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News-Sentinel.com Your Town. Your Voice.
Opening Arguments

Can't have a light touch with a heavy hand

Question asked:

The struggle to revive the IPO market is a microcosm of the larger debate: Is government regulation strangling the economic recovery?

[. . .]

The contest between regulation and deregulation rarely poses a black-and-white choice. There are competing goals and narratives. Here, the quest for greater reliability in accounting statements competes with greater freedom for entrepreneurs and their backers. It’s the fear of financial fraud against the lure of new products, technologies and jobs. Which deserves precedence now?

Question answered:

Big-government advocates will say that as society grows more complex, laws must multiply to keep up. The opposite is true. It is precisely because society is unfathomably complex that laws must be kept simple. No legislature can possibly prescribe rules for the complex network of uncountable transactions and acts of cooperation that take place every day. Not only is the knowledge that would be required to make such a regulatory regime work unavailable to the planners, it doesn’t actually exist, because people don’t know what they will want or do until they confront alternatives in the real world.

The first piece, by the Washinton Post's Robert J. Samuelson, is about the specific issue of IPOs and venture capitalists, and the the second piece, by John Stossel of the Fox Business Network, is a more general critique of government complexity, but there is a common theme: Regulations have costs, so think very carefully about every proposal for a new one. I'd like to say the remedy is to cut back on regulations till we get to a point we can describe as "a light touch," but things are probably too far gone for that.


tim zank
Fri, 03/16/2012 - 2:40pm

Not exactly rocket science, if you want to stunt or slow anything, just regulate it and tax it. Nothing ever grows after regulation EXCEPT GOVERNMENT.