One of the most common remedies that is talked about these days is limiting the "size of government," which is basically code for deregulation. Regulations are how the government keeps private industry in check by limiting the practices that businesses can participate in. Things like insider trading, short selling stocks, and defrauding investors by lying about earnings are out of bounds. Regulations are meant to be common sense, and when they work, companies make plenty of money and people can shop safely and securely.
We have been hearing from many conservatives that regulations are what are choking our economy. They argue that if we deregulate the markets and the private sector, slash funding for the government, and lower corporate tax rates, that we will simply be all better. They claim that the overwhelming red tape is stifling growth and eating away at profits.
There are quite a few things wrong with this. First, deregulation is how we got into this mess. Clinton and Bush Jr. cuts regulations and gave private businesses and banks more freedom than they'd had in decades. With that freedom, they drove our economy into the ground. Second, regulations do not eliminate nearly as much from the profits of these businesses as conservatives claim. Look at how much these companies rake in, after satisfying regulations, and you get the sense that maybe their livelihoods do not completely depend on the markets being unregulated. Finally, when compared to other places, America's regulations are not so bad.
According to the World Bank, American regulations are fairly lax compared to other areas. This isn't all that surprising when you consider how regulations have largely been dismantled over the last few years, and how they are currently being attacked as well. Look at the current drive to deregulate the EPA. When legislation like that is being passed in the House, it's no wonder that our financial institutions are enjoying more freedom than some.
What interests me about all of this is that regulations are still targeted as being the reason for jobs being shipped overseas. It has nothing to do with cheap foreign labor, less concern for human rights violations, and more profitable business because of it. No, conservatives say it's regulations.
The problem, really, is that America is about fifty years behind the rest of the world. We were on top, and so we stopped trying to be cutting edge, except in our military. There was a time when our economy and technology were decades ahead of our competition, but that technology hasn't changed much since. We're stuck squabbling about energy efficiency and alternative energy when most other parts of the civilized world has pretty much adopted green technology into its society. We're debating the quality of government-run medicine versus for-profit care while other nations have more cost-effective and higher quality care via "socialized" medicine. We have leaders talking about deregulating the markets while we are in a financial collapse caused by deregulation. We are hopelessly out of touch with the world, and until we get caught up we're going to continue to struggle.
I don't know how to get us moving again, but I don't think it's by cutting the safeguards that keep our economy afloat. Pushing money into the hands of the wealthy will not guarantee prosperity, merely a greater dispartity between the rich and poor. Deregulation is what drove us into the ground, and its what some of our lawmakers want to do to prop us back up again. This is not the answer.