The Partisan Trap

by Russ Roberts on December 28, 2007

in Politics

In reaction to my recent sunny commentary at NPR, a number of NPR listeners have let me know that things are not so good for everyone in the US and that this condition began with the free market policies of the Reagan administration and continue with the Bush administration.

Of course, both Reagan and Bush the younger talked and talk a lot about the power of markets. They claim to believe in markets. But it isn’t the reality. And the Democrats talk about how markets hurt people and how the government must intervene, especially to help the little guy.

But there is little difference between Republican and Democratic Presidents in what they actually do. In what they say? Sure. Both Reagan and Bush talk about individual responsibility and the market blah blah blah. Bill Clinton talked more about feeling people’s pain and the downtrodden blah blah blah. Similarly, in the current presidential campaign, there are stark rhetorical differences between say Giuliani and Romney on the one hand and Obama and Clinton on the other.

But will the actual results be different? Will Hillary double the minimum wage? Change our health care system to be more socialized? Eliminate corporate welfare? Will Giuliani make the health care system less socialized? Eliminate the minimum wage? Get rid of farm subsidies? Stop spending federal money on education?

Most of it is talk and it’s not just because change is hard to achieve. It’s because they really don’t want change. Did Bill Clinton get rid of income inequality? Dent it? The share of income going to the top 1% rose throughout most of the Clinton administration. Was it his policies? The steady rise in the share of income going to the top 1% started rising in 1976. Was it Carter’s doing?

Was Bush or Reagan a hard core free trader in practice? Nope. They used protectionism when it was politically expedient. Just like Bill Clinton signed welfare reform and NAFTA and then chose not to enforce the truck provision of NAFTA because the Teamsters didn’t like it.

Government gets bigger under both Republicans and Democrats. What they spend money on is a little different, yes. But to hate George Bush for being a free market guy is to miss what is really going on. And to hate Hillary because she doesn’t understand the power of markets and to love, say, Mitt Romney, is to misunderstand both of them. They use rhetoric to dupe you. Don’t be duped. Be clear-eyed, not starry-eyed about the game they play.

That’s not to say there aren’t differences between the candidates.

That’s not to say there aren’t differences between the candidates.

Yes, there are differences. But they are so much smaller than our passions pretend.

And to see the differences as my good guys against their bad guys is to be duped by the rhetoric. Don’t be duped.

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{ 50 comments }

Dan December 28, 2007 at 1:46 pm

Did you mean to repeat the sentence "That's not to say there aren't differences between the candidates." twice?

Russ Roberts December 28, 2007 at 2:21 pm

Dan,

Yep.

John Dewey December 28, 2007 at 2:40 pm

Russell,

Changing government regulations is a slow process, but is does happen, doesn't it? It took sustained efforts from Ford, Carter, and Reagan to deregulate trucking, passenger airlines, air cargo, railroads, banking, telecommunications, and petroleum prices. Full implementation of NAFTA also spanned three administrations.

Is it fair to criticize the past six presidents for not achieving everything they promised or proposed? Perhaps so in the case of George H.W. "Read my lying lips" Bush. To be fair, though, our economy would now be in worse shape had we elected Mondale, Dukakis, Perot, Gore, and Kerry.

Some political observers claim that Reagan and the younger Bush compromised principles to get elected and to forestall even worse actions from Congress. Do we underestimate the task they faced?

Russ Roberts December 28, 2007 at 2:55 pm

John Dewey,

I think it matters who is president which is why I have that repeated phrase in the post.

But having said that, I find it remarkable how little it matters. When Clinton raised taxes, the WSJ and others predicted a disaster. They were wrong. When Bush lowered taxes, a different group predicted a disaster. They were wrong.

The regulatory burden on US business has surely grown dramatically since the 1970s when everything is included. Yes, there has been some deregulation and you won't be surprised that I think that was a good thing. But that has been dwarfed by the increase in safety regulation, environmental regulation, and the general increased litigiousness of our culture. Yet the US economy continues to grow and to do quite well. (And yes, I know there are some readers who think that's the cause of our growth. I think they're wrong.)

My point is simply that the passions don't match the reality. And that politicians use those passions to their advantage rather than ours.

Russ Roberts December 28, 2007 at 3:01 pm

John Dewey,

I think it matters who is president which is why I have that repeated phrase in the post.

But having said that, I find it remarkable how little it matters. When Clinton raised taxes, the WSJ and others predicted a disaster. They were wrong. When Bush lowered taxes, a different group predicted a disaster. They were wrong.

The regulatory burden on US business has surely grown dramatically since the 1970s when everything is included. Yes, there has been some deregulation and you won't be surprised that I think that was a good thing. But that has been dwarfed by the increase in safety regulation, environmental regulation, and the general increased litigiousness of our culture. Yet the US economy continues to grow and to do quite well. (And yes, I know there are some readers who think that's the cause of our growth. I think they're wrong.)

My point is simply that the passions don't match the reality. And that politicians use those passions to their advantage rather than ours.

John Dewey December 28, 2007 at 3:06 pm

OK, Russ. Thanks for the explanation.

I've spent the past 25 years in the transportation industry, and in the petroleum industry for several years before that. Perhaps my industries' deregulation achievements since the mid-70's has biased my view.

John V December 28, 2007 at 3:10 pm

Well, Russ,

I agree with your article 110%. Spectacular. This is not surprising to me because I think I lot like you, Russ. I am a libertarian who rolls my eyes at both parties and doesn't whether to laugh or cry half the time.

I think John Dewey, with all due respect to him, exemplifies exactly what you are talking about from the Right though nowhere near as starkly as many others…like from RedState.

I actually do snicker a bit when I see economic libertarians show affection for the Republicans. Ugh. Why? They're not really any better than the Dems in the final analysis.

It's true…passions don't match reality. With all the hubub from partisans over the supposed gaping gulf between most of candidates, you'd think there was a lot more at risk of enormous change than there really is.

If the gap between Hillary/Obama and Rudy/Romney is really a "3", partisans would have you believe it's a "10".

Calm down.

Bill December 28, 2007 at 3:19 pm

While I certainly can't disagree that the differences are less than they appear, someone, an economist maybe, told me that small changes at the margin can make an enormous difference. The difference between Obama and Romney may be "only" a 3 instead of a "10," but compound that 3 over two four-year terms and the result is worth getting excited about.

Per Kurowski December 28, 2007 at 3:22 pm

And add to that the fact that once elected and working from the strength of an incumbent they do not want to be seen as bad as forewarned by their enemies and so they frequently behave in quite opposite directions, which is for instance why you get fiscal deficits with supposedly fiscal conservative republicans and surpluses with democratic happy spenders… and so the difference is even smaller… to the dismay of everyone who believes change is needed.

Patrick R. Sullivan December 28, 2007 at 3:34 pm

Don't discount that Clinton lost Congress to Newt Gingrich and the Republicans in 1994. Without that check on his worst instincts, I doubt things would have gone as well.

Not to mention that the economy is not really where Presidents make their main mark. That's foreign policy, and Reagan was a huge improvement over Carter.

John V December 28, 2007 at 3:42 pm

Excellent point, Patrick

Clinton's perceived successes on spending and budgets as a president MUST be seen through the prism of Newt and Co. Without Newt to balance and battle Clinton, many of the things Dems like Kurowski love to brag about would never have happened.

John Dewey December 28, 2007 at 4:02 pm

John V: "I am a libertarian who rolls my eyes at both parties and doesn't whether to laugh or cry half the time."

Well, sir, I am a conservative who sometimes agrees with libertarians. Conservatives are a minority in this nation, and libertarians are an even smaller minority. Both groups should realize by now that our leaders have no choice but to compromise.

I am not defending Republicans and their spending habits. But I will defend recent presidents who were forced to compromise in order to accomplish anything.

IMO, the majority of this nation favors government intrusion, believing it will benefit them. Their misconception represents a failure to educate the masses in basic economics.

John V: "It's true…passions don't match reality."

As the product of two generations of political activists, I have to ask: when has campaign passion ever been matched by in-office performance? Perhaps after 1964, when liberals and Democrats controlled all three government branches. But when else?

SheetWise December 28, 2007 at 4:05 pm

Yes, there are differences. But they are so much smaller than our passions pretend.

Justices, justices, justices. The differences are larger, and longer lasting than we know or acknowledge.

muirgeo December 28, 2007 at 4:08 pm

"It's because they really don't want change." Russel Roberts

This may be the defining problem of our times. But who is the "they"?

Are "they" the overwhelming majority of Americans who want universal health care, good roads, national parks ect…?

Are "they" the politicians who some how inexplicitly see gain from NOT making big changes? Who are these politicians answering to in NOT making change?

Or are "they" the monied interest who determine who becomes a politician? Are "they" the ones who benefit from monopoly? Are the monied interests the ones who benefit from our political system and our electoral and policy making systems NOT changing. Are they the ones who really benefit from the current tax structure? Are "they" the ones who write the rules, direct the pork and control the elections? Are "they" the ones who benefit from our political division and beliefs that we can make a difference based on who we vote for? Are "they" the ones who push messages of the power of free markets, competition and democracy all the while they use their money to undermine each because they know that their best interest are truly NOT served in a world where these principles are truly upheld?

"Consequently, if economic power is joined to political power, concentration seems almost inevitable. On the other hand, if economic power is kept in separate hands from political power, it can serve as a check and a counter to political power."

Milton Friedman

John V December 28, 2007 at 4:09 pm

John Dewey,

Fair enough.

Russ Roberts December 28, 2007 at 4:12 pm

Patrick Sullivan,

The success of Newt and Co. was not random. It was partially a result of Clinton's election as President. The system is smarter than any individual. The results are the product of human action but not human design.

John Dewey December 28, 2007 at 4:15 pm

Russ: "I think it matters who is president which is why I have that repeated phrase in the post.

But having said that, I find it remarkable how little it matters."

I've been thinking about this. IMO, whoever joins Justices Scalia, Thomas, Roberts, and Alito could matter greatly over the next few years. Mondale, Dukakis, Gore, and Kerry would not have selected such men. Neither will Hillary/Edwards/Obama.

Of course, the next justice wouldn't matter at all if the "Read my lying lips" RINO hadn't put Souter on the Supreme Court.

Jon December 28, 2007 at 4:32 pm

Chris Coyne once told me that the only difference between Republicans and Democrats are who their friends are.

I'm inclined to agree.

Henri Hein December 28, 2007 at 5:06 pm

Henri Hein's political definitions:

Liberal — a person that wants to make his or her issue everybody else's problem.

Conservative — a liberal that don't want to pay taxes.

Methinks December 28, 2007 at 5:08 pm

I actually do snicker a bit when I see economic libertarians show affection for the Republicans. Ugh. Why? They're not really any better than the Dems in the final analysis.

Maybe not, but I find them a lot more optimistic and a lot less inclined toward socialist central planning ideas – "less" being the operative word. "Visions" are irritating to those of us who escaped socialist countries to come here.

IMO, the best outcome is a congress dominated by the opposite party than the one the president belongs to. It seems to bring out the best in both parties – social liberalism of the left and the fiscal conservatism of the right.

I'm grateful to the writers of the constitution for diffusing power in our government. As I watch Putin consolidate power to recreate the same old cult of personality thugocracy I left behind in the 70's, I'm especially grateful for the US constitution and system of government with its checks and balances. A system which doesn't depend on electing the "right" person for the country to continue to do well is the best system of all. (sorry. Just having a patriotic moment)

John Dewey December 28, 2007 at 5:21 pm

Methinks: "As I watch Putin consolidate power to recreate the same old cult of personality thugocracy I left behind in the 70's, I'm especially grateful for the US constitution and system of government with its checks and balances … sorry. Just having a patriotic moment"

No apology necessary. I'm sure most of us appreciate patriotism. And guess what? We're glad you chose to come here – even those of us who cringe when social liberalism is referred to as "the best".

Patrick R. Sullivan December 28, 2007 at 7:19 pm

The system is smarter than any individual. The results are the product of human action but not human design.

The economy is smarter than the individuals, not so the political system. Witness the ability of well focused special interests to get what they want at the expense of the diffused general interest.

Rich Sinda December 28, 2007 at 7:47 pm

Russ, I agree whole heartedly. That is why I wish the nation had elected a Democratic congress 5 years ago. Think of how much less spending we would have with Bush actually using the veto pen. The greatest defense we have is putting people in power who are constantly at odds with each other.

JT December 28, 2007 at 9:40 pm

Russ,

You linked to the econlib article… I have been searching for the original bootleggers and baptists article online, but cannot seem to find it anywhere. Can you (or anyone) provide any help in this regard?

Jon December 28, 2007 at 10:52 pm
Jon December 28, 2007 at 10:58 pm

2nd try (not sure why links get cut off)

http://www.cato.org/pubs
/regulation/regv22n3/bootleggers.pdf

http://www.econtalk.org
/archives/2007/01/bruce_yandle_on.html

Jestak December 29, 2007 at 12:42 am

The regulatory burden on US business has surely grown dramatically since the 1970s when everything is included.

Russell, how about backing up that rather remarkable claim. Name three industries or sectors of the economy which are subject to significantly tighter regulation today than they faced 30 years ago (more or less the date when the move to deregulate began). Just three.

muirgeo December 29, 2007 at 1:17 am

I'm still under the impression it matters a lot. Even if we are restricting the discussion to the economy . The other significant difference NOT seen in the graph is what they are spending money on. Republicans on corporate welfare and Democrats on roads, research and education.

The depression and the current economy are examples of republicans economic results over 20-30 years of rule. The prosperous 50's and 60's serve as good examples of long term democratic policies.

The standard of living for the middle class depends deeply on who is in office.

Comments like this, " To be fair, though, our economy would now be in worse shape had we elected Mondale, Dukakis, Perot, Gore, and Kerry." are laughably in disagreement with the facts.

Mesa Econoguy December 29, 2007 at 3:36 am

That's not to say there aren't differences between the candidates.

Or, differently,

Setadidnadc eht neewteb secnereffid t’nera ereht yas ot ton s’tahT

Mesa Econoguy December 29, 2007 at 4:07 am

I’m confused by “z” facts.

Zey seem to conflict with z actual factz….

http://mwhodges.home.att.net/piechart.htm

[Note to Hillary…….burn remaining Soviet healthcare docs, immediately…]

jp December 29, 2007 at 10:59 am

The greatest defense we have is putting people in power who are constantly at odds with each other.

I agree. At the federal level, at least, the most important thing IMO is to arrange the pieces so that the government "accomplishes" as little as possible.

Per Kurowski December 29, 2007 at 11:13 am

Free market policies? Yes, but only if taken with tons of salt. In fact over the last decades through the global and local strengthening of brands and trademarks and by means of awarding intellectual property rights we have affirmed or created millions of small and big monopolies that flies right in the face of “free markets”

And look at what is known as “the deregulation of the financial markets”. Yes the banks are not confined to work as banks anymore but can actually go outside and play but this has come hand in hand with the mother of all regulations namely that they have to heed the criteria of very few credit rating agencies on almost anything they do.

John V December 29, 2007 at 11:30 am

Muirgeo,

The depression and the current economy are examples of republicans economic results over 20-30 years of rule. The prosperous 50's and 60's serve as good examples of long term democratic policies.

These matters are monetary in nature at the core. Cycles usually are. Tye way you are looking for partisan corollaries to explain matters steeped in larger non-partisan matters is part of what Russ is talking about.

muirgeo December 29, 2007 at 11:31 am

mesa,

I have no idea how anything in your link negates the fact that republicans have far outspent democrats. Of the 9 trillion of accumulated debt almost all of it occured under republicans.

And as my graph shows spending per GDP is massive under the republicans even when, actually worse, when they controled
congress.
So basically you're without factual support.

vidyohs December 29, 2007 at 11:51 am

Jestak,
Allow me to fill in for Russ:
Chemical
Refining
Power
Vehicle
Drug
Sports (at all levels)
Financial
Et. Al.
Thank you very much.

"Russell, how about backing up that rather remarkable claim. Name three industries or sectors of the economy which are subject to significantly tighter regulation today than they faced 30 years ago (more or less the date when the move to deregulate began). Just three.

Posted by: Jestak | Dec 29, 2007 12:42:57 AM"

andy December 29, 2007 at 12:26 pm

Yes, there are differences. But they are so much smaller than our passions pretend.

Just wonder why nobody mentioned the Paul guy yet…do you consider him in the pack as well?

JT December 29, 2007 at 1:21 pm

Jon,

Thanks for the effort, but those are just articles "revisiting" bootleggers and baptists. I still cannot find the original anywhere.

Sigh.

Jestak December 29, 2007 at 5:05 pm

vidyohs–

Of the industries you list:

-banking and financial services have been massively deregulated since the end of the 1970's.

-electronic power generation (I presume that's what you mean by "power") was deregulated in the late 1990's.

-while Big Pharm did not totally succeed in their campaign, in the 1990's, to more or less eliminate the FDA, Philip Hilts' excellent history of that agency makes it clear that the pharm industry is, if anything, regulated less stringently today than in the 1970's.

-professional sports is largely unregulated, as it always has been.

-the chemical industry succeeded in blocking regulations designed to prevent terrorist attacks on chemical production and storage facilities, despite the overwhelming public safety basis for such regulation. This is hardly an indicator that the industry is more stringently regulated.

That's 5 out of 7 where you're clearly wrong in your characterization of an industry as subject to significantly tighter regulation.

I know of no specific reason to think you're right about the other two.

vidyohs December 29, 2007 at 6:25 pm

Jestak,
Well perhaps you just aren't looking at the entire picture of regulation. Are you fixated on price for instance? Regulation of business that costs business in unreasonable ways is not always in your face regulation…….so…let me make you aware of just how unreasonable Sarbannes Oxley and the ADA is to businesses. Sarbannes Oxley does not just apply to the financial industry, it applies to all businesses….and you damn well better be aware of that if you are in business. The ADA? One of the worst pieces of socialist legislation ever crafted and imposed upon a people in the history of the world. And if you aren;'t familiar in all the manifestation of that evil then you have been deliberately denying yourself an education……..read or Dear sir,

vidyohs–

Of the industries you list:

-banking and financial services have been massively deregulated since the end of the 1970's. ((Jestak, Sabannes Oxley is huge! Check out the link below and get a taste of what Sabannes Oxley has done to the business world. This is just one example of regulation that has occurred in the last 30 years.))((Then there is the cost of complying with the ADA, OSHA, EEO. All costly and needless regulation.))
http://www.intelligententerprise.com/183701089

-electronic power generation (I presume that's what you mean by "power") was deregulated in the late 1990's. ((Yes I meant power, but electrical power not electronic. Really, then if all this massive deregulation has taken place why is there any debate on building new coal fired power plants? Why aren't we building new Nukie power plants? Hmmmm, what kinds of regs prevent that and how many of those have been implemented in the last 30 years?))((ADA, OSHA, EEO, Sarbannes Oxley))

-while Big Pharm did not totally succeed in their campaign, in the 1990's, to more or less eliminate the FDA, Philip Hilts' excellent history of that agency makes it clear that the pharm industry is, if anything, regulated less stringently today than in the 1970's.((ADA,OSHA,EEO, Sarbannes Oxley. Philips Hilts' "excellent history" I take to be as slanted as Al Gore's Inconvenient Truth. The drug industry is regulated so tightly that it takes an unreasonable amount of years for new drugs to be brought to the market, because idiots want 100% guarantee that no one single person will be harmed by use of the drug while untold thousands are dying for the lack of them. Stupid regulations))

-professional sports is largely unregulated, as it always has been. ((Really, check the equipment requirements of 30years ago and compare them with the equipment standards of today. You'll see a tightening. Check regulations concerning the safety of the venues, you'll see a tightening of the standards. etc. But last and not least I believe I specified sports at all levels, not just pro sports. And, in ametuer sports the tightening of safety regulations is quite noticable. Hell, it has got so bad that many programs have tightened their regulations so much that the kids can't even keep score for fear of someone getting their feelings hurt.))

-the chemical industry succeeded in blocking regulations designed to prevent terrorist attacks on chemical production and storage facilities, despite the overwhelming public safety basis for such regulation. This is hardly an indicator that the industry is more stringently regulated. ((I grew up in Texas, and I returned to the Houston area 18 years ago. My present wife worked for WellChem, a subsidarary of AMOCO, many friends work for the chemical and refining plants down here. I do legal videography and have sat through lawsuit after lawsuit concerning conformance to and ignoring of regulations. You can't even begin to comprehend the amount of regulations those plants work under. One very visible tightening is regulating the release of any chemical vapor, soot or paticulates, and ordors. There is an immense amount of money being spent for to comply with regulations that have increased and tightened in the last 30 years.)) ((And, yes finally they also have to comply with Sarbannes Oxley, ADA, OSHA, and EEO.))

That's 5 out of 7 where you're clearly wrong in your characterization of an industry as subject to significantly tighter regulation. ((That is 5 of the 7, actually we touched on 6, where your thinking is clearly of the pond scum quality….which means it is purely surface with no depth.))

I know of no specific reason to think you're right about the other two. ((Actually there is only one left, automotive industry and if you can't think of obvious regulations placed on automobile makers in the last 30 years you have been living in a cave. Want to bet that Sarbannes Oxley, ADA. OSHA, and the EEO do not apply as well?))

But, thanks for leaping in and replying, it was fun.

Posted by: Jestak | Dec 29, 2007 5:05:25 PM
Post

Unit December 29, 2007 at 11:35 pm

I'm not partisan and I'm quite realistic of the voting process (read disillusioned). But,
I worry that the Democrat's policies have the potential of being much more damaging (if implemented) than the Republican ones. New government programs seems to follow a "ratchet logic". They are easy to put in place and very hard to get rid of. On the other hand, Republican's policies, that the left considers "bad", such as deregulations, tax-cuts, wars(?), are very easy to cancel and revert, with just a stroke of the pen.

Jestak December 30, 2007 at 1:59 am

vidyohs–

Let me first address the specific industries you make claims about.

1) Electric power: Really, then if all this massive deregulation has taken place why is there any debate on building new coal fired power plants?

I did not claim that there was no regulation at all, but that there was a significant deregulation of electric power generation starting in the late 1990's. Do a google search on the terms "electric," "power" and "deregulation" if you are still blind to that fact.

2) Pharmaceuticals: Philips Hilts' "excellent history" I take to be as slanted as Al Gore's Inconvenient Truth.

Ah, what devastating logic–you refute the conclusions of a book you haven't read by calling an unrelated documentary film "slanted."

The drug industry is regulated so tightly that it takes an unreasonable amount of years for new drugs to be brought to the market

The time period for new drug approval has fallen significantly since the early 1990's, with much of the decline coming in the days of the eeeevil Clinton Administration. President Bush's own, industry-approved choice to head the FDA, Lester Crawford, told Congress a few years ago that from 1993-2001, the approval time for standard drug applications was cut from 22 to 12 months, while the time for priority applications was cut from 13 to 6 months.

3) Professional sports: Really, check the equipment requirements of 30years ago and compare them with the equipment standards of today. You'll see a tightening.

Excuse me, but my impression is that all the equipment requirements in professional sports are imposed by the sports themselves. If you can document 1) the government agency that regulates sports equipment and 2) the ways in which they have significantly tightened regulation since the late 1970's, then and only then will you, possibly, have a point.

Furthermore, since we are discussing business regulation, please don't drag the red herring of scholastic sports into the discussion again.

4) Chemicals. After seeing you swing and miss three times, and badly, discussing regulation of other industries, I think you'll understand that I and reluctant to accept your claims, based entirely on your asserted personal knowledge, about supposed increased regulation in this industry.

Now, let me turn to that mantra you repeat endlessly in your comment: "ADA,OSHA,EEO, Sarbannes Oxley."

First of all, since the issue is whether regulation has tightened in the past 30 years, so OSHA and the EEOC, which were created in 1970 and the early 1960's, respectively, don't apply unless you can document that either has significantly tightened regulations since 1977. In OSHA's case this is very unlikely, as they are notorious for very infrequent workplace inspections (I've seen at least one estimate that given their current staffing level, it would take them over 100 years to inspect each workplace in the US just once).

Now, Sarbanes-Oxley. It is true that there has been a lot of business whining about the costs of Sarbox, but the fact is that there are also benefits to business from compliance. Don't believe it? Check out a study published in the Harvard Business Review by Lee Dittmar and Stephen Wagner, who find numerous benefits to businesses from the Sarbox requirements. Dittmar and Wagner write:

"The areas of improvement go well beyond technical statutory compliance. They include a strengthened control environment; more reliable documentation; increased audit committee involvement; better, less burdensome compliance with other statutory regimes; more standardized processes for IT and other functions; reduced complexity of organizational processes; better internal controls within partner companies; and more effective use of both automated and manual controls. The result is not only shareholder protection, the official purpose of the act, but also enhanced shareholder value."

And finally, the ADA. When the Cato Institute published an attack on ADA a few years back, they had the decency to print a reply by Richard Treanor, a lawyer with extensive experience dealing with disability issues. Treanor noted that many discussions of the costs of ADA were highly exaggerated–often suffering from urban legends, such as the false claim that ADA would require restaurants to print all menus in Braille. He also notes that many ADA accommodations are costless to the company: a review conducted by Sears found that 69% of the accommodations they had made for disabilities in a 15 year period had zero cost, while another 28% cost less than $1000 each.

So, neither ADA nor Sarbox is a trump card that justifies claiming that regulation has significantly increased since 1977. The fact is that, as I noted in responding to Russell Roberts, the reverse is the case.

LowcountryJoe December 30, 2007 at 2:54 am

I believe that market mechanisms are the best way for coordination and allocation to emerge in a society and and economy. If the Right and the Left could just embrace federalism (the ninth and tenth amendments), we would have 50 states competing with one another, continuously, to deliever the desired government for each of their citizens. Of course this would require a concerted effort for a far reaching decentralization of what we currently have for our Leviathan federal government.

jp December 30, 2007 at 9:44 am

1. One of my New Year's resolutions (which I'm putting into practice a little early) is not to debate on the internet. Therefore, I'm just going to post the points I want to make and leave it up to others to accept or reject them. My silence following any response by Jestak (or others) does not mean that I accept or reject what s/he has to say.

2. I appreciate Vidyohs's comments on this and other threads here.

3. As a lawyer, I have firsthand experience of three things: First, it is much harder to fire someone today than it was in 1970. Second, SarBox has been a balls-up. The only people who have reaped net benefits from it are lawyers like me, who have one more thing that publicly traded companies must pay them to do, and overseas financial-services markets, which are scooping up the IPOs that are leaving New York. (FWIW, even Oxley himself seems to be having doubts about the law's usefulness; see http://www.iht.com/articles/2007/03/02/business/wbspot03.php?page=1.) Third, post-9/11 money-laundering fears have resulted in a raft of tightened regulations.

vidyohs December 30, 2007 at 1:42 pm

Your own question Jestak, tell me where in it you see the request you made restricted to government regulation? But, that is beside the point, see below. Government threat is enough and always there.
——-
"Russell, how about backing up that rather remarkable claim. Name three industries or sectors of the economy which are subject to significantly tighter regulation today than they faced 30 years ago (more or less the date when the move to deregulate began). Just three.
Posted by: Jestak | Dec 29, 2007 12:42:57 AM"
——-
And sir, my response regarding sports clearly specified "at all levels", you limited your response to professional sports. By doing so you ignore the fact that all of those regulations made by private organizations are done under the threat of "either you regulate yourself, or we (government) will step in and regulate you our way." Fact not fantasy. I might also add that sports "at all levels" definitely qualifies as "a sector of the economy". Furthermore, let's take the example of the private buiness calling itself the Virginia Military Institute (VMI). A private organization to be sure, but pressured by threat of government action to regulate itself and allow females to attend. Costly and assured general degeneration of the quality of their product.

You castigate me for not reading Phillip Hilt's book, yet how did you come to that conclusion? Because I thought it was a hack job like Al Gore's "An Inconvenient Truth"?

You argue points you have no way of verifying. A foolish exercise at best, stupid at worst.

OSHA has been around to be sure for a long long time, but come down here to Houston and go up and down the ship channel to all the chemical and refining plants and tell them they can ignore the threat of OSHA inspection and action. LOL. Add to that the state inspectors who are monitoring their ability to scrub their exhaust, odor releases, etc. Flawlessly, of course not, but the regulation layer increases steadily and more and more effort (money) is diverted to tilting at windmills.

As for the ADA, a large business like Sears may have complied with low cost in relation to its total bottom line, but Joe's Barbershop which never sees a woman is till forced by zealous enforcers to install another restroom and label it "women" and to ensure both are of sufficient size and equipped to handle handicapped people, at a cost that he finds difficult to justify or absorb. Yes the EEO has been around for a long time as well, but I can guarantee you that in the last 30 years new regulations have been added while none or stricken, and the use of the EEO to force non-productive and disruptive workers on companies has expanded. I sit through enough of those depositions also. There are business that have been sued, not for rejecting someone unfairly, but because they might have had a person applied. Fact not fiction, and because of the changes in the last 30 years.

Ah well, you will read and disagree and I know that. Some people just want to see the oranges and never see the trunk or roots of the tree. Consequently they miss a lot of what an orange tree is about.

muirgeo December 30, 2007 at 4:58 pm

"Yes, there are differences. But they are so much smaller than our passions pretend."

Just thinking about this and really don't believe it. Simply the decision to invade Iraq could have easily gone either way not to mention the planning after the invasion. I wasn't gonna bring this up as this is an economics board but on an economics basis alone when is the spending of as much as one trillion dollars of tax payers money a "small thing"?

Another president might not have chosen to go in to Iraq. I think the difference in dollars and lives and national identity are NOT smaller then my passions pretend. The differences of making that one decision were huge and that was just one decision. Was the multi-billlion dollar Medicare drug bill a small thing?

Russ Roberts December 31, 2007 at 12:46 am

I hope to post soon on the regulation discussion.

Muirgeo, the post was about economics issues. But even on foreign policy where the President has much more autonomy, it is possible that Gore or Kerry would have gone into Iraq when Saddam refused to let the UN inspect the sites. Would it have gone the same way? Of course, not. But the point is that political forces, particularly on economic issues, trump any supposed principles that a politician allegedly has.

But I think it

Sweetie December 31, 2007 at 10:24 am

Russ,

I seem to recall in 2000 a mini-controversy over GWB 'talking down' the economy when he pointed to leadining indicators that indicated a slowing of what was recently a strong economy (can you still use the word 'strong' when in retrospect the economy was at the end of a bubble?). In 2007, GWB's 2000 language seems tame compared to what I'm seeing spoken by leading candidates ('slowing' vs just browse any Dem candidate website). Any idea what explains this?

Tim_Ohio December 31, 2007 at 10:58 am

The biggest similarity the Dems and the Repubs share and the major reason that nothing changes is that both sides are on the take. The corporate lobbyists have bought & paid for a large section of our politicians on both sides of the aisle.

They worry more about getting re-elected and keeping their personal foibles out of the press than they do serving "we the people".

This year, I too will be voting on "one issue". My issue will be honesty, integrity & consistency. I will be voting for Ron Paul.

He IS different from the other politicians. He tells you what he thinks (sometimes, painfully so), doesn't pander to whichever group's vote he is trying to woo at the moment and he has a 20 year history of consistency.

I don't agree with all of his positions, but he does meet my "one issue"

Mesa Econoguy December 31, 2007 at 10:16 pm

Holy shit, muirduck actually responded to me above.

Well, muirduck, hmmmm…………….

1) correct, government has gotten much larger under Republi- er, Democr- er, government. Very good. That’s the trap, idiot.

2) government is in the unique position of these 2 powers, muirmoron: a) ability to enact its own laws, and b) ability to print money; these are very powerful privileges, abused by both parties.

3) government, like any other socio-political entity is in the business of self-interest, and self-preservation which, if you have a brain, leads to increased bureaucracy and larger size, with zero accountability, kind of like Barry Bonds.

This is why it sucks to go get your license renewed, and why you have to wait so long at the ER (soon to be longer if we elect Hillary).

Republicans suck at politics, especially the politics of giveaways. Democrats invented that. Why vote for the imitator party when you can have The Real Thing?

Your graph fails the fundamental economic premise that you started the whole thing.

Murigeo, my wish for you in this new year is to “be the scarecrow”:

Get a goddamn brain, you insipid troglodyte.

muirgeo January 1, 2008 at 1:31 pm

Mesa,

What are you like 9 years old? Such a post just re-affirms that you have nothing to counter with.

I know you don't understand what you're going through but us adults call it cognitive dissonance.

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