Times Sunday Dialogue: More Regulation, Or Less

by Jeff Sovern

Tomorrow's Sunday Times has a series of letters on the issue of whether society needs more regulation or less.  One letter, by Dennis Canfield of  Western Springs, Ill., opines:

The problem with the current state of government involvement in our daily lives is that the overwhelming majority of it — from employment regulations to “consumer protection” laws to the Americans With Disabilities Act — is not regulation but interference, and we are drowning in it. There are legitimate areas for government regulation; if the government would focus on these and let the rest alone, it would do a better job of regulating, and we would all be better off.

I found this letter particularly unhelpful.  I can't think of any regulation which is not interference.  Even the laws making murder a crime are interference–with the murderer's attempts to kill people–but I doubt Mr. Canfield would object to that interference. The question is what kinds of interference goes too far.  Mr. Canfield's examples include consumer protection. Does he mean all consumer protection laws?  Does Mr. Canfield believe, for example, that predatory lending laws should be abolished as interference, or that lenders should be free to deceive borrowers, or merchants employ deceptive advertising?  I can't tell.  The fact that he put the phrase in quotes suggests that perhaps he means only ersatz consumer protection laws, but he doesn't identify any such laws.  That may be a function of the brevity requirements for letters in the Times.

Mr. Canfield would have done better to explain why he objects to consumer protection laws. What is wrong with them?  Which consumer protection laws are we drowning in?  In the absence of such specificity, it's difficult to have a useful debate. 

But maybe this is just sour grapes on my part. I submitted a letter to the Times, but they didn't see fit to print it.  Here's what I said:

Free markets work well when consumers understand what they are paying.  For example, a mortgage lender that charged 100% annual interest rates would not last long.  But the subprime lending debacle showed that lenders can obscure their rates.  Consumers who thought they were getting cheap fixed-rate mortgages but actually signed mortgages with initial low "teaser" rates that later soared contributed to the foreclosures that brought the economy down. 
We need regulation to help consumers make appropriate decisions.  In other words, regulation can make markets work better.
Oh well.  I am comforted by the knowledge that I have another letter coming in tomorrow's Times. 

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