Regulations March 10, 2011

Mark Lacter, in Los Angeles magazine not generally regarded as a right wing magazine, describes the regulatory problems in the City of Los Angeles with regard to establishing any kind of a new business.  It does not fall much short of what Mario Vargas Llosa described in Peru in his classic The Other Path .  The blessing of the USA is that the bureaucrats do not, mostly, take bribes.  Apparently they love power more than money.  This is very much a lesser evil, and I hope the Latino immigrants flocking here understand the importance of this.  But it is not a good thing.  I may have broken with certain conservatives on some tax issues, but regulation is another matter.  It works like a fly swatter.  The effect of a fly swatter on my behind is a little sting.  The effect of a fly swatter on the behind of a fly is that the fly dies.  Similarly, big and established business can shrug off costly regulation.  The small entrepreneurs, who we claim to love in this country, face its full burden.

And I, as a Swede, can think of an even worse scenario.  Most of the public distrust about government, especially in the younger generations, has been directed against elected officials.  The officials described in this article are mostly unelected.  And because they do not take bribes or political contributions, they are more trusted and unquestioned by the public at large – at least the public that isn’t trying to start a small business – than the elected officials.  This may be changing as public sentiment begins to turn against the public sector unions and their irresponsibly large pensions and privileges.  I would plead with the younger generations; if you distrust elected officials, you’re responsible, because you either voted for them or stayed home.  But give a thought to the unelected officials; it is they who really run your lives!

PS: it’s time for another shameless plug for the Institute for Justice,, the nearest thing we have in America to a Small Business Civil Liberties Union.

Related: “The Tale of the Tape” by Mark Lacter at

kmasugi 03/11/2011

Howard, that’s Hernando de Soto–but you’re right on about regulation.  I just began teaching this Cass Sunstein book, After the Rights Revolution:  Reconceiving the Regulatory State (1990).  It is a manifesto (quite legalistic and sophisticated in economics) that seeks to defend the administrative state on all levels against the effective threat of Reaganism.  Sunstein has a significant position in the Obama Administration.

kmasugi 03/11/2011

This Sunstein book, I should have added, is as revealing to what this Administration is about as Obama’s autobiography–both are essential reading for conservatives to discern the pattern of what they are doing to this country.

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