Maybe Government Shouldn’t Just “Get Out Of The Way”

A number of years ago, I read a book by a well-regarded libertarian academic, arguing against most government regulation. I don’t remember a great deal of it, but I do vividly recall his argument against the FAA’s assignment of air lanes (and actually, the agency’s very existence): he argued that the choice of airplane paths should be left to the airlines. Once a couple of planes collided midair and they got sued for big bucks, airline CEOs would get together to work out routes and ensure that it didn’t happen again.

Maybe I’m just a weenie, but I’d prefer not to be on one of those planes that collided.

I thought about that argument when I read the Sunday New York Times article attributing the two Boeing disasters to lax government regulation. Evidently, the officials charged with oversight allowed Boeing to “self-certify” the safety of many of its components and processes–as a result, regulators had never independently assessed the risks of the software known as MCAS when they approved the plane in 2017.

When you put the fox in charge of the henhouse…..

It has been an article of faith of the GOP that there is just too much government regulation–their default position is that most state intrusion into the marketplace is illegitimate and unnecessary. They seem unable to comprehend why government regulations were ever created.

Not long after the events that triggered the Great Recession, the New York Times ran a column by Edward Glaeser, in which he discussed the importance of both the public and private sectors in sustaining a workable market economy. Among his points:

Markets are built on both private entrepreneurs and public law enforcement. For centuries, investors have relied on courts to enforce contracts. Who would buy a company’s shares if the law didn’t impose a fiduciary duty on their issuer? Every person with a bank account in the United States relies on the government to protect his or her assets. Taxpayers also trust that the government can make the costs of overseeing the banking system reasonable.

So who failed? Certainly, the shenanigans on Wall Street remind us that capitalists are not angels, and that unchecked, their mischief can do much harm. But the point of financial market regulation was to ensure that misbehavior would not imperil the entire system.

Are some regulations onerous? Stupid? Unneeded? Sure. But even bigger problems emerge from inadequate regulation and/or enforcement.

Glaeser was writing about the importance of government’s role in financial oversight, an issue that Elizabeth Warren has consistently raised. It takes only a short walk down memory lane to remind us of numerous others.

The BP oil spill in the Gulf has been attributed to inadequate inspections of drilling machinery; the collapse of the I35W bridge was attributed to deficient government infrastructure inspections; the mine collapse in West Virginia occurred because regulators failed to cite and punish the owner for refusing to install required safety equipment; the Enron, Worldcon and Madoff scandals were enabled by a lax SEC.

As a consequences of such inadequate oversight, thousands of people were harmed. Hundreds died.

We rely upon the Food and Drug Administration to ensure that our medications are safe and effective, our chickens free of e coli. (As I tell my students when we discuss regulatory processes, I’d just as soon not have to test the chicken I buy in the supermarket myself when I get it home.)

We rely on the Consumer Product Safety Commission to ensure that the toys we buy our children are free from toxic paint and dangerous parts.

We rely on the FAA to independently inspect the aircraft we fly in, and to regulate those flight paths so that we don’t meet midair.

Caveat emptor is no substitute for competent government oversight–and right now, Americans do not have a competent government.


  1. The current meme that business (and therefore business people) are more qualified to administer our nation is a red herring. You only have to talk to an MBA to find a very narrow and specific perspective that usually does not involve ethics, let alone altruism. Our present administration could be the poster-boy for the disaster that ensues when we trust corporate culture to take over running a country. For everyone who complains of how they are treated by big banks, etc., remember that is exactly what to expect when for-profit ideology becomes a national authority.

  2. How many decades have the Koch brothers and their band of billionaire friends been paying off both federal and state legislators to downgrade or eliminate regulations that ensure safety for citizens? They believe that any regulation of their industries should not cost them a penny of their profits.

    They created ALEC to write their sweetheart bills for state legislatures and it has been wildly successful. The libertarians that demand their corporate profits not be held hostage by any regulations whatsoever have no shame and their greed makes them less than human.

  3. Regulations are only as good as they are enforced; the hazardous dumping by all has been regulated for many years but ignored as corporations create “cancer clusters” throughout this country and ignored regulations regarding infrastructure causes streets, highways and bridges to crumble. Now the EPA regulations are weaker or gone, thanks to Trump and his desire to provide his corporate cronies fewer regulations to operate under thereby making them wealthier. The same is true of our laws; they are only as good as they are enforced, that includes internal regulations on our safety officers, some of whom are still a danger on our streets.

    As for those “unnecessary” air lanes imposed and enforced by government regulations; try to find the documentary “Grounded”; those Air Traffic Patrolers who knew every air lane and the location of every airport in this country on September 11, 2001, found a place for every one of the thousands of airplanes in the air on that fateful day. They cleared the skies by landing all planes in airports equipped to allow jet liners to land and park nose-to-tail and wing -tip to wing-tip and smaller planes to land in smaller airports. Early on, they were “flying blind” not knowing which air planes had been skyjacked and which were in the air lane they were assigned to. They worked as “one” to accomplish this within only a few hours that day.

    “We” rely on government regulations to protect us, our families, our neighborhoods, our cities and states…our entire country. Trump ignores all regulations, ordinances, rules and laws and intends to rule this country under his own lack of cohesion, hour-by-hour brain contortions to maintain control by his created chaos. It got him appointed to the presidency in 2016 and it will again in 2020. We who work within the guidelines of logic, common sense and sanity cannot understand the inner workings of his brain and the entire Republican party is running to keep up with his Tweets and rants to keep him where he is. Evidently this government has no regulations requiring duly appointed department heads at all times with full staffs in operation. Can we survive under these conditions?

    Late yesterday I posted another comment asking legal questions which works into the issue today regarding regulations and/or laws pertaining to our current Republican administration.

  4. Don’t forget about the emissions problems VW had because it was allowed to do its own testing of the software that regulated diesel emissions. Rather than lose power, the company allowed the system to pollute the air. And the water quality problems in Flint, MI occurred because the director of the EPA office in Chicago didn’t pay attention to what was going on – until an academic in West Virginia blew the whistle.

  5. A corporation is wholly responsible to maximize profits for shareholders. Period.

    There is zero social responsibility.

    That’s where regulations kick in but you so aptly put it, we have an incompetent government. In fact, our laws like RTW have been put in place to maximize profits over workers and clients. It’s called unfettered capitalism and both political parties are subservient to corporate masters. The debates revealed that much if nothing else.

    Monopolies need to be broken up and the banks need to be regulated. We need a much stronger government but the politicians (90%) of them are cowards or bribed or both.

  6. All of those Libertarians and Conservatives hate government regulation until something negatively impacts them personally. Here in sunny southwest Florida, they’re all clamoring for the government to keep our water clean and algae and red tide free. It wasn’t that long ago that Pam Bondi, then Attorney General of Florida, was joining a suit against EPA to block plans to clean up the Chesapeake Bay. Can you say hypocrite, boys and girls??

  7. do we just guess how many people were killed,disabled,financially ruined by no oversite? say whatcha want, im tired of seeing class action lawyer ads for the lack of, and still see the problems stock still profit from killing people. kinda like the new scam madical insurance policies being offered now, a total lack of substance..greed,to kill…

  8. Sorry, Todd Smekens, but the role of a corporation goes much further than simple profits. A company that isn’t a good corporate citizen (ethical, altruistic to a degree, enabling of their employees to give back to the community, etc…) is one which simply takes without offering a fair deal in return. Right to work laws, the destruction of unions, the enormous tax cut to corporations recently given, and the lack of adequate compensation for workers are all the evidence I need to show profits alone are a specious measure. And don’t forget we shareholders have no voice when the majority of voting shares are held and controlled by the oligarchs and their enablers (read: hedge funds, pension plans, etc…) who could give a rat’s ass about the public. I appreciate and will defend your right to your opinion, but I disagree with it in the strongest possible terms.

  9. Todd gets it mostly right. Capitalists, unregulated, are, by definition, blind to anything BUT profits. Karl Marx saw this in the middle of the 19th century when he wrote “Das Kapital”. Humans simply haven’t evolved enough mentally to self-regulate as individuals, never mind huge societies.

    At least there are enough cogent people still around who understand that regulations are necessary. The blind, “conservatives” who decry regulation are the most primitive intellectually and should never be allowed in government.

  10. Studies of all “crimes” show that the greatest deterrent is the likelihood of being caught, not the supposed punishment. So, along with cutting regulations, make sure the regulators have tiny staffs. We have seen this done so well for the IRS so that statistics show that a working class person is more likely to get dinged for a tax issue than a wealthy one.

    Another rarely discussed issue is that the government doesn’t attract (and can’t pay) the best and brightest to regulate. Corporations and the rich can afford to create workarounds and runarounds with armies of high-paid lawyers so that it just isn’t worth the trouble to try to convict. What if the heroes and top paid legal minds were working for “the people”?

  11. Even a superficial examination of history will conclude that business cannot be trusted to act in the best interests of its community and workers. Any entity that excuses its actions with the words, “Sorry, nothing personal. It’s only business,” has little ethical or moral grounding.

  12. A bit from Shelia above, “Once a couple of planes collided midair and they got sued for big bucks, airline CEOs would get together to work out routes and ensure that it didn’t happen again.”

    No, that is not what would happen under Corporatism after a plane collision. The CEO’s and Lobbyists would get together and buy up some Elected Officials. Then we would hear all about the onerous class action lawsuits, next piece of legislation would be laws limiting airliner liability to trivial amounts, or by the very act of buying an airline ticket, you would agree to give up any civil remedies and be subject to mediation. Of course the mediators would be selected by the airlines.

    The Republicans have as their guiding light Ayn Rand, who said, “My philosophy, in essence, is the concept of man as a heroic being, with his own happiness as the moral purpose of his life, with productive achievement as his noblest activity, and reason as his only absolute.”

    This philosophy fits to a “T” President Agent Orange, “his own happiness as the moral purpose of his life”. Self centered egotism, becomes the purpose for existence.

  13. Who believes that make more money now regardless of the impact on any others ever is the only rule that is necessary for civilization to function? It is the only rule of capitalism.

    I’ll tell who does believe it to be the only rule that civilization needs – the millions of Americans (and Brits, incidentally) who chose to be exposed to entertainment media politics and learned very little of the liberal democratic body of knowledge from performances there. They thought it was education but in reality it was paid politics from people who wanted to make more money now regardless of the impact on any others ever.

    What do the sponsors, the performers and the audiences have in common? The firm belief that life is competition and they can choose the rules by being ruthlessly competitive, beating everyone else.

    While that works within many ways to make a living, sports and entertainment come to mind, in the big picture it destroys the means that humanity, especially over-crowded connected in real time highly technical humanity with the collective power to consume their only home in the universe, needs to survive.

    On the other hand, those who believe that the only rule that we need to follow is to live in ways that are sustainable rather than of temporary short term value have their backs to the wall and need to use the liberal democracy that we invented, the freedom of self government, in order to live collaboratively and to take back what was taken from us.


  14. The rollback of Glass-Steagall directly led to the meltdown called the great recession. The realization that letting, as you say, “the fox guard the hen house” was obviously a bad idea. But then, how many times you have to get hit in the head with a hammer and realize that it hurts? In May 2018 Trump signed the bill rolling back critical sections of the Dodd-Frank regulations that tried to fill the gaping hole in the regulations that Glass-Steagall plugged. The EPA and the Clean Water Act, made sure we were not drinking arsenic and mercury when we turned on our tap. It also helped clean up our waterways. Back in 1969, the Cuyahoga River was literally on fire in Ohio. In Chicago, the river caught fire and burned down several bridges. Now this is just in 1969, I remember these things, and now they are swimming and fishing in these rivers. It’s not like this happened 100 years ago or 200 years ago and no one remembers how it was before. So why does the GOP try to circumvent the Clean Water Act? Why do they try to weaken it? Concerning the FDA, I truly believe China purposely sends contaminated food to the United States. It still the wild wild West over there, people are dying by the gross from contaminated food in China. In China, they use something to cook their food called gutter oil, it’s the dredge from manholes boiled down until all that’s left is the oil to skim off the sludge. They use this and even some of the hotels in China to cook the food. See, this is where regulation prevents contamination. But it’s all about the dollar in the United States. And obviously, the GOP is for the good old American greenback at the expense of the citizens well-being. The GOP EPA And Department Of Agriculture kept their mouth shut as Donald Trump approved the use of ‘Sulfoxaflor’ because the CEO of Dow Chemical is one of Trumps supporters! And of course without bees pollinating crops, you’re going to have a problem. Very little fruit on fruit trees, hardly any tomatoes, strawberries, virtually everything that has a blossom will be in severe trouble. The GOP is running through the forest with a can of gasoline and a box of matches, burning it all down! The only problem with that is? They’re not just lighting a fire under tree huggers and whale lovers, we all live in the same home, the Earth.

  15. Caveat Republican, Libertarian. If you don’t believe in a proper government then you shouldn’t be running for office. e.g. The belief in a proper government should be a qualification for office.

  16. Pete, mentions sports. I will briefly say at a college and professional level sports is big business, that demands subsidies to exist in it’s current form, which is disgusting to me. That said there are strict rules on how the games are played. Umpires or referees are hired to enforce the rules on the field of play. The home team does not get an advantage, concerning the rules.

    This is not how the game it is played out in everyday life, under our Corporate form of Government. The rules and regulations are designed to benefit the 1% and the corporations.

    A good example is the Flint Water Crisis. By now you might have expected someone to have received some serious jail time. However that is not case. See below:

    Nearly four years since the city of Flint declared a state of emergency over the state of its water — and three years after the first criminal charges were filed against government officials — prosecutors on Thursday dismissed all pending criminal cases, pledging to start the investigation from scratch.

    Prosecutors said that they had grave concerns about the investigative approach and legal theories embraced by the former Office of Special Counsel (OSC) that oversaw the investigation, according to a press release issued by the Michigan Department of Attorney General.

    The OSC was appointed by former Attorney General Bill Schuette.

    The OSC entered into agreements that gave private law firms that were representing the accused a role in deciding what information would be turned over to law enforcement, according to the release. Fri June 14, 2019

    This is how America works. “If you want a picture of the future, imagine a boot stamping on a human face—for ever.”
    ― George Orwell, 1984

    So at this point we do not need moderate, glacially slow incrementalism. We need Progressive Policies and Candidates that will attack this rotten system.

  17. We rightly regulate business and other activities that can cause us harm, but in fits and pieces, depending upon the political climate of the day. Right now with Trump at the helm and with the libertarian and ALEC-supported Kochs, expect less regulation (in return for bribes we choose to call “campaign contributions”) of activities that make more money for the already rich and less protection for the rest of us. Business interests and their minions such as the WSJ have done a number on the rest of us by framing attempts to regulate their businesses as “anti-business,” job destruction etc., when such attempts are rather about public health, public safety etc.

    The fact and truth of the matter is that as Silicon Valley and others give us more and more complicated matter, some with unknown consequences, we need more and more sophisticated regulation of such good, services, processes and other intellectual property, all of which is prone to monopoly (see Big Tech). Future regulation of such increasingly complicated rights to property and processes should be interesting.

  18. People need a massive humbling experience, like getting beaten half to death by someone whom they were sure was weaker than themselves.


    How else can Libertarians and Conservatives internalize the antidote to their insanity? Their idea that creating a society by which the absence of rules cleanly enables the strongest and most brutal to always win DOES NOT FAVOR THEM, but rather favors the brute who is stronger and more brutal even than them?

    How insane does an individual’s vanity meter have to register in order to support Libertarianism and Conservativism? No one is as strong and self-sufficient as they think. But what lesson is needed to teach that fact?

    I say a good honest beating. Maybe more than one.

  19. Pascal – South Carolina has just begun renewing its dilapidated school bus fleet using the state’s portion of the $35 billion fine for VW’s rigging their emissions tests. When our laws tilt a little more toward the sane side, public officials will do hard time for poisoning people through incompetence or intention (as in Flint).

    Indygaffer – It seems to me that for many corporations which pay no attention to their social responsibilities, Todd got it right. They certainly act as if the had no other responsibility except maximizing shareholder return. Although it regarded its anti-union activities as a top priority, I worked for one that mostly took its responsibility to the community seriously.

    Softball penalties for white-collar crimes seem to have been written by lawyers/legislators in anticipation of committing such crimes. That approach often proves helpful to our South Carolina legislators/swamp dwellers. While there certainly are people around (as Vernon says) who understand the need for regulations, they and their opinions don’t count in this administration where the only “good” regulation is one the president has eliminated.

    While not particularly relevant, I feel the need to mention the funniest political happening of the week. Mick Mulvaney, a former South Carolina Republican congressman, for God’s sake, felt called to go on TV and defend President Trump’s actions and tweets of the previous week as “not racist.” I can’t recall when South Carolina congressmen were looked to as authorities in that area. I think I’ll stick with Elijah Cummings and Reverend Al for that kind of expertise.

  20. Well done, as usual, Sheila. You probably recall from law school the case of the poison cough syrup that help bring about food and drug regulation. In Tennessee, there was a company that made some sort of cough syrup that was sold throughout the United States. The formulation resulted in a bad batch that had arsenic or some other poison. Several people died, but there was no inter-state law that could force the seller to recall the product, issue warnings, nor was there any regulatory mechanism in place to assure that it didn’t happen again. As I recall, this manufacturer had lots of local clout.

    Without a federal oversight process, we would be at the mercy of drug and device manufacturers who have plenty of political connections. One has to wonder about the effectiveness of FDA oversight just by watching TV commercials. In the same commercial break, I’ve seen ads for law firms soliciting for clients injured by blood thinners, and also ads for the very same blood thinners. Why is Big Pharma allowed to advertise directly to consumers in the first place? To get you to nag your doctor to prescribe something that might not be the best thing for you?

    If we don’t learn from the past, we are condemned to make the same mistakes.

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