By Steve Orcutt
Businesses fail every day; they fail for a myriad of reasons, poor management, defective product, embezzlement, and so on. There is also another cause overlooked too often – regulations. Many on the left, especially progressives, will tell you we need regulations because without them we will all be dying due to dirty water or air, children will die because of lead in paint and toys, and are food will be contaminated. All of which could be true… if companies didn’t want to stay in business.
Regulations are sold to the mindless public as means to keep them safe from the evil, malintent, baby-killing business owners who are more intent on making money than being safe. Those things could make sense if the business owners were robots and always put profit over human lives. Businesses have a fiduciary responsibility to their customers, not only to provide a quality product or service (sometimes both) but to do so in the most efficient and least wasteful means possible. If a business produces a product that they waste material to create they lose money. If a business operating on the banks of a river produces waste that is harmful to the water and lives in and along the water, they open themselves up to litigation, boycotts – and lose money.
The free-market, if left to operate as such, will correct faults and malfeasants when necessary.
Government regulation only serves two purposes; the first reason is control, and the second is cronyism. The side effects of government regulation are lower profit, fewer jobs, and fewer businesses hence less competition all resulting in higher prices. Government regulation is the reason the cost of medications is astronomical. On average it takes nearly 10 years and hundreds of millions of dollars to get a drug through the Federal Drug Administration (FDA); a regulatory body that is unconstitutional. Many times due to the cost involved, only one company will pursue a drug to treat a condition because the profit margin isn’t there if they aren’t the only manufacturer. Which once again because of a lack of competition allows for a higher cost.
For every drug that is attempted to be produced and sold, it must go through the FDA and be ‘tested.’ But yet every day people die from being administered drugs that are approved by the FDA. You see, the FDA in a small part of their function is to feign an attempt to ‘protect the public’ but a larger part is to line the pockets of administrators, politicians, and levy control over the drug companies. In this instance, you have control and cronyism in play. Government picking winners and losers, under the guise of keeping you safe.
Recently President-elect Donald Trump has indicated that he intends to create a new position in the White House, Regulatory Advisor. The new Regulatory Advisor is to be Carl Icahn, an 80-year-old billionaire magnate, investor, activist shareholder, and philanthropist. Icahn founder and majority shareholder of Icahn Enterprises. He personally holds significant shareholdings in RJR Nabisco, TWA, Texaco, Phillips Petroleum, Western Union, Gulf & Western, Viacom, Uniroyal, Dan River, Marshall Field’s, E-II (Culligan and Samsonite), American Can, USX, Marvel Comics, Revlon, Imclone, Federal-Mogul, Fairmont Hotels, Blockbuster, Kerr-McGee, Time Warner, Netflix, Motorola, and Herbalife.
President-elect Trump’s intended purpose for the Regulatory Advisor is for Icahn to assist him in deciding which regulators to eliminate. At face value, that’s fantastic for the free-market. But look again at what companies Mr. Icahn has interests in, would this not be an ideal position for him (and Trump) to pick the winners and losers personally? Yes. Do I believe that Donald Trump and Carl Icahn are going to collude to better their personal financial positions? Absolutely. I’d also be ecstatic if I end up being totally wrong and the Trump administration rolls back hundreds of thousands of the federal regulations that are on the books weighing down a yoke of oppression of free-market enterprises. Jobs would actually start to multiply, and the stagnant or decreasing quality of life for millions of Americans would start to improve. The game now is to wait and see whether Trump will be the hero his supporters believe him to be or the potential dictator-in-chief many others believe.