Regular readers in this forum know that big corporations tend to be among the most vocal proponents of new regulation. The big guys can afford the additional mandated costs of the regulation, while the small fries hoping to knock the big guys from their perch struggle to deal with the additional burden established by government regulators.
In the latest Commentary magazine (not yet posted online), William Voegeli explores the situation in more detail. His article spells out “Why Corporations Love Regulation.” Voegeli starts by noting the 2011 Fukushima nuclear disaster, 2010 Deepwater Horizon oil spill, and 2008 financial panic all occurred in highly regulated industries.
These three disasters are but a few examples in a long record of stunning failure in highly regulated realms, and one might think they would lead a thoughtful person to ask a fundamental question: What, exactly, are gargantuan regulatory regimes for?
The question ought to compel America’s liberals, and Americans in general, to confront an insidious dilemma from which there is no logical escape. Presumably, regulation exists to protect ordinary people and to prevent catastrophes. Neither, of course, happened in the course of these three recent examples of regulatory breakdown. That is because the political power vested in interventionist government bureaucracies responds to those most adept at exerting pressure and making appeals — and those adept players are rarely the ones most in need of assistance.
In fact, gargantuan regulatory regimes both sustain and are sustained by an unholy alliance of big-government liberals and the cunning corporatists who have learned how best to game the system and use it to their advantage. This conduct, often called “rent-seeking,” is the result of a metastatic spiral. The growth of activist government has made necessary the growth of a vigorous, shrewd, activist lobbying sector.
