The USA, home of capitalism and the free market, is being overrun by Socialist styled regulatory excess according to Economist Shayne Heffernan.
The USA must develop a better approach to regulation.
Firstly, every piece of legislation must pass a proper cost-benefit analysis by people not connected to Political Parties or the Lobby process. These results should public and properly considered before any the rule even faces a vote. Reactionary regulations like the Patriot Act must include sunset clauses, so that they expire unless Congress explicitly re-authorises them.
Secondly the legislation must be simple, the Constitution covers 2 pages, why do new bills need to be in the 1000′s. Regulators should pass simple rules, and then leave regulators to enforce them.
Unreasonable judgments should be subject to swift appeal. Regulators who make bad decisions should be easily removed. None of this will resolve the inevitable difficulties of regulating a complex modern society. But it would mitigate a real danger: that regulation may crush the life out of America's economy.
Deregulation is the Answer
Deregulation is the reduction of state and federal government oversight of industries and business. This is achieved by the repealing of laws that restrict trade and competition, deregulation is the cornerstone of any capitalist model. Deregulation provides a number of systemic economic benefits; industries may become more efficient in deregulated economies.
Obama has Over Regulated America
3 leading examples of the Obama Socialist controlled state are:
More than 400 new rules ultimately will be imposed. Consider that regulators have written 185 of them, totaling 5,320 pages.
When the Volcker Rule finally emerged for public comment, the text had swelled to 298 pages and was accompanied by more than 1,300 questions about 400 topics.
2700 pages to cover a single industry.
Reduced Cost of Government
Society can benefit from a reduction of bureaucracy. Resources not spent on regulation can be channeled to other programs.
Deregulation aids industry consolidation. For instance, a 1997 law allowing out-of-state holding companies to buy banks allowed strong banks to acquire weaker-performing banks.
Even proponents recognize certain pitfalls of deregulation. For example, the banking crisis that began in 2007 was in part caused by deregulation of banks in the 1990s. Laws allowing banks to sell exotic instruments, such as mortgage-backed securities, complicated the crisis when valuing those securities became excessively difficult. In the end some banks failed, however, mistakenly the US Government choose to use tax payers funds in a massive an unnecessary bail out. Had those banks collapsed in 2007 new banks would have already corrected the faulty model and be operating businesses that work now.
Deregulation lowers barriers to entry in a given industry. When more firms enter an industry, competition increases and consumers have more choices for products and services. Individual businesses tend to decrease prices, to achieve a more competitive position in the market.
Deregulated industries provide cost savings to customers. By greatly reducing or eliminating tariffs, deregulation can lower prices; company profits increase and cost savings can be passed on to customers.
The government's many regulatory agencies include the Environmental Protection Agency and the Federal Communications Commission. Some employees of these huge federal agencies draw up regulations, while others monitor companies and people to ensure compliance. These employees' salaries are paid for with tax dollars.
One reason for deregulation is the tax savings realized from eliminating the regulatory infrastructure. Deregulation eliminates the need for government quality checkers and specialized quality-control equipment. It also eliminates the need for the lawyers, drafters and clerks required to formulate the language of regulations. The savings can be used to cut taxes or spent for other purposes.
Regulation has a powerful effect in the business world. For example, antitrust laws and banking regulations can restrict the growth of large companies. Such regulations are designed to prevent monopolies or overwhelming concentrations of power within a given industry, but they also can hamper a company's ability to make a profit. Unregulated industry has shown an ability to grow faster than regulated industry.
Deregulation of the banking industry, a process that began in 1975, increased competition among large banks, giving consumers access to lower interest rates and more efficient loan approval methods.
As a result of the Riegle-Neal Act of 1997, banks were no longer limited geographically in their ability to buy out their competition and open new branches. The result was a drastic reduction in the number of smaller, local banks. In their place were larger national banks with branches all over the United States, and with banking, lending and investment operations all under one roof.