Rob Portman wrote a Wall Street Journal op-ed warning of upcoming regulation. How does this stack up against my theory of value transference, which is that we should regulate value transference activities but not value creation activities?
The Labor Department, for example, is working on a regulation that would increase the cost of retirement planning for middle-class workers, to "protect" them from investment help. This regulation, known as the Fiduciary Rule, would tighten restrictions and increase litigation risks for businesses that offer investment guidance on a commission basis, rather than the more expensive fee-for-service model.
Commissioned people in the financial services industry offering investment “advice” are the world’s worst scum, and any regulation is appropriate. The worst that could happen is that people find working these jobs to be unprofitable, and they decide to do something more useful with their lives such as work in engineering where they can develop real products that improve people's lives, creating real value.
Then there is the mega-rule on the shelf at the Environment Protection Agency (EPA) that could block business expansion in many areas of the country. Proposed in 2010, the Ozone Rule would impose a limit on ozone (which creates haze from emissions from cars, power plants and factories) so strict that up to 85% of U.S. counties monitored by the EPA would be in violation.
Nearly every activity that creates pollution also creates value, so yes, we don’t want to over-regulate here.
Also on the Obama EPA's to-do list for 2013 is a new rule that its regulators admit could increase costs for energy consumers and others by as much as $4.5 billion per year, depending on how it's implemented. The rule targets equipment that power plants and manufacturing facilities use to draw in water to prevent overheating, even though those intake systems are not harmful to human health or water quality.
Electricity generation is a value-creating business, so we don’t want to over-regulate that.
Consumers can also look forward to a new Department of Transportation rule that will increase the costs of new cars and trucks by mandating expensive new technology. First proposed in 2010, the Rear-View Camera Rule would require that all cars and trucks be equipped with a rear-view camera and video display on the dashboard, at a cost of some $2.7 billion to auto makers and car buyers.
Manufacture of automobiles is a value-creating industry, so we don’t want to over-regulate that.
Next year will bring not only new rules but new regulators. The Independent Payment Advisory Board—a bureaucracy created by the president's health-care law—has vast authority over patient care and health markets, yet it is immune from the usual public input and review requirements that apply to other regulators.
As the American Medical Association and others have pointed out, the board is charged with the contradictory mandate of cutting Medicare reimbursement rates to health-care providers, without reducing benefits or finding new ways to increase value. The result will be a technocratic body with almost unchecked power to limit access to care for Medicare patients.
This doesn’t sound like a regulation on BUSINESS, but rather common-sense rules to prevent the government from getting ripped off. Just as the company you work for has rules about what expenses you are allowed to get reimbursed for when you travel on business, the government is operating a health insurance business and needs similar rules to prevent wasting money, which is your tax money.