Tuesday, June 14, 2011

If You Are the Banking Industry and You Do Not Want the Government Micro-Regulating Your Industry .

 Then Don’t Mismanage So Badly You Need Hundreds of Billions in Bailout Funding.

Recently the Senate failed to end federal regulation of credit card fees that are charged to merchants to process transactions. Now The Dismal Political Economist does have some sympathy for the position of large banks in this case.  Regulating transaction fees to merchants does seem like something that is so micro that the government really does not need to be involved in it.  Also, The Dismal Political Economist believes that technology will soon render the excess profits of credit card companies and bank obsolete as new technology for processing credit card transactions are implemented.

However, when you look at the impetus of regulation in the U.S. one notices that we are an anti-regulatory country and that regulation takes place only after such egregious behavior on the part of someone, usually business, that the public insists that the government do something.  So,

If you don’t want government regulating and prohibiting child labor, don’t employ ten year olds in your factory.

If you don’t want government empowering labor unions, don’t hire thugs to beat up labor union organizers.

If you don’t want government involved in how you treat customers and employees, don’t discriminate on the basis of race, gender (well really on anything) in the operations of your business.

If you don’t want government issuing massive anti-pollution regulations, don’t foul the air, water and ground with your waste.

If you don’t want government inspecting your workplace for safety problems, don’t have your employees exposed to dangerous work environments.

Well, you get the picture even if many businesses do not.  Which means that we will have to have this same conversation again.

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