(c) Steve Hathaway

Government regulations saved my life

Let's not forget that consumer protections are essential to the general welfare

April 23, 2014 5:00AM ET

Driving down the New York State Thruway on a warm Sunday afternoon this April, my wife and I were discussing plans for a grandson’s visit when, out of nowhere, a steel tube with a knobby end came flying up from the pavement, headed straight for us. We both thought we were dead.

The missile punched two tennis-ball-size craters in the windshield of my new car, sprinkling us with glass. But the windshield held. Because of that, we are alive — shaken but unharmed.

We were relieved and joyful. After we phoned 911 so the steel could be cleared off the road, we voiced our appreciation for consumer advocate Ralph Nader, whose selfless devotion to his fellow Americans and his success in getting government to require safer cars has saved more than a million lives so far.

The government rule that saved us grew from the 1959 deaths of some friends of Nader in a car built with misnamed “safety” glass. Nader discovered that Detroit knew how to build safer cars. The freshly minted Harvard lawyer set out to get regulations requiring seat belts, stronger door latches and heat-tempered glass with the strength and integrity to repel a steel missile in a 65-mile-per-hour impact.

But Nader’s work and the benefits of smart regulation are being lost and forgotten in our time, a lesson brought home to me a week later as I showed my third grandson, Jack, the new windshield in my Volkswagen CC.

At 14, Jack is already preparing to earn a doctorate in chemistry, with a heavy dose of philosophy on the side. But as well read as he is, he had never heard of Nader. Jack had no idea how we got seat belts, though he knew cars did not always have them. He was unaware that steering columns, which used to impale drivers in crashes, now collapse or that car radios and heaters once had big metal buttons that kneecapped occupants.

In 21st century America “regulation” is an epithet wielded by politicians in both parties as they seek votes by promising to shrink our government in the belief this makes us free.

Nader’s successes making products safer, jobs less dangerous and government information more available almost all took place in the 1960s and 1970s, before the conservative turn to the current political age, the Age of Reagan. While the framers had us imbue our government with powers for six noble purposes laid out in the preamble to the Constitution, including promoting the general welfare, Reaganism portrays government as the problem and regulation as an enemy of freedom — though no one is quite so heartless or foolish as to argue that we should have the freedom to die by dangerous windshield.

Societies, economies and technology are dynamic. As conditions change, so must regulations. Yet because politicians speak of regulation as synonymous with “bad,” our government’s duty to promote the general welfare slips further and further as necessary regulatory changes are stymied and moneyed interests write the rules for their own benefit.

Today the rhetoric that government is too big is a boon to those industries that want to turn regulation from a shield protecting the public into a sword they can wield against the public.

We hear constantly that regulation kills jobs and profits while creating paperwork for bureaucrats. Regulation can indeed do that, but it can also save lives, reduce injuries, enhance the environment, promote economic efficiency and reinforce integrity in business.

To get the most benefit with the least harm from regulation and to update regulations that improve safety and our economy, we need to develop a nuanced appreciation of what regulation is and can be. And we need to keep regulations from becoming a weapon that moneyed interests — those supposedly being regulated — can wield against everyone else. That requires enough dedicated and paid advocates for consumers, investors, workers and the environment to get balance in the rules, especially since industry employs well more than 100,000 people to shape rules to its liking.

The first step toward greater public understanding is recognizing that everything is regulated and that organized cooperative activity — i.e., society — is impossible without rules. Baseball, a fun but trivial activity, regulates everything from how many stitches are on the ball to what color yarn is used and what material the yarn is made from.

The best regulations inherently reinforce virtuous behavior and punish vicious behavior, as I teach students in my Syracuse University College of Law course on the development of business regulations, from the Code of Hammurabi nearly 4,000 years ago through today. The worst regulations, by contrast, protect those being regulated and their bad behavior against their customers, investors, workers and upstart competitors.

Everybody knows that business often resists regulation. Less well known is that business is the source of most regulations and that companies and trade associations deploy armies of lawyers, lobbyists, pollsters and publicists to promote ever more regulation in Washington and the state capitals. By obscuring this fact, they are able to convert regulations from promoting the public interest to promoting their own.

The Federal Register, in which proposed regulations are published, typically runs 250 to 400 pages each weekday. Business and industry draft many of these rules, written in dense legalese, for their benefit, with little to no public input.

This is not new. The financiers who owned the rails quietly supported the Interstate Commerce Act of 1887, adopted to rein in abusive railroad pricing and practices. The 1906 Safe Meat Act, spurred by Upton Sinclair’s novel “The Jungle,” was encouraged by the meatpacking industry. Indeed, Congress first passed a safe meat law three decades earlier, at the behest of industry, which needed to counter European claims that American meat was diseased.

Today the rhetoric that government is too big, too powerful and out of control is a boon to those industries that want to turn regulation from a shield protecting the public into a sword they can wield against the public.

Needless complexity is the friend of industry in these matters. Instead of simple, straightforward rules, such as those requiring strong glass in windshields, industry proposes the regulatory equivalent of Rube Goldberg machines — and then denounces them, to build support for future regulatory changes even more to their advantage. A good example of this is the Dodd-Frank financial-industry regulations, most of which would be unnecessary if we simply restored the 1933 Glass-Steagall Act, which required that retail banking, investment banking and insurance be conducted by separate companies.

New rules that benefit the regulated instead of the public lurk in the many tens of thousands of pages of new regulations proposed each year in the Federal Register and at the state level. Few such rules are ever unmasked for what they are: the antithesis of the public interest rules that Nader still fights for and that kept me alive to write this column.

David Cay Johnston, an investigative reporter who won a Pulitzer Prize while at The New York Times, teaches business, tax and property law of the ancient world at the Syracuse University College of Law. He is the best-selling author of “Perfectly Legal,” “Free Lunch” and “The Fine Print” and the editor of the new anthology “Divided: The Perils of Our Growing Inequality.”

The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera America's editorial policy.

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