"Good intentions will always be pleaded for every assumption of authority ... the Constitution was made to guard against the dangers of good intentions. There are men in all ages who mean to govern well, but they mean to govern. They promise to be good masters, but they mean to be masters." - Noah Webster

"There is no worse tyranny than forcing a man to pay for what he does not want just because you think it would be good for him."
-- Robert A. Heinlein

Friday, January 14, 2011

Must Be On Drugs . . .

. . .  to believe that we need more bureaucracy.

Over at Bayou Renaissance Man, there is another new post about the shenanigans of the incestuous relationship between government and the pharmaceutical companies.  Oh, it isn't labeled as such, and I'm quite sure that the average person reading the story will come away with the idea that, "Big Pharma bad, Big Government punishing  Big Pharma good, let's go eat at McDonald's."

I know that what I'm about to say is just so foreign to most people because we've lived for several generations now with the idea that government is supposed to be like a parent to us, but just in case someone wanders by here and might be open to some radically OLD ideas that go back thousands of years, mainly because they worked and made sense, read on.

If you ask the average person if they think there should be a Food and Drug Administration, I'm sure they would naturally answer, "Of course."  If you asked them why, you might get some vague answer about protecting the public.  Now this may seem really strange to switch gears on you so drastically now, but do you think that the purpose of law enforcement agencies are to protect the public?  If you answered yes, you'd be wrong. The Supreme Court has ruled more than once that it is not even the purpose of law enforcement agencies to be preemptive.  They make very logical arguments for why that is so. People have tried to sue various law enforcement agencies for failing to protect them from criminals, and it was explained to them that that's not how government works.  Now I ask you, what in the world makes anyone think that other bureaucracies can be held accountable for protecting us from anything else?

Americans, and most citizens of modern countries operate under the silly notion that we need the vast bureaucracies to "protect" us from the big impersonal corporations, keeping them from foisting products on us that might kill or injure us. Before you go thinking that I'm some big lover of corporations, you need to read my previous post on this matter.  Do I think that all big corporations are out to kill and injure people in order to make a profit?  No.  Why not? Because it would be stupid.  Especially in a truly free market, companies are extremely sensitive to competitive pressure and guarding their market share.  I remember in 1982, someone had taken bottles of Tylenol and put poison in them, it created a crisis for the company. Even though it wasn't their fault, their sales plummeted.  Could the FDA have done anything about that?  No.  It was just in 2009 that we had an even worse event with people dying of salmonella poisoning, not because of tampering at the retail end of the supply, but because of contamination at the source of production.  You would have thought that the FDA was supposed to be on top of things, but no.  The evidence available to the public seemed to show a picture of corporate officers who had a callous disregard for consumer safety.

Should those responsible at the company be punished accordingly?  Only an idiot would disagree.  But why no outrage when the reaction at the FDA is to request even more money to hire more bureaucrats?  Are you kidding me?  You see, it turns out that the FDA had at least some idea that something was going on at the plant that was producing bad product going back to 2007, according to this article in the NY Times.  Once enough cases of salmonella had been reported and enough people died, we find out that everybody that worked in the plant knew how shoddy and unsanitary the conditions were.  Are you telling me that just a brief walk-through by some FDA or USDA inspector wouldn't have raised some red flags?  Why aren't we asking why some bureaucrats at the FDA aren't getting perp-walked to a jail cell over this?

But that's not really what I want.  I just want all the useless, black-hole-for-tax-dollars agencies abolished and the power-hungry, do-nothing, paper-pushing weasels bureaucrats to have to get real jobs in the productive areas of society.

UPDATE:  Over at Samizdata, there was a recent post about regulation on the airlines and how it was more about limiting competition, but of course the safety issue came up.  Even a man I once admired for his often staunch defenses of liberty took me by surprise by his defense of regulation, proving that even the best of us don't often think things through well enough.  Better minds on this topic prevailed on the comment thread and it is so useful to my points here that I lifted some of it for you to see below.

The moderate view:

The uncomfortable reality of the market is that someone can ALWAYS find a cheaper way to offer a product, but the other uncomfortable reality is that this discount has to come at the expense of one of the legs of the Iron Triangle (cost, quality, time). Once the efficiency curve has flattened, as it must, one of the three is ALWAYS compromised for the sake of market share.
I'm not a huge fan of government regulation: quite often, the regulations are gamed by the major players to their own advantage.
But I'm absolutely in favor of SOME government regulation. If the No-Regulation Fairy waved her magic wand tomorrow and made all government regulations disappear, planes would be falling out of the skies like hailstones within a matter of months, once the finance departments started running their little actuarial scenarios which triangulate the risk/reward/cost/benefit factors.
The only people who would benefit greatly would be the tort lawyers, and who wants to give THEM more money/influence?
As with all things, the trick is determining where on the "Over-Regulation/No Regulation" line one has to set the optimum, because neither extreme is desirable. Letting "the market" set the optimum is not desirable, because, as noted above, there are always people (and I mean passengers) who are prepared to risk their own safety for the sake of accessibility, cost or circumstance. And as long as there are those people, 'the market" will find a way to accommodate them.
 The intelligent, freedom view:

It's not a new argument; it's trotted out all the time by authoritarians and their apologists. And despite its presentation here as an undeniable truth, it's palpably false. As has already been noted by others in this thread, private certification bodies would most certainly take over the job, as they did in the days before the professional busybodies started their radical expansion of government and its regulatory powers.
What is also invariably overlooked by fans of government regulation is that regulatory agencies are invariably captured by the industry they purport to monitor. The same is not true of private certification bodies, who have a vested (read: financial) interest in doing a good job. Government bureaucrats have no such direct, personal interest in the quality of their work; their incentives lie completely elsewhere.
Kim du Toit is just wrong, on several levels. First of all, in the absence of government regulation planes would most certainly not be "falling out of the skies like hailstones within a matter of months." It's just not good business, as even the much-vilified finance departments would recognize. Second, even assuming that were true, and accepting his dictum that "there are always people (and I mean passengers) who are prepared to risk their own safety for the sake of accessibility, cost or circumstance," by what right does he (or anyone else) deny them that choice? Whose business is it if I want to assume greater risk in exchange for a lower price or more convenience?
In the end, government handles regulation just as it does everything else it attempts: poorly, inefficiently, and at high cost (both direct and indirect). If this quote is representative of the book it's a poor inducement for me to read it. I expect that I'll pass.
Another person in that same comment thread brought up something I wish I had thought of earlier.  His whole comment was: "Two words: Underwriters' Laboratories."    Bingo.

Now that I think of it, I can't remember the last time I saw a UL logo on a product. But apparently they are still in business.  Government still can't do the job they do.  Underwriters' Laboratories was started by insurance companies because they wanted a non biased way to estimate whether or not it was worth it to them to insure various products.  So, some enterprising engineers and such saw a need and filled it.  They set up facilities to throughly test everything from kitchen gadgets to hand tools to make sure that they had no inherent defects to make them unsafe for the purpose they were designed for.  The folks at UL knew that they needed to take their testing seriously because if they didn't, in a free market, some other company could rise up and take the business away from them.  And if they were negligent enough, they could be sued.  Neither of those two things apply to government agencies.

You see, as we've allowed the liberals/progressive/leftist/statist types to gradually wean us off of the concepts of caveat emptor and personal responsibility and into the idea that government is there to coddle us and oversee every aspect of our lives, from how much water goes through our toilet, to the idea that we shouldn't need to be armed against criminals, we've become like little children.  "Why, I shouldn't have to think about eating a balanced diet of healthy and nutritious food.  Why should I read labels and think about what kinds of ingredients or chemicals are being processed into my food?  If the government thinks it's okay, it must be fine."

Meanwhile, pharmaceutical companies look for every possible avenue to do what any and all companies in business do, from the mom & pop hardware store or restaurant to Microsoft: increase profits. Nothing at all wrong with that per se. However, big corporations have the money and resources to lobby legislators to get regulation that favors them whenever possible.  Worse than that, when companies get big enough, certain things become normal in the cost of doing business.  Like retaining enormous staffs of lawyers to fight off lawsuits that may or may not have any merit and reserving enormous amounts of cash for paying fines when it makes more sense to risk breaking the rules and get caught, instead of doing what's best for the consumer.

The public takes the ignorant attitude that the government will act like a conscientious watch-dog on their behalf.  What if that's not in the best interest of the bureaucracy?  What if the powers in control of the bureaucracy stop and think:  "It's not such a bad thing to have billions of dollars rolling in from fines and penalties from these companies."    Think about it.  Even if the bureaucracy doesn't directly receive the money from penalties, they can still go to the legislators and justify ever increasing budgets by pointing to revenue that they helped bring in. The salmonella in peanut products fiasco proved that the FDA is willing to let a lot of stuff slide until some people die, and then take advantage of that fact to ask for even more money.

Every single government bureaucracy, whether it's city, county, state, or federal, lives by two over-arching rules:  1. Protect the bureaucracy.  2. Grow the bureaucracy.  All other considerations are subservient to those two rules.  That's why, at the end of the fiscal year, heads of agencies scramble to spend every last cent in their accounts whether they need to or not, so they can claim that they didn't have enough money to do all the things that needed to be done. Never mind that they spent the money on new desks, chairs, carpeting, re-decorating, and all kinds of things that really didn't have to be replaced.

Ultimately, what thinking people in a free society need to understand is that we don't need 90% of the bureaucracies that exist now.  Does it make you feel good to know that the person that cuts or styles your hair has a license?  Why?  Are you not capable of discerning whether or not someone has a track record of doing good work?  If somebody does botch the job, do you pay them and then recommend them to your friends and acquaintances?

Why do you need a local "Health Department" to inspect restaurants?  Seriously.  I've walked into several eating establishments and after about five minutes had enough visual information to decide it wasn't worth the risk, in spite of the licenses and inspection certificates on the wall.  I've seen places where I wondered if a broom or mop had touched the floor in days, let alone since the last shift. Restaurants go out of business all the time because customers vote with their dollars and their feet; not because some bureaucrat was doing his job.  And when some major outbreak of food borne illness happens, it's the CDC that is playing detective agency to figure out where it came from, not the FDA or the USDA.  Leaving the intelligent person to ask: "What the hell good are you?"

Why even license doctors?  There are lots of great doctors, and I've talked to a lot of them in various specialties.  It usually takes me about five minutes of talking to them to figure out whether or not I'd put my life or my health care in their hands.  And while I think that there are many cases of ambulance chasing low-life lawyers like John Edwards bringing worse than frivolous lawsuits, I also know of plenty of cases of unconscionable malpractice.  Did licensing ever prevent a case of malpractice?  If you are a lousy doctor who didn't get weeded out during medical school or during internship, why would licensing matter?

When I was a licensed mortgage broker in the State of Florida in the late 1980s, I learned the dirty little secret about licensing.  A big part of the licensing test for becoming a broker involved a set of complicated math equations that made the quadratic equation look simple by comparison. I had been working as a loan processor and doing truth-in-lending statements and all kinds of calculations for mortgage files, and none of the math required for that was even vaguely similar.  I asked the VP of the company I was working for why we need to learn all of these equations for this test when none of it was ever used in finances or the mortgage industry.  He laughed.  Then he told me how, when the existing big dogs in the mortgage industry figured out that licensing would be great way to cull a lot of the competition, they went to a math professor in the State University system and asked him to come up with these convoluted formulas to make it very hard for anyone to pass the licensing test.

Two things came to light in my research over that.  Existing industries always lobbied the politicians to introduce licensing under the guise of protecting the public while they themselves would be "grandfathered" in, only needing to pay the fee.  Secondly, I discovered that the lawyers who made up the Florida legislature always put a paragraph in at the end of a law that exempted lawyers from the requirements and regulations of the bill itself.  The more I investigated the more I uncovered that this was true in almost every industry.  Then I realized that it didn't matter how much training or expertise I had in any field; if I wanted to open any kind of business and be immune from the licensing requirements, all I had to do was go to law school and pass the Florida bar.  How many other States are that way?

Licensing does nothing to protect the public from negligence or incompetence, and it certainly does nothing to protect against fraud.  There is no magic fairy dust that gets sprinkled on someone when they pay the government for a license. They can rip you off just as easily as another guy. I know first hand.  I've had it happen to me, and I was there during the 1987 housing bubble bust.  We in the mortgage business then knew that it was due to changes in the Freddie Mac and Fannie Mae underwriting rules.  It made it too easy to create borderline fraudulent loans or loans that would be too susceptible to default.

 But there is another way that licensed professionals can subtly take extra money from you.  Most of the people in a specialized, licensed profession have a vested interest in forming clubs, societies, associations, call it what you will.  Then they all informally talk amongst each other to come to a loose consensus of what the going rates for products and services ought to be.  One guy might be dedicated to performing his service with the highest of standards, while somebody else in that trade association does "the same basic thing," but cuts a lot of corners or uses cheaper, substandard materials.  If you as the consumer don't know the difference, you can pay a lot more for less, just because you relied on licensing and maybe some kind of trade membership, rather than doing your homework for referrals and such.

The advent of consumer clubs have arisen out of the need for something better, thereby proving the point that government licensing does nothing more than raise revenue for the government and help the businesses limit their own competition.

Quit buying into the idea that government is there to protect you.  Government helps create and perpetuate the problems and the ultimate victimization of the people.  First, don't be intellectually lazy.  It's not that hard be careful about spending your money.  The reason medical care is so outrageously expensive is a confluence of two things. The gradual indoctrination of society to believe that medical insurance or somebody else paying for your medical care is some kind of right, and the fraud that results from disrupting the free market system, and the interference of government making laws to fix problems that wouldn't exist if it was a free market.

That's an entire blog post by itself.  But I can state briefly that if government didn't regulate insurance companies, which they have no Constitutional right to do anyway, everybody would buy  insurance on the basis of need and affordability.  It would be treated like car insurance.  You would take a keen interest in how much value you were getting for your dollar and you wouldn't let a doctor run tests you don't need.  More people would have to think twice about how much and what they ate and whether or not that smoking habit was really worth it if the insurance companies could base their rates on your lifestyle choices.  You can live your life any way you want, but I shouldn't have to subsidize your risky behavior by paying higher premiums out of some sense of "fairness" or "wealth redistribution."

Just eliminate half of the cabinet positions in the Federal government and in thirty days you would see an economic boom that would shake the world, and we would be so much better off.

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