Phil Hauck's TEC Blog

Sunday, March 27, 2016

On Congressional Corruption and Regulations ...

        They’re more closely tied that we think!
        Our form of national government seems not to have the charges of corruption that other so-called democracies have (Italy, Argentina, etc.), but it’s still corrupt on two important levels:
        Congress:  As Donald Trump says, “When I make a contribution to a legislator, I expect him to do what I need him to do.”  That’s a fact.  If you give substantial money, wouldn’t you, too?  If you needed money, wouldn’t you provide favors to your biggest benefactors?  That’s what we have … in spades.  Lobbyists focus laser-like on the Congresspeople who can do them the most good (usually Committee members), with massive dollars.  BOTH sides of the aisle.  Look at the lists of “greatest givers." (After 26 people were killed at Sandy Hook school in Connecticut, and than 80% of the American people supported some changes in gun control, why was there no legislation that got out of committee?)
        Regulators:  Every time any Government agency issues regulations, there are typically winners and losers.  The winners are those lobbying industries and organizations which recommended the regulations … and made the contributions that resulted in the pressures that got attention to the regulations.
        Witness:  Last year, the Obama administration recommended that the Internet become regulated by the FCC, and the FCC agreed.  The FCC staff has now been inundated with lobbyist attentions proposing more than a thousand new regulations, all promoted as serving the public good … which usually means protecting the incumbents.  The result:  Already there has been a decline in innovative offerings by broadband and cable content providers.
        Another example:  Dodd-Frank in 2010 vastly expanded regulations controlling banks, intended to keep large banks from becoming too big to fail.  Result:  Whereas in the past there were 75-100 new community banks formed each year, since then there has been only one.
        Our U.S. Representative, Reid Ribble, is retiring after six years in Congress.  When he was elected, he said that if he could have ONE impact, it would be to convince his fellow legislators that every time they pass laws requiring regulations, and every time a federal agency issues a regulation, that the cost of doing business increases ... and that cost is passed on to the consumer, without exception.  At the very least, for every organization in an affected industry, someone has to analyze the regulation to see if it applies, and if it does, to create an approach to confirming to its requirements.
        And:  Last October 1, medical organizations had to begin using more than 130,000 new codes for charging and billing, supposedly facilitating the move from fee-for-service to value-based pricing, and to expand the capability for analysis.  Codes for InPatient hospital procedures (which are declining) expanded to 87,000 from 4,000.
        And:  After several decades when the number of new businesses kept expanding, in 2015, for the first year ever, the number of net new businesses was negative … closings outpaced new ones.  Would 500,000 pages of regulations added since 2008 be a factor?  (Keep in mind that traditionally, small businesses accounted for two-thirds of net job additions each year.)  

        Of interest:  In 2015, regulators came up with 3,378 new regulations.

1 comment:

  1. Phil, The old saying is that power corrupts...and it also can be corrupted! The rules on lobbyists needs to change as does the length of service for Representatives and Senators. Of even more immediate importance is legislation that would outlaw super pacs! Just saying... Take Care, Big Daddy Dave