Saturday, September 15, 2007

Industries Want Regulation

You know the administration has taken deregulation too far when American industries are actually seeking more regulations:

WASHINGTON, Sept. 15 — After years of favoring the hands-off doctrine of the Bush administration, some of the nation’s biggest industries are pushing for something they have long resisted: new federal regulations.

For toys and cars, antifreeze and fireworks, popcorn and produce and cigarettes and light bulbs, among other products, industry groups or major manufacturers are calling for federal health, safety and environmental mandates. Some of those industries are abandoning years of efforts to block such measures, often in alliance with the Bush administration, which pledged to ease what it views as costly, unnecessary rules.
The corporations are, of course, motivated by self-interest. As the article makes clear, they're afraid of lawsuits and cheap (and unsafe) foreign competition, and they also want to preempt heavy regulation by the Democrats by putting lesser regulation in place now. But that's not necessarily a bad thing. We'll just have to see if the Bush administration will respond to these calls for more regulations. Wait, wasn't there a controversy about spinach a while back?

Last year, almost all of the nation’s spinach crop was destroyed after contaminated spinach from one 50-acre California farm sickened nearly 200 people in 26 states, killing a Wisconsin woman. It was the last straw for large growers, who now support mandatory safety standards. But the Department of Health and Human Services has been slow to endorse them, leading some proponents to conclude that the agency has objections.

“It’s a little unique when both consumer groups and industry associations are out there saying that we need new regulations, and the government doesn’t agree,” said Jenny Scott, vice president for food safety programs of the Grocery Manufacturers Association.

It'll be interesting to show how this all shakes out. The (obvious) lesson here is that, while over-regulation is bad for the economy, slashing regulations willy-nilly can have some serious downsides as well. Not that this is some brilliant new insight, but it's one that pro-business officials tend to forget.

No comments: