Paul Krugman, the house economist to the Liberal Establishment, argues that we need government regulation to protect us from evil, greedy businesses. Maybe the Establishment should rethink how much they’re paying him, because his arguments aren’t very good.
He starts, inauspiciously, with a straw-man fallacy.
There are, it turns out, people in the corporate world who will do whatever it takes, including fraud that kills people, in order to make a buck. And we need effective regulation to police that kind of bad behavior, not least so that ethical businesspeople aren’t at a disadvantage when competing with less scrupulous types. But we knew that, right?
Well, we used to know it, thanks to the muckrakers and reformers of the Progressive Era. But Ronald Reagan insisted that government is always the problem, never the solution, and this has become dogma on the right.
As a result, an important part of America’s political class has declared war on even the most obviously necessary regulations. Too many important players now argue, in effect, that business can do no wrong and that government has no role to play in limiting misbehavior.
We notice that Krugman didn’t name any prominent libertarians or conservatives who advocate letting business get away with “fraud that kills people.” Nor did Krugman name anybody who believes that “business can do no wrong” or that “government has no role to play in limiting misbehavior.” That’s because they don’t exist.
We live in a strange world, surprising in many ways. For instance, one would never suspect that a Nobel Laureate in Economics could be stupid enough or unscrupulous enough to traffick in pathetic straw-man arguments. But there it is.
The fact is that one can support legislation, duly passed and enforced by elected officials, covering fraud and product liability, without supporting the abomination of our overweening regulatory state consisting of tens of thousands of pages of regulations. Laws against fraud are one thing. But thousands of new regulations written every year by unelected and unaccountable bureaucrats as part of a semi-opaque, special-interest conspiracy against the public are quite another thing.
Krugman later reveals what he means by “obviously necessary regulations” that “the right” wants to get rid of.
Carbon regulation must go, of course, because doing nothing about climate change has become an essential part of the Republican identity. So must Obamacare.
Ah, carbon regulation and Obamacare, two solutions in search of a problem. But these policies are attractive to statists like Krugman because they promise to expand the power and scope of government. Carbon regulation and Obamacare aren’t “obviously necessary” to any objective except giving the political class more power over the people.
Next, Krugman wants the government to take some sort of action against the for-profit education industry.
Then there’s for-profit education, an industry wracked by fraud — because it’s very hard for students to assess what they’re getting — that leaves all too many young Americans with heavy debt burdens and no real prospect of better jobs.
But surely Krugman knows that the for-profit education industry that he deplores exists almost entirely due to the availability of subsidized student loans made available by government. It’s almost as if Ronald Reagan was right when he said that government is the problem.
Furthermore, why single out for-profit education? The non-profit education industry where Krugman is employed also “leaves all too many young Americans with heavy debt burdens and no real prospect of better jobs,” and does so on a far grander scale.
Krugman also likes the thousands of pages known as Dodd-Frank banking laws.
Last but not least, Mr. Bush calls for a rollback of financial regulation, repeating the thoroughly debunked claim that the Dodd-Frank law actually encourages banks to become too big to fail. (Markets disagree: Judging by their borrowing costs, big banks have lost, not gained, since Dodd-Frank went into effect.) Because why should we think that letting banks run wild poses any risks?
So if you oppose Dodd-Frank, it means you’re in favor of “letting banks run wild.” Straw-man much?
Maybe Krugman’s pabulum-puking readership at the New York Times is sufficiently ingenuous to believe that Dodd-Frank was intended to rein in the big banks. But those of us with a modicum of worldly knowledge remember that it was the big banks themselves who wrote the bill. When U.S. Treasury bureaucrats sent an early draft of the bill over to Congress, they forgot to delete from the document the watermark of the law firm used by the big banks.
Is this the best that Krugman can come up with? Maybe he needs a break, because at this point he’s just mailing it in.