Tuesday, September 21, 2010

Another chapter in the spontaneous debates saga: federal regulation

Sometimes the most effective stimulation of one's intellect happens when you least expect it. Here is another one of those examples.

An old friend of mine from high school weighed-in on an article I posted on my Facebook wall. The story enters into speculation that proposed resale regulations to be wielded by the Consumer Product Safety Commission won't be limited to larger resale outlets but also can be directed at individual and family garage sales.

I contend (along with a pair of fellow Ohio Libertarians) that this is part of the overreaching nanny state mentality of Washington, D.C. My high school friend disagrees. Below is the full exchange as it has taken place at the time of this posting. It's pretty long already so I won't be making any additions to it. Also, I'm anticipating more than likely future offerings (especially mine) are likely to contain a significant degree of redundancy in the effort to impart our respective points of view.

Note: I've left out names due to the fact I'm publishing participants' comments. The idea is not to make anyone look good or bad but present the points offered on both sides of the topic.


Fellow Libertarian A: It's just amazing; I'm in awe. How did we let it come to this?

My old friend: Really? The CPSC is too "nanny state" for you? People should have the right to buy and sell cribs that kill children?

Me: What's "nanny state" about this is the door being opened to holding individuals and families to the same standard as larger entities which have the cash reserves to absorb the costs of a fine. Scott Wolfson can claim all he wants that the new standards are limited to larger resale operations. But, invariably, every new law and its set of regulations -- regardless of the industry in question -- starts out the same way: the intent is to keep the largest operators in check without encroaching upon their smaller counterparts; but between 5 to 10 years after the new rules are in place someone in Washington decides (usually with a little nudge from lobby money supplied by the same companies that were targeted in the beginning) that ALL levels of businesses must fall into compliance.

At what point do we decide that people are no longer responsible for and have no need to exercise judgment for themselves? (Meaning, do the sensible thing and scrutinizing the product they are about to buy before they go ahead and buy it) Based on the logic of these regulations, every home in America would have to be mandated to have the CPSC's guide in the odd chance one of the occupants may decide to sell any used children's merchandise currently in their possession.

I understand most people feel the need to have rules and regulations for retail products out of the commonly held principle of an inherent public trust. But, resale by its very nature carries with it an inherent amount of risk that whatever the product may be it may well have flaws present if for no other reason than it is USED -- someone already has used it and as a result may be more well-worn than either the buyer or even the seller may be aware.

Fellow Libertarian B: First off, this is definitely not within the purview of the federal government. Any argument on that matter?

Second, should regulatory agencies at any level have the power to arbitrarily level fines and penalties without taking you to court first? Or, since it is a matter of enforcing the law, is it a criminal matter where you are cited, then the judge issues the fine?

My old friend: ‎"Wes Benedict, executive director of the Libertarian National Committee, told FOXNews.com. 'Consumer product safety is best left to a free market where suppliers can compete based on reputation and track records.'"

That's the crux of my problem with this libertarian orthodoxy: Trust the corporations, not the government.

"At what point do we decide that people are no longer responsible for and have no need to exercise judgment for themselves?"

I would say, when kids are killed. What would you answer?

At what point do we decide that people can freely sell products known to be deadly to children?

The slippery slope works both ways. FOX News can speculate all they want about jack-booted thugs breaking up granny's yard sale. But nobody has to imagine kids getting killed by magnets and cribs.

If it's not in the purview of the federal government to protect children, in a global market, then whose purview is it? Sure, parents should be responsible, but are we as a society willing to let the children of irresponsible parents get killed?

"Should regulatory agencies at any level have the power to arbitrarily level fines and penalties without taking you to court first?" Who is "you" here? If it's a corporation, then yes. And when we start giving corporations the same rights as people, we're trading away our liberty as quickly as if we let the government take it.

Me: For the sake of not going into yet another of my miserably long treatises, I'm going to try to focus on three of those premises.

When [Fellow Libertarian B] uses (or any of the rest of us, for that matter) the word "you" he/we are talking about "all of the above" -- the individual, the family, small businesses, non-profits, and larger corporate operations. All five fall under the umbrella description of private interests.

Laws such as what puts the teeth into the CPSC are not written to differentiate between those five segments of the private sector. As I mentioned above, large corporations have the financial wherewithal to endure such fines where the individual, the family, small business, and some non-profits do not.

As a result, we are left to trust the government (essentially, politicians and their cronies) to employ common sense in enacting and enforcing these laws. Today's crew may promise not to be spectacularly stupid on that front. But, without a guarantee that voters won't elect a Bush or Obama clone in '12, '16, or even '20, trusting Big Government is an even dicier proposition than trusting Big Corporation.

Next, "Granny's" yard sale isn't what concerns me. Granny most likely depends on Social Security to get by: and last I knew Social Security can't be garnished. It's yard sales by younger families I'm thinking of as they typically live paycheck-to-paycheck -- which is why they're selling their old stuff in front of their homes instead of donating them to Goodwill or Salvation Army. These are the folks who are being subjected the greatest degree of liability exposure.

Finally, in a truly free-market environment -- not this Keynesian setup in motion today -- companies that put bad products into the market lose enough customers to fail as they rightly should (in addition to being fined) due to the abundance of viable competitors of all sizes who can meet consumers' needs. That cannot happen with the way things stand right now because the enormous expense of satisfying federal regulations before any company can even begin producing a consumer good makes starting a new company or expanding an existing small one too financially prohibitive.

By its very nature, that setup favors the largest of corporations -- which are supposedly the evil doers in the first place that inspired the need for those regulations. And that is because they enjoy the aforementioned financial wherewithal to endure costs incurred by compliance with federal regulations. Most of that financial security is achieved despite those costs due to their ability to lobby for the kind of equal application of those laws that Wolfson claimed in his lip service won't be coming down the pipe.

Oh well, so much for "No New Treatises".

No comments:

Post a Comment