah Goldberg writes:

John McCain perfectly symbolizes the Catch-22 of modern liberalism. McCain despises the corrupting effect of ‘big money’ in politics, but he is also a major advocate of increase government regulation of business. Apparently, he cannot see that the more government regulates business, the more business will take an interest in regulating government. Instead, he has concluded that he should try to regulate political speech, which is like decrying the size of the garbage dump and deciding the best thing to do is regulate the flies.