4/27/10

Are regulations useful or detrimental?

The short answer is "yes". Our emotions force us to say they are useful and much needed if we want to avoid future problems.

Now, enter the bureaucrat with his/her human needs to survive and emotional way to tackle problems.

A businessman told me he asked for a permit in June 2009. In December, he was finally contacted by the regulators and asked considerably more information about the project -- an important one for is business.

All these months he could not make the money he knew he could have made because the bureaucrats needed to check that all the regulations were satisfied. People in his business could not work. His profits are lower than they could have been. And ultimately the state will collect fewer taxes from him.

My point is everything the government does is correct. But there is a limit. Beyond that limit business is penalized and the country cannot generate the employment and the wealth to support all the great social programs on the books.

Where should we stop? No one knows. We will know only when conditions are bad enough that people become unhappy and voice their concerns (as they are doing in Greece, Portugal, Spain, and here in the form of tea parties).

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest

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