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What Good Are Regulations?
by
Jacob G. Hornberger,
January 2002
Have you ever noticed how advocates of the regulated society never admit
that their regulations have failed? Consider the Enron case, in which one of
the biggest companies in the United States has gone belly up as a result of
questionable financial practices. I thought the purpose of government
regulation was to eliminate that sort of thing. It obviously doesn't, and so
what good are the regulations? The answer of the regulators is always the
same: that this only proves that we don't have *sufficient* regulations -- if we
had more regulations (and more money for the SEC and other regulatory
agencies), then this sort of thing wouldn't happen "as much." What they fail
to consider is the deceptive aura of security that the regulated society
engenders in people. In the absence of regulations, bad things would still
happen in the marketplace, but at least people would be more alert to the
possibility that things can go wrong and would not be
lulled into a false sense of security by the paternalistic welfare
state.
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