Liberals Discover Conservative Critique of Regulation

[cpwill]

Feel The Rage

...What a spectacle this has been, with the anchors from MSNBC, the various columnists and his Newsweek Boswells furious and frustrated that the President hasn't demanded the heads of BP executives on pikes. All he's done so far is allow his Attorney General to loudly announce a criminal investigation of the spill—nothing demagogic about that—in mid-crisis and without any apparent criminal behavior on the public record.

The liberals' fury at the President is almost as astounding as their outrage over the discovery that oil companies and their regulators might have grown too cozy. In economic literature, this behavior is known as "regulatory capture," and the current political irony is that this is a long-time conservative critique of the regulatory state.

The Nobel economist George Stigler of the University of Chicago was one of the concept's main developers, and it is a seminal plank of the "public choice" school of economics for which James Buchanan won the economics Nobel in 1986...

In the better economic textbooks, regulatory capture is described as a "government failure," as opposed to a market failure. It refers to the fact that individuals or companies with the highest interest or stake in a policy outcome will be able to focus their energies on politicians and bureaucracies to get the outcome they prefer.

Perhaps if liberals read more conservative economists, they might understand that this is a common consequence of the regulatory state that they have so diligently constructed over the decades. It is also a main reason that many of us are skeptical of the regulatory solutions routinely offered in response to every accident or business failure...

How remarkable it is to see a President who has put such exorbitant faith in the power of government being excoriated by his allies for a government failure. It's almost as astonishing as seeing Carol Browner, the White House green czar and long-time scourge of fossil fuels, being interrogated on NBC for excessive deference to Big Oil. Sometimes life really is fair.

 

[ashurbanipal]

In economic literature, this behavior is known as "regulatory capture," and the current political irony is that this is a long-time conservative critique of the regulatory state.

It seems to me that conservatives use this as a reason to suggest that less regulation is the best course of action--because (the reasoning goes) it's going to result in this anyway.

Liberals, on the other hand, are angry not because there was regulation in the first place, whether it was doomed to failure or not. Rather, they are angry because the regulators didn't actually regulate.

It strikes me that there is a similar--almost identical--argument on an entirely different subject where the sides are reversed. Many conservatives support abstinence-only sex education. Liberals critique this approach by showing that, no matter what, kids are going to have sex, and since that is so, we are better served teaching them about it and about the proper use of birth control. Conservatives respond that this is a failure of discipline inherent in society; we fail to instill discipline amongst our children and so they fail to contain their sexual urges until marriage.

The problem here is that the oil leak is absolutely devastating to the environment, otherwise known as the primary economy by which the raw materials of wealth are produced. Regardless of whether there was ineffective regulation or no regulation, this would have happened. The only thing that might have stopped it was effective regulation.

There is a fairly robust conservative literature on political strategy that goes all the way back to the 1930's, in which one primary goal is to make sure that government is made purposefully ineffective. Over time, a government that is obstructed at every turn will be less and less effective, and the national narrative will turn more and more in favor of those who idealize small, non-regulatory government.

Lest you think I blame conservatives exclusively for the downfall of America, I would have to point out that behind most of these kinds of issues is a basic lack of thinking ability among the American public. And that is due to liberal reform of education. The reason we lack discipline (in part) is due to that breakdown of education at the most fundamental levels. Our regulators and lawmakers are susceptible of regulatory capture because they lack the wisdom that education can (and once did) provide.

 

[samsmart]

Feel The Rage

...What a spectacle this has been, with the anchors from MSNBC, the various columnists and his Newsweek Boswells furious and frustrated that the President hasn't demanded the heads of BP executives on pikes. All he's done so far is allow his Attorney General to loudly announce a criminal investigation of the spill—nothing demagogic about that—in mid-crisis and without any apparent criminal behavior on the public record.

The liberals' fury at the President is almost as astounding as their outrage over the discovery that oil companies and their regulators might have grown too cozy. In economic literature, this behavior is known as "regulatory capture," and the current political irony is that this is a long-time conservative critique of the regulatory state.

The Nobel economist George Stigler of the University of Chicago was one of the concept's main developers, and it is a seminal plank of the "public choice" school of economics for which James Buchanan won the economics Nobel in 1986...

In the better economic textbooks, regulatory capture is described as a "government failure," as opposed to a market failure. It refers to the fact that individuals or companies with the highest interest or stake in a policy outcome will be able to focus their energies on politicians and bureaucracies to get the outcome they prefer.

Perhaps if liberals read more conservative economists, they might understand that this is a common consequence of the regulatory state that they have so diligently constructed over the decades. It is also a main reason that many of us are skeptical of the regulatory solutions routinely offered in response to every accident or business failure...

How remarkable it is to see a President who has put such exorbitant faith in the power of government being excoriated by his allies for a government failure. It's almost as astonishing as seeing Carol Browner, the White House green czar and long-time scourge of fossil fuels, being interrogated on NBC for excessive deference to Big Oil. Sometimes life really is fair.

So what you're saying is that since industries and regulatory agencies may get too cozy with each other, which is what happened with the government not exercising it's legal authority to force BP to use measures which would have prevented the oil spill, this proves conservative ideologies against regulations, which, if such ideologies were implemented, this oil spill would have still happened?

That still doesn't make conservative economic policies as endearing as you think it does.

 

[hazlnut]

Feel The Rage

...What a spectacle this has been, with the anchors from MSNBC, the various columnists and his Newsweek Boswells furious and frustrated that the President hasn't demanded the heads of BP executives on pikes. All he's done so far is allow his Attorney General to loudly announce a criminal investigation of the spill—nothing demagogic about that—in mid-crisis and without any apparent criminal behavior on the public record.

The liberals' fury at the President is almost as astounding as their outrage over the discovery that oil companies and their regulators might have grown too cozy. In economic literature, this behavior is known as "regulatory capture," and the current political irony is that this is a long-time conservative critique of the regulatory state.

The Nobel economist George Stigler of the University of Chicago was one of the concept's main developers, and it is a seminal plank of the "public choice" school of economics for which James Buchanan won the economics Nobel in 1986...

In the better economic textbooks, regulatory capture is described as a "government failure," as opposed to a market failure. It refers to the fact that individuals or companies with the highest interest or stake in a policy outcome will be able to focus their energies on politicians and bureaucracies to get the outcome they prefer.

Perhaps if liberals read more conservative economists, they might understand that this is a common consequence of the regulatory state that they have so diligently constructed over the decades. It is also a main reason that many of us are skeptical of the regulatory solutions routinely offered in response to every accident or business failure...

How remarkable it is to see a President who has put such exorbitant faith in the power of government being excoriated by his allies for a government failure. It's almost as astonishing as seeing Carol Browner, the White House green czar and long-time scourge of fossil fuels, being interrogated on NBC for excessive deference to Big Oil. Sometimes life really is fair.

50% informative definition of 'regulatory capture', however your argument tanks at the section marked in red.

You're calling corruption and influence a common consequence, as if we just removed regulators from the equation, or changed some other variable, that would eliminate the 'regulatory capture'.

Perhaps if you read your economic texts more carefully you'd understand that the risk of regulatory capture suggests that regulatory agencies should be protected from outside influence as much as possible,

 

[cpwill]

You're calling corruption and influence a common consequence, as if we just removed regulators from the equation, or changed some other variable, that would eliminate the 'regulatory capture'.

naturally. remove the regulator and obviously he can't be captured. which isn't really the point - you need some regulation; particularly with regards to pollution. the point is merely that regulators will tend towards supporting the leading entities in the field they regulate. increasing or expanding regulatory oversight of an industry typically only increases the incentive for those who are regulated to divert more resources from economically productive activities to capturing the relevant government bureacracies.

Perhaps if you read your economic texts more carefully you'd understand that the risk of regulatory capture suggests that regulatory agencies should be protected from outside influence as much as possible,

except of course that the incentive for the regulated to capture the regulators is always greater than those who are temporarily scandalized by a particularly egrigious example.

 

[winston53660]

So the rich are getting poor big whoop. Now it is some body else's turn to get rich.

 

[cpwill]

well, and all those poor suckers who thought one day they would be able to retire.

 

[hazlnut]

well, and all those poor suckers who thought one day they would be able to retire.

Exactly - Thank you W. for appointing inept people to head the SEC... And thank you congress for progressively watering down banking and finance regs....

Had they just disbanded the SEC, Madoff would have never happened...:roll::roll:

 

[cpwill]

Exactly - Thank you W. for appointing inept people to head the SEC... And thank you congress for progressively watering down banking and finance regs....

water down? try actively forced. the housing crises wasn't the result of some wild market operating without rules; it was the result of deliberate policy decisions made by at least 3 Presidents and their concurrent US Congress.

Had they just disbanded the SEC, Madoff would have never happened...

where would the pro-government-control advocate be without his straw men...