tag:blogger.com,1999:blog-19937890.post4687866466686967267..comments2023-10-15T08:15:46.205-04:00Comments on Mike's Eyes (Spotted By): Thoughts on the Meat Recall and RegulationsMichael Neibelhttp://www.blogger.com/profile/15321103608597264855noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-19937890.post-37901535429278582692008-02-23T21:42:00.000-05:002008-02-23T21:42:00.000-05:00Joseph:Thanks for the reference to the Rand essay ...Joseph:<BR/>Thanks for the reference to the Rand essay but I don't happen to have that one. I started my subscription to the Objectivist in 68. As far as I know, it only exists in the bound volumes now. I have been thinking about buying the ones I missed.Michael Neibelhttps://www.blogger.com/profile/15321103608597264855noreply@blogger.comtag:blogger.com,1999:blog-19937890.post-67498631544120225502008-02-23T15:40:00.000-05:002008-02-23T15:40:00.000-05:00Mike, Another great article regarding regulation a...Mike, <BR/><BR/>Another great article regarding regulation and the government alphabet agencies is Ayn Rand's "Who Will Protect Us from Our Protectors?" in The Objectivist Newsletter: Vol. 1 No. 5—May, 1962<BR/><BR/>Joseph KellardAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-19937890.post-39270207751779182252008-02-19T23:00:00.000-05:002008-02-19T23:00:00.000-05:00Amit: Thanks.I think the toy problem with China th...Amit: Thanks.<BR/>I think the toy problem with China that you mention is a good case in point. Parents are lulled into trusting the regulators to protect them, something the regs can't do.<BR/><BR/>Galileo: Thanks too.<BR/>I've not met any regulators myself but did observe a terrible result of one. One plastic company I worked for used to buy vast amounts of ground up telephones from a central warehouse, about 40,000 lbs every two weeks, and reprocess it into their product. This was a top grade ABS plastic that was being reprocessed. Then the gov decided that all telephones had to be made of flame retardent ABS. Well, FR plastic cannot be remelted and reprocessed. So now all that waste plastic was going straight to the landfill. One of those unintended consequences I'm sure. All so some regulator could feel that he did his altruistic duty and made something safer for the helpless masses. Sad.Michael Neibelhttps://www.blogger.com/profile/15321103608597264855noreply@blogger.comtag:blogger.com,1999:blog-19937890.post-7562459286158415452008-02-19T20:55:00.000-05:002008-02-19T20:55:00.000-05:00Nice post Mike. I particularly liked the ending s...Nice post Mike. I particularly liked the ending sentence.<BR/><BR/>I think many of your points, notably "Sure, the CEOs could declare bankruptcy, shut down the company and open up under a new name. But they would have to spend years developing a good reputation with the public." also obtain with respect to the Chinese toy situation. In a truly free market, Chinese toys wouldn't just compete on price, there would be a big premium paid for reputation since educated parents would want to be sure that their children's toys were safe. Presumably this would involve new entrants to the market (the Chinese in this example) having to jump through hoops in order to show how their processes are, and will remain, safe; looking for independent third party quality audits and certifications, etc., etc. <BR/><BR/>However, as it stands now (as Galileo points out) there is just a minimum standard to be met and parents assume that the government is looking out for them -- with the result that they don't make the active judgments necessary to have a truly safe and informed marketplace.Amit Ghatehttps://www.blogger.com/profile/01812792299608268787noreply@blogger.comtag:blogger.com,1999:blog-19937890.post-23569214130748337162008-02-19T19:19:00.000-05:002008-02-19T19:19:00.000-05:00Excellent post.You use the example of this meat re...Excellent post.<BR/><BR/>You use the example of this meat recall to show how regulation is harmful. It violates rights, reduces the value of reputation and thereby interferes with the market for safety. The result is less safety (or even too much safety at too great a cost than market participants want).<BR/><BR/>The point about the seal of approval for shysters provided by government agencies is a good one. This is true whether it is the meat industry regulated by the FDA or the securities industry regulated by the SEC. Meet the minimum requirements and you get that FDA or SEC seal of approval, which requires a lot less effort than achieving a reputation in the marketplace.<BR/><BR/>Incidentally, I have met many regulators over the years as a stock analyst covering the electric utility industry. Most of them are not the "sharpest tools in the shed"; they are generally not capable of working in jobs of same rank as the people they regulate. Of course, there are a few bright ones, who often turn out to be activists who leave a mark of destruction in the form of new regulations that outlasts their tenure in office.<BR/><BR/>When you see regulation "up close and personal" as I have, it only reinforces the truth that regulation destroys. It destroys safety, health and wealth, all of the things it purports to preserve.Galileo Blogshttps://www.blogger.com/profile/02592692929747610846noreply@blogger.com