Intended Benefits of Federal Regulations Come at a High Cost to Businesses and Consumers

The Eye on the Market: The Supreme Court vs. the Regulatory State recently released by JPMorgan “discusses recent Supreme Court rulings and the possibility that they may usher in the largest pushback on the regulatory state since the Reagan Administration,” putting into the spotlight the high a “volume of [federal] regulations with which businesses, workers, consumers and other regulated entities must comply.” In addition, according to views on administrative law by Supreme Court chief justice John Roberts, government agencies do not necessarily have special competence regarding all rules and regulations they promulgate,” thereby resulting in “ambiguous, vague or understated federal statutes.” The article recalls a letter written in 1992 by the late George McGovern, who served in high public office for 24 years, ending his tenure as a U.S. Senator in 1981. About seven years later, Mr. McGovern made his first foray into the business world upon acquiring the leasehold of the Connecticut Stratford Inn. The experience, although limited, put him in the situation of living with federal, state and local rules that although passed with the objective of helping employees, protecting the environment, etc., he learned that “the increased operating costs that accompany public regulation and government reporting with reams of red tape,” results in higher prices for consumers — “a simple concern that is nonetheless often ignored by legislators.” In his letter, Mr. McGovern concludes that in hindsight, had he had “this firsthand experience about the difficulties businesspeople face every day,” the knowledge would have made him a better U.S. Senator with the realization that “one-size-fits-all” rules for business ignore the reality of the marketplace.” Furthermore, the setting of regulatory guidelines at artificial levels — e.g., 50 employees or more, $500,000 in sales — don’t take into account other realities, such as profit margins, labor intensive vs. capital intensive businesses, and local market economics.” The questions asked and wisdom gained by George McGovern later in life appears to have fallen on blind eyes, a 2019 article by the Foundation for Economic Education (FEE) reiterating the lessons expressed by Mr. McGovern concludes that little has changed, while JPMorgan’s more recently published Eye on the Market reaffirms that the volume of newly promulgated federal regulations has yet to show signs of abating. The nation’s federal, state and local governments, as well as the constituents being represented, would greatly benefit if people seeking a political career were required to gain hands-on business experience before being eligible to run for any office.