Friday, June 4, 2010
When the current financial crisis hit, we regularly heard cries from the left that since the era of Ronald Regan we have deregulated our economy and this ultimately led to, or contributed to, the current financial crisis. This mantra expanded even further with the current issues with the Gulf Coast Oil spill. We regularly hear that we attempted to let businesses regulate themselves, and this ultimately failed. However, us classical liberals look at the past 30 years and are befuddled that anyone would call this period an era of a deregulated economy. Without any real data, both sides could be correct. Recently the Regulatory Studies Center at George Washington University released a publication that looks at the budgets for the US regulatory offices. If we did have a 30 period of deregulation, we would expect the budgets for US regulatory offices to decline, correct? However, what the Regulatory Studies Center report finds is that regulatory budgets increased during this 30 year period. In fact, they not only increased, they skyrocketed. If you doubt this, you can locate this report on their website, located at: http://www.gwu.edu/~regstudies/Home.html. Does this mean that some regulations were removed that ultimately were beneficial? No. However, this does seriously call into question the whole mantra that the past 30 years have been a period of deregulation.
Tuesday, June 1, 2010
You know, as an informed population we would feel insulted if the government of this country attempted to pass a law that violated the law of gravity. Think of the benefits of such a law. We could save millions of gallons of aviation fuel if airplanes did not need to fight against gravity. We would look at these arguments as complete nonsense. Even if such a law was passed, the universe does not care. Gravity would still function and the law would be useless. However, as a population we do not seem to care when our government passes similar laws that violate similar immutable laws, such as the law of supply and demand. Minimum wage laws as such laws. If you raise the price of labor, assuming all else constant, the quantity of labor demanded declines. This is a fact and no law can change this. That is why I find such laws so ridiculous. Mark Perry talks about this in his post on his blog. I would recommend that everyone reads his post on the minimum wage and teenage unemployment.