November 11, 2008
We favor the strongest business regulation
By Jim Babka

Quote of the Day: "Democracy must be something more than two wolves and a sheep voting on what to have for dinner."
-- James Bovard, Source: Lost Rights. The Destruction of American Liberty (St. Martin's Press: New York, 1994), p. 333

Subject: We favor the strongest possible form of business regulation

Free market advocates must speak in favor of business regulation. This may sound strange, but that's only because the politicians have conditioned us to think about things in the wrong way.

The politicians are busy blaming DE-regulation for the current financial crisis. This is partly self-serving, but it's also due to a defect in the way politicians think.

The politicians think government regulations are the ONLY regulations that exist. Therefore, in their mind, to repeal a government regulation is to DE-regulate.

They are very wrong.

Often, the repeal of a government regulation will result in the restoration of free market regulations that are far stronger.

Free market regulation comes in several forms. One involves customers taking their business elsewhere when a company fails to provide a good product at a good price. Businesses are regulated by their customers.

Please notice that the government operates under different rules . . .

If the government charges you too much to do too little, then too bad. The government continues to extract money from you, even when it performs poorly.

* You can't fire the government!
* You can't take your business elsewhere.

In this sense government is almost completely DE-regulated.

But the free market also regulates businesses in other ways. Indeed, the free market imposes the strongest possible form of regulation . . . bankruptcy.

We must recognize that the politicians are in the process of repealing bankruptcy. Companies are being rescued from bankruptcy by the Big Bailout. 

This is the correct way to think about things . . .

* The current economic downturn is a free market attempt to regulate bad business practices (many of which were fostered by government banking and housing policies)
* Bankruptcy equals the strongest possible form of regulation.
* Bailout equals the strongest possible form of DE-regulation.
* The Big Bailout equals Big DE-regulation.

Now, the Big DE-regulation of the Big Bailout is becoming truly cancerous. This cancer is spreading from the financial sector to the automotive industry . . .

* Customers are attempting to regulate the activities of GM, Chrysler, and Ford, by refusing to buy their products
* Other auto companies that build and sell cars in the United States aren't having the same kinds of problems
* Customers are telling GM, Chrysler, and Ford that they need to be more like Toyota and Nissan
* By extending the Big Bailout to GM, Chrysler, and Ford the politicians are attempting to repeal the free market regulations imposed on these companies by their customers

This should not happen. GM, Chrysler, and Ford must either re-organize, in order to serve their customers (and shareholders) better, or liquidate so that their productive assets can be better used by other firms to better meet consumer desires.

We must advocate strong business regulations by opposing the extension of the Big DE-regulation of the Big Bailout to GM, Chrysler, and Ford.

Please use our Educate the Powerful System to tell your Congressional representatives to take action to stop the extension of the Big Bailout to GM, Chrysler, and Ford. You can use our "No Bailouts!" campaign for this purpose.

Use your personal comments to tell Congress that you prefer the free market regulation of bankruptcy to the Big DE-regulation of the Big Bailout.

Remember, stay tuned to these Dispatches. On Friday we plan to announce an exciting new project that will increase the speed at which the Downsize DC Army grows.

Thank you for being a part of the growing Downsize DC Army.

Perry Willis
Communications Director, Inc.

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