Thursday, November 17, 2011

Found one!

Took me all day, but here's an article worth posting. Nothing groundbreaking or mind-blowing, just a nice little article about the CBO predicting that deregulation will not create jobs.

It should be obvious. It should be common sense. But no. It's a debated topic, vehemently defended by Republicans, vehemently attacked by Democrats. The idea that deregulation creates jobs has become the standard play for conservatives, and they back it up with....well, other conservatives who say the same thing. Not really sure what their evidence is, especially since there's so much evidence refuting this.

The argument made by conservatives is that by decreasing regulations, you free up businesses and their money to hire more people, expand, and produce goods or services cheaper. The argument is that regulations stifle these things, which sounds good, until you notice that these companies are sitting on record amounts of cash. Not only are our regulations some of the loosest in the 1st world, but our companies are some of the wealthiest. And yet, they won't hire. Why?

The answer, as I've said before, is basic economics. A company will not invest in new workers when there is no demand for the products they will produce with them. If I own a company that makes enough of product Y to meet demand, why would I go through the costs of hiring and expanding my business, even with huge amounts of excess cash, if my increased productivity will not increase demand and purchasing of my products? It doesn't make any sense.

I'm amazed that there are people still willing to believe that cutting our regulations is the answer. Cutting regulations helps businesses externalize the costs of their work, rather than internalizing it. If we let regulations go, we will all be paying for the dirty, fraudulent practices of businesses. Regulations keep us safe, healthy, and secure. Getting rid of them is all about maximizing profits and minimizing liability, and has absolutely nothing to do with jobs.

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