Wednesday, February 13, 2008

Will DEMs usher in tyranny by regulation?

Arnold Kling thinks so:


Once health insurance becomes a regulated utility, the next step will be to go after pharmaceutical companies and hospitals. We can expect major government initiatives to control drug pricing and research and to require hospitals to limit treatments.

Businesses that affect the consumption of energy will also be managed by regulators. We can expect utility deregulation to be halted and reversed. Alternative fuel mandates and emission controls will be gleefully enacted.

New homes, automobiles, and appliances will have to meet design standards set by government. Specific technologies, such as compact fluorescent bulbs, will be required.

These regulations will tend to raise prices to consumers. Politicians will want to avoid blame for this, so they will look for ways to force companies to subsidize low- and middle-income consumers. Thus, during the next administration's second term we can expect to see price control mechanisms enacted for many energy-related products and services.

Another objective of the left is to reduce income inequality. Again, a regulatory approach can be expected. Executive compensation is likely to be subject to new laws, perhaps even to a regulatory board.

At the other end of the spectrum, we can expect to see a raft of new requirements placed on businesses requiring them to offer employees subsidized day care, longer vacations, higher minimum wages, and so forth. This will lead to significant increases in unemployment, with poverty and inequality rising rather than falling. This will in turn lead to further regulation and stronger attempts by government to control compensation in the private sector.

Many Americans will welcome the regulatory state. Many others will accommodate it. Only a minority of us will oppose it. Somewhere down the road, as people see the indignity of the many intrusions and the adversity of the consequences, I hope that there will be a backlash. Otherwise, if the era of mandates emerges as I fear it will, then the engine of capitalism in America may run out of the fuel of competition.