Monday, February 20, 2012

Uncle Sam's Clogged Arteries

There are many reasons for the listless, if not moribund, state of the US economy. Today, this Tireless Agorist would like to tackle the topic of the clogging of the arteries of commerce. I'm not referring to the continual degradation of the physical infrastructure on which commerce depends; the roadways, railbeds, waterways and airways along which products move, the systems that bring us clean water and carry away our waste, or the pipelines, electrical generation plants and transmission grid that power our industry, although that would be a good topic for a future posting. In this essay, we'll address the impact of ever-growing regulation on economic production, innovation, and competition.

The Code of Federal Regulations totaled 165,494 pages as of the end of 2010, the most recent data according to the Office of the Federal Register. This is an increase of 132% from 71,224 pages in 1975. These regulations are enforced by more than 50 agencies, and a 2005 study by the Small Business Administration found that the cost of all these rules seven years ago was more than $1.1 trillion dollars a year, more than Americans paid in federal income taxes in 2009. That figure includes only the direct burden placed on consumers. Constraints on innovation, new inventions or products that never reached the marketplace cannot possibly be measured, since they are by nature undefinable.

And note we're speaking only of federal regulations; for businesses involved in interstate commerce, there may be as many as 50 sets of state regulations they must adhere to. Nor does it stop there. Many counties and municipalities have their own sets of rules and regulations that must be strictly adhered to under the risk of financial penalties or even permission to continue operations.

Yet daily there are proposals for even more regulations; on healthcare, on the Internet, on the food we eat, the air we breathe, the automobiles we drive, the homes we live in, and the clothes we wear. Virtually no aspect of life is untouched by the heavy hand of one or two or three or more levels of government.

On the criminal side, things are even worse. At the federal level alone, discounting state, county and municipality criminal justice systems, there are more than 4,500 criminal offenses, detailed in over 27,000 pages of legalese spread across some 50 titles. It's hardly an accident that we have the highest rate of incarceration in the world, with 730 of every 100,000 Americans behind bars, far more than "oppressed" countries such as Russia (529), Iran (333), South Africa (318), Chile (297), Singapore (249), United Arab Emirates (238), Libya (203), Mexico (200), and even China (122), Iraq (101) and Afghanistan (62).

And the concentration of lawyers and accountants is as out-of-whack with the rest of the world as our incarceration rate.

The cost to society of such policies is simply immeasurable, not only in dollars, but in destroyed lives, destroyed families, destroyed communities, and destroyed faith in institutions that are supposed to protect us and which instead the citizens fear may choose to select them as the next target of some obscure administrative regulation or an isolated incident of misconduct.

Hardly the picture of "the land of the free," is it?

Yet the tide seems to be far from turning, as regulations pile upon regulations, crimes upon crimes.

And still we continue to elect lawmakers, and not one lawtaker.

When America was young, the blood of society pumped freely. Few restrictions limited free men, and the opportunities for creativity and effort to blossom were virtually everywhere. You could train privately in any trade, hang a shingle, be judged for competence by your customers, and create a new career all your own, without once having to appeal to some gatekeeper for permission to take action on your plans or allow some third party to pass judgement on your skills.

Cue the minor-key music: here comes the villain.

Naturally, everybody decided we needed a few laws, to keep people from killing each other, stealing each other's stuff, and making promises that they later refused to keep. What we might call "natural laws."

To get laws, you need lawmakers, so the people got together and elected some. And once those critical issues of law were dealt with, the lawmakers still needed something to do to justify their high salaries and posh living. And of course, what they were hired to do was make laws. So they made more laws.

And among the laws those lawmakers passed were laws giving non-elected people their own authority to make laws. And thus were born administrative agencies and administrative "laws." (More like guidelines, really, except they'll take your stuff and throw your ass in prison if you ignore them. )

So now we have a proliferation, like bunny rabbits, of people whose job is to create laws. Which in turn leads to a proliferation, like mosquitos in a swamp, of laws.

And yet we have not one single, solitary group whose job is to get rid of laws.

Of course, once you've dealt with the important stuff, like murder, and theft, and fraud, then you have to consider less critical stuff... but you MUST keep passing laws, that's your job. That's how you get elected.

And once the "important" second-tier laws have been taken care of, like keeping people from killing each other with 2000 pound roadrockets by making people take a vision test, or with handguns by taking them out of the hands of the law-abiding citizens and allowing them only to criminals, you have to start passing really silly stuff, just to keep busy.

Like picking out various of mother nature's blessings, declaring them dangerous, and launching a war on them, starting with those perceived as the most dangerous, such as alcohol, drugs, and tobacco, then prohibiting or restricting ever more mundane substances such as fat and sugar. Like prohibiting things that people like to do with or to each other, such as gambling and prostitution. Never mind that prohibition has never been shown to be successful in the history of mankind, no matter what the substance or the behavior. The upside is the massive expansion of the job market for enforcers, attorneys, and judges, the makers of weapons and the builders of jail cells.

Like "zero tolerance" laws in the schools, and nanny-state laws like "click it or ticket" that seem to contribute mostly to generations of fools surviving to pee in the gene pool. Then come "official song, flower, bird and color" proclamations, and resolutions that declare that our government agrees or disagrees with some restriction or lack of restriction some other government has visited on or lifted from their people.

Or, more dangerously for the citizenry, that our government disagrees with some other government to such a great extent that they're willing to spend vast sums of our hard-earned money to send our children over to kill and be killed until that other government sees things their way.

And let's not forget the laws passed to ensure that currently profitable businesses stay that way, so they can continue to make donations to those lawmakers, so they can get reelected to pass more laws to protect those currently profitable businesses.

Every single one of those laws represents a restriction in the arteries of society; a calcification of the Body Politic that leads to reduced opportunity, a slowing of the flow of goods and ideas that once produced an ever-increasing standard of living.

Every one of those laws leads inexorably toward the eventual collapse of the central circulatory system, once the flow is so restricted that new ideas and new goods have no way of entering the marketplace.

Witness the stories of unemployed inner-city women, aching to achieve, who have been fined for braiding hair without a license. Witness the number of states that have "controlling bodies" and barrier-to-entry legislation for almost any conceivable commercial activity, from butchers to barbers, from interior decorators to psychics.

Witness the cost of a taxicab medallion in NYC.

Go start a small business without a big bank roll, a lawyer and a tax accountant, and try to stay out of jail. Then send me the address of your jail cell, and I'll bake you a cake with a file in it. I hope you're more successful with it than with starting a business bare-handed.

Even easier, and less likely to land you behind bars: try to list a dozen things you do each day that aren't impacted by some form of government control.

From the relief you take each morning in a government-regulated crapper, to the government-approved pillow you rest your head on when you go to sleep, you'll be hard-pressed to complete that "dirty dozen" assignment.

Yet these same lawmakers pontificate endlessly about why the standard of living, which advanced in almost every single decade since America was founded, has hit the skids in the 21st century.

...and that's all I have to say about that.

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