In 1980, Ronald Reagan declared that the government is the enemy of business and our citizens. And led by the Great Communicator, Republicans set about down-sizing government by eliminating red tape and regulations; an effort that continues to this day. Its a tantalizing argument. After all, who wants their taxes to go toward unnecessary bureaucracy?
Unfortunately, that argument neglects one very important fact: For a government or, for that matter, any organization to operate efficiently, it must have some way to enforce its rules. Without enforcement, the criminals, the unscrupulous and the greedy will prosper at the expense of the law-abiding. By gutting Government regulation, Republicans have encouraged runaway greed.
Want a few examples?
The financial collapse of 2008 and current recession were the direct result of gutting the Glass-Steagall Act which created firewalls between financial investment institutions, insurance companies and banks of deposit. The housing crisis was the result of a lack of oversight with regard to mortgage lending. The estimated $80 billion in Medicare fraud is made possible by the fact that there are precious few regulators. The run-up in oil prices in 2007 was the direct result of Republican deregulation of the commodity markets. And the rampant fraud in military and construction projects in Iraq and Afghanistan was the result of no-bid contracts with little to no oversight.
The list could go on and on.
Yet despite all evidence to the contrary, conservatives continue to push for more deregulaltion. Why? For some conservative legislators, it may be a misguided and misinformed philosophical decision. However, the cynic in me is more likely to believe that our representatives are paid to push for deregulation by the large corporations which contribute to their campaigns.
What else could explain why the conservatives in Congress continue to fight regulation of our too big to fail financial institutions even after their misadventures nearly led to the collapse of the world economy?