The attack on the activities of General Motors is just the latest example of wanton government interference with free market capitalism that is stunting economic growth.
Just show me one place in the constitution where the government is given the regulatory power to dictate how businesses should operate or to protect people against the alleged dangers of corporate activity. Look all you want, but you won’t find it, because the original intent of the constitution was to limit, not expand the powers of government.
Regulations imposed by the government on businesses are clearly nothing more than an attempt to countervail the limitations on government power outlined in the constitution. The only thing that government regulations on business do is to increase the size, scope and power of government, while limiting individual freedom and stunting economic activity. Not only are the business regulatory actions of government an anathema to free market activities, they are unconstitutional; the fact is, these regulations do more harm than good.
Overstepping Constitutional Authority
Why should the government have the power to tell us we can’t smoke, eat all the “trans fats” we want, or that we have to wear seat belts and can’t text while we are driving? Even more flagrant is the government’s effort to regulate individual rights to own, carry and use guns. For Christ’s sake, it’s right there in the constitution: Citizens have the right to as many guns as we want! Besides, anyone with any experience at all knows it’s much easier to take down a buck with an AK-47 than a bow-and-arrow.
Government regulatory interference with business is even more brazen and constricting than its sometimes-draconian control on individuals. Remember, corporations are people, too, and they are entitled to be just as free from government intrusion as any individual. These regulations are clearly harmful to both the natural self-regulatory powers of the free market and the unfettered expansion of free market economic activity. What these power-grabbing government bureaucrats don’t understand is that these unwelcome and unnecessary regulations are preventing corporations from being “free” to do what they do best, which is to help the consumer, create jobs and stimulate the economy.
It has been estimated that U.S. businesses waste almost $2 trillion every year just to comply with existing government regulations. And don’t think these regulations don’t ultimately harm the consumers. All these costs are passed along to us in the form of higher prices so that corporate profits are not impacted by the costs.
Consider how much stronger the economy would be if businesses did not have to waste this $2 trillion every year to comply with government regulations. That’s $2 trillion in increased profits that companies could use to expand their business and hire new workers. Just imagine how many workers could be hired if you had $2 trillion to pay them! And you know that is exactly what the companies would do. Even if the companies just distributed the extra profits to shareholders, those shareholders would certainly re-invest that capital or buy more things like yachts, vacation homes and expensive trips; all of which would further stimulate the economy; creating more service jobs for those at the lower-end of the socioeconomic pyramid like maids, cooks and gardeners that would cause the benefits to trickle down to everyone.
God Bless the Free Market
These government mavens of regulation don’t understand the most effective regulation of the “free market” is the “free market.” That natural regulatory control of a free market is called “market forces.”
Here’s how it works: Let’s say some bank is making huge profits ripping off the consumer with abusive loan practices, high costs or excessive fees, the natural regulatory and competitive nature of “market forces” would encourage the other banks to take action in an effort to attract customers away from the abusive bank. Certainly the pure competitiveness of the free market would not have all the other banks jumping in to do the same thing, just for higher profits. And even if they did, those extra profits would just stimulate the economy.
Even worse than the economic cost, these government regulations run amuck even have the power to destroy a highly profitable, flourishing industry. The tobacco industry is a great example of this type of government abuse of power. The tobacco industry was once one of the driving forces of the American economy. It employed millions of workers; generated billions in profits and the industry’s efforts to export cigarettes and educate millions of people around the work to start smoking them, significantly enhanced America’s balance-of-trade. All of this happened because of a free market economy. In fact, the government even provided huge subsidies in an effort to develop the tobacco industry.
Then some government meddlers decided that just because tobacco caused cancer that the entire industry should be subjected to crippling regulation. Not only did this action interfere with the natural free market forces, it drastically reduced individual freedom by attempting to prevent individuals from exercising their constitutional freedom to decide if they wanted to smoke or not. Today, if it were not for the tobacco industry’s efforts to increase tobacco use in developing countries, the entire industry would be up in smoke. (I didn’t say that!)
General Motors is just the latest target of the government’s effort to interfere with the free market economy. It seems like 10 years ago or so General Motors became aware that some of the cars they were selling had a defect that could potentially cause death or the maiming of occupants. To their credit, when GM became aware of a potential defect, the company tried to identify and correct it. Sure, it took 10 years for GM to disclose and resolve the problem, but in the meantime the company was able to sell these defective cars – estimated at around 10 million – which generated millions in profits, created thousands of jobs and helped stimulate the economy.
The cost? Only 13 lives and a few hundred injuries. (That is barely more than the number of people who were on Malaysian Flight 370.) And General Motors has even graciously offered refund the price of the car and compensate the families of those who were killed and those injured.
But that is not enough for an intrusive government. No, it wants to embarrass General Motors with government hearings and even millions in fines. Don’t these self-serving politicos and bureaucrats understand that these actions interfere with the free market economy and could end up costing thousands of workers their jobs and millions in dividends to shareholders?
Of course, General Motors is not the only victim of government interference with the free market. Just last year MetLife was forced to pay $500 million to settle a multi-state investigation into unpaid claims for dead policyholders. It seems that MetLife discovered that thousands of their policyholders had died, but since surviving families had not filed a claim, the company simply kept the money. Then again just this past week MetLife was fined $60 million just for some pesky licensing violation in New York. Over the past couple of years Citicorp has been fined or entered into settlements with regulators worth almost $1 billion. Just think of how much more in shareholder profits these companies could have reported, how many jobs could have been created and how the economy would have been stimulated if the government had just minded its own business and had not interfered with the free market economy.
Here are a few things to ponder when considering the efficacy of the government regulation of a free market economy:
- If the present plethora of government regulation of the free market has failed to stem the tide of abuse and collusion on the part of corporations, why should we think that even more regulation would be better? Instead, since they don’t work and are obviously costly, wouldn’t it be better to just get rid of them?
- The constitution clearly gave every individual freedom of choice, so shouldn’t we – not the government – have the right and responsibility to decide what to do with our money, bodies and lives? If we want to risk cancer by smoking, shouldn’t that be our choice? If a bank gives us a mortgage we can’t afford, should the government take that choice away? If we want to buy a car, shouldn’t we be responsible to ask the carmaker for a list of known defects in the car?
- Just remember that corporations exist just to help us. They can exist only when they provide us goods and services we need, want and are willing to buy. They create jobs, support communities and pay taxes; all in exchange for profits that further stimulate the economy. Regulations only increase costs and get in the way of corporations doing what they do best, so shouldn’t they be free to do what they want?
And the Moral of the Story …
The constitution of the United States was structured with an eye toward offering as much freedom to the people as possible and to limiting the power of government as much as possible. Operating under this philosophy America became a bastion of individual freedom and the most dynamic free market economy the world has ever known.
One thing that some people seem to forget is that corporations are people too. As such corporations should be just as free as individuals to go about their business. Corporations just want to help their customers, create jobs and help the economy grow, but unfortunately they are being hampered by a government that thinks it knows what’s best for people and wants to increase its size and power. To accomplish this objective, the government is taking more and more freedom away from corporations to act the way they want to achieve their goal of helping people.
This increasing burden of constricting and unnecessary regulations – the free market naturally regulates itself – not only are costly, cumbersome and ineffective, they take away individual freedoms from everyone. If we want to be true to the constitution we need to get rid of all the government regulations on business so that all people are free to do what they want to do. And the people can’t be free if corporations are not free to do what they want to do, too.