Rick Akin: Government creates problems

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“If you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand.”

— Milton Friedman

I have represented businesses for more than 25 years, and I can tell you that in my experience when the government sets out to regulate a new area or revamp existing regulation, the appropriate question is not, “Will they mess it up?” but, “How will they mess it up?” As Ronald Reagan put it, “Government is not a solution to our problem, government is the problem.”

This is the second point at which I think the liberals make a fundamental mistake. The far-reaching and comprehensive regulation with which they want to address almost every problem causes more problems than it solves.

First, the government simply is not competent to regulate most areas. The people involved simply do not possess sufficient knowledge of many industries to know what sort of regulation is prudent. For example, despite all the political chest-beating about the BP blowout in the Gulf, have you heard any engineering analysis from the government concerning either how to fix the existing problem or prevent similar problems? Also, with respect to the market collapse of 2008, have you heard any sensible explanation from anyone in the government about what a derivative is or why they are used? I certainly have not. What I have heard is a lot of grandstanding from folks with absolutely no background or knowledge in the field. This is the norm, not an exception.

This kind of shallow understanding also leads the government to affirmatively create problems. Take the collapse of the mortgage market as an example. At the urging of Congress, Fannie Mae and Freddie Mac had been overleveraged for quite some time and were going to extremes to encourage unsound lending practices. The Wall Street Journal editorial page had been trumpeting warnings about the impending disaster for years for anyone who would listen. Congress did not listen. Easy mortgage financing just is a little too popular to rein in those quasi-governmental agencies that the taxpayers ended up bailing out.

This shallow understanding leads to a corollary problem in that the government’s comprehensive regulation is likely to stifle innovation. Before the light bulb was invented, the idea of sending electricity through a filament and making the filament so hot that it produced light probably sounded pretty dangerous. Thankfully, there were no regulations blocking the way.

And then there is what Ayn Rand refers to as “The Aristocracy of Pull.” There is a reason why there are so many lobbyists in Washington (and Denver for that matter). The more regulation there is, the more ability to gain advantage in the market. This is why many big players don’t really have a problem with extensive regulation. It weeds out competitors, particularly small ones. This limits competition and innovation. That might be fine if you are established in the market, but it comes at the expense of the rest of us.

Is this to say that all regulation is a bad idea? Certainly not. Regulation laying out broad parameters and prohibiting activities creating known, serious danger are appropriate. The real answer here, though, is that the flip side of freedom is responsibility. If you engage in an imprudent or dishonest activity and people are injured, you are responsible for the damage. The legal system of the United States, and the predecessor system of Great Britain, has been doing this job for centuries.

As Thomas Jefferson observed, “Men by their constitutions are naturally divided into two parties:

  1. Those who fear and distrust the people, and wish to draw all powers from them into the hands of the higher classes.

  2. Those who identify themselves with the people, have confidence in them, cherish and consider them as the most honest and safe depositary of the public interests.”

It’s as true today as it was more than 200 years ago.

Rick Akin is an attorney practicing in Steamboat Springs, Denver and Austin, Texas, a former member of the Steamboat Pilot & Today Editorial Board, and vice chairman of The Steamboat Institute. He holds a Bachelor of Arts in Letters from the University of Oklahoma and a doctorate from the University of Texas.

Comments

beentheredonethat 3 years, 8 months ago

Rick, you would make a great president. Please consider running for the highest office in the land.

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freerider 3 years, 8 months ago

Just more verbal vomit from a Re-puke-lican that has zero ideas to fix anything....anybody that cheerleads for either party these days only serves a crime family ....with the Federal Reserve as acting mob boss

Ron Paul 2012 end the FED end the IRS end the wars end the insanity

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seeuski 3 years, 8 months ago

Am I mistaken or is Ron Paul not a registered Republican? I also do believe that Ron Paul and Rick Akin would agree on most things so it becomes very clear that some ideological emotions are fogging some of the forum members minds in this debate. Bob McConnell also is for ending the Fed. Go Bob Go. Can't wait for November 2nd.

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sledneck 3 years, 8 months ago

Well said Mr. Akin

See, Yes but... In freeriders defense, R. Paul is one of the few republicans that want to get rid of the FED. He is a Libertarian that chose the lesser of 2 evils and the party would do better as a whole if it leaned in his direction.

Too many republicans have fingers as dirty as leftists for me to defend them anymore.

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mmjPatient22 3 years, 8 months ago

Let's take "government creates problems" from a slightly different perspective:

Today, wikileaks released a flood of documents(over 92,000 to be more specific) that chronicle, in detail, the Afghanistan war for 6 years(Jan '04-Dec'09) from soldiers' perspectives. Even though wikileaks went through and did a thorough redaction of names and volatile mission details that could still endanger someone, we're still talking about mission reports and intimate details of those missions. Needless to say, there are a great number of things in the documents that are not for children. There are numerous accounts of circumstances that can be summed up by that old saying "shoot first, ask later." For those of you that fully trust and rely upon your government for a sense of security and protection, I would not recommend reading any of the documents, which are already being dubbed the "War Logs." However, if you've ever had the sneaking suspicion that your government profusely lies to it's citizenry to keep them under control, then maybe you should look into a couple of the stories that are coming out of these documents. Overall, personally, I'm pretty horrified.

http://www.nytimes.com/interactive/world/war-logs.html

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seeuski 3 years, 8 months ago

I am pro Israel so I could never get behind Ron Paul. Besides, for those that are worried about Roe v Wade he would move to strike that law as he has said. It is not my clarion call but some people attack Sarah Palin on that issue for no reason and then support for a man who has vowed to repeal it. Crazy times.

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seeuski 3 years, 8 months ago

mmj, It has been obvious to many of us for years that the Pakis were no good. Reports of the Paki intel being infested with Al Quaida supporters is nothing new.

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mmjPatient22 3 years, 8 months ago

see-

Obviously, you didn't "see" all that many of the over 92,000 documents about the Afghanistan war. All you did was look at one headline and decide to give me some grief. So do me and yourself a favor and go ACTUALLY read some of the mission reports. It's not all about the "Pakis," as you so eloquently put it. A lot of the information leaves the blood on American hands.

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mmjPatient22 3 years, 8 months ago

For the "straight from the horse's mouth" version of the released documents:

http://wardiary.wikileaks.org/index.html

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seeuski 3 years, 8 months ago

@mmj, I gave you no grief, I was just stating that I had heard of these things along the way. I have spent some time reading the reports, I hate war but the blood is on the Talibans hands and the terrorists hands along with the crooked Paki ISI. This is not a war against a uniformed military and it therefore poses added difficulties and no matter which war is dissected these types of civilian losses occur.

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seeuski 3 years, 8 months ago

Especially when the terrorists purposely use civilians as human shields, a common practice among jihadists.

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NamVet 3 years, 8 months ago

What I find interesting is that it seems just about every time we de-regulate an industry we have a disaster on our hands. The Government de-regulated the airlines and it has been a mess ever since. We de-regulated the S & L's and we had to bailout that industry to the tune of $500 billion. We de-regulated the Investment Banks and we had to bailout the big banks which cost the taxpayer $787 billion and caused the greatest recession of all times. We did not enforce the regulations for deep water drilling and we now have the greatest oil disaster of all times in the Gulf. To say that all regulations are bad is just ridiculous. We need reasonable regulations otherwise history will repeat itself because business cannot be trusted to always do the right thing when there is money to be made. Greed will always out weigh reason. The last decade has proved that.

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