When government increases oversight and regulation, how does this protect anybody? Promoters of increased regulation assert that corporations and businesses won’t be able to get by with corruption if we impose oversight on them.
The rationale, when regulation is discussed, is that since regulation will decrease corruption, a little more regulation will decrease it even more. The problem with this thinking lies herein: as long as people run things, we will have some corruption. You can add regulation upon regulation and make the economy ever the more sluggish and after all is said and done corruption will still be around.
The other side to this, that is never discussed, is that we already have protection against corruption. We call them laws. We’ve had them for a long time and they have worked. They worked against Enron. They worked against Bernie Madoff. It was the law that oversaw those situations. We didn’t need more regulation to oversee those cases and enforce those laws.
Now, it could be argued that the idea behind more regulations is to stop corruption before the damage is done. Two things, however, are likely to occur as regulation rises. 1) Corruption will still be with us. As long as people are in charge, corrupt people may be in charge. 2) The government is run by people. As long as people are in charge in government, corrupt people may be in charge in government. This includes the people in charge of regulatory entities.
This brings us to the next point. As much as markets are thought to need regulation, regulatory entities need to be regulated. This is just as much a problem as any other regulation problem. Just as corrupt people may run business, they may also run the entities that regulate those businesses. Meanwhile, there is no check and balance involved. The regulatory entities may impose checks and balances on businesses, but it doesn’t happen the other way around. All that happens then, is that power is siphoned from the market, slowing down the economy and diminishing American economic robustness. Meanwhile, that power is not simply deleted like a file on a computer. That power is drawn away from citizens who enter the market and toward government entities who would make the market a “fall guy” for their political schemes.
My last point here is stated thus. Politicians are the key here. These regulatory entities were created by politicians, and they are either maintained, grown, or scaled back by politicians. That is not a conspiracy theory, as some of our publicly educated readers might be tempted to think because in school they were taught that government is the “good guy.”