A Case for Regulation

There has been a lot of items in the news lately that in my mind make the case for government regulation. The case against government regulation is that it stifle innovation and that the market is the best ultimate regulator for business. But let's look at 3 specific examples of current issues.

First, take all the toys (and other products?) that are being imported from China that contain lead. Most of the lead in the toys come from lead paint used because it is cheaper. Now who should be held accountable? The companies like Fisher Price who are outsourcing the manufacturing of their toys over in China? The problem with the global economy we are now participating in is that there are more and more layers of outsourcing. Trying to track down the proper company to manage and then make sure that their products are safe would be burdensome to the company at the top. Also, countries like China and India that are taking more and more of manufacturing does not have any concept of quality control. On the evolutionary scale of capitalism, they aren't yet beyond the concept of you can't poop where you eat.

A second example which is even more current is the thousands of flights that have been canceled because airlines neglected to maintain proper maintenance on their aircraft. In this case, it is an example of lax regulation and companies taking advantage of that lax oversight to save money. In the meantime, there were planes flying with cracked fuselages.

Finally, there was a meat processing plant that was forcibly putting downer cows into the food chain. This caused a massive recall of beef mostly from school systems that were feeding the beef, unknowingly to children. This was another example of oversight that needed to be better. The company was waiting until the inspectors had left before they purposely put in the downer cows. There has been a lot of discussion about the worry that terrorists could do something to harm the food supply. Apparently, we don't just need to worry about the terrorists.

I'm going to make an assumption that the government should have a role in public safety. The level of that role is always going to be up for debate. In all the examples, you have to ask what is the best way to accomplish protecting the public. I would argue that proper government regulation is more efficient than letting the market take care of things. It's really the difference between being proactive or reactive. Being proactive you find out about issues before they end up on the front page. That to me makes the most sense. I have a job in the service sector. The more we are proactive with our customers on issues, the more profitable our business.

I would also argue that it does not behoove businesses to try and regulate themselves for public safety. The job of a publicly traded company is to maximize profit for their shareholders. That means that there is constant search for ways to be more efficient and push prices down. That is the opposite of the mission of public safety. That mission does not take into account the cost of public safety. The government's mission is public safety. A properly run government should be able to do it more efficiently than companies. It also saves the company the cost of self regulation (a big assumption that they would comply). The problem with the current administration is that is not competently run, as has been proved by Katrina among a long list of deficiencies. It becomes a self fulfilling prophecy if you come in saying that the government cannot do anything right and then set off and prove that theory.

Ultimately, I think there is a balance both from trying to be over protective from the government and being mindful of the burden. However, the above examples do not even pass the common sense test. Our children should not have toys with lead paint, we should before that the planes are safe BEFORE one falls out of the sky, and we should make sure that the food supply is safe. Those are pretty basic. As usual, a little common sense goes a long way.

Boycott China, not the Athletes

Regular Contributor - A Radical Centrist posts on the Olympics -

All this talk of boycotting the Olympics is, well, distracting from the point really. In the past the end result has never been a real impact on the nation in question, but always on the athletes. It is China, not the Olympics we should be talking about.

Okay, so the athletes in the Olympics are not just “amateurs” anymore. Many of them will and have found recognition elsewhere. But most of them will get one shot at being on the world stage as one of the, if not the, best in their sport.

Let’s start sending a message to China. Regardless of your position on Tibet (me, I tend to sympathize with the Tibetans) China could have avoided this row during all of the international scrutiny. The leadership there could easily have found a way to calm the Tibet issue for a couple of months and get past the Olympics without a real fuss. But they chose a typical totalitarian regime response and now blame Tibetans and Buddhists for damaging the reputation of the country and sabotaging the games.

Here is my centrist take on the whole thing. First picketing and demonstrating might get you on the 5 o’clock news in your town but won’t make a bit of difference. Second, boycotting the games will only hurt the athletes. Third personally boycotting the games is silly, how many of you were planning to fly to Beijing?

If you want to send a message, if you want to make a difference, boycott the sponsors and the suppliers. Take money from them. It’s too late to keep them for paying for the rights and getting the licenses needed for doing business in Beijing. But if you send them a financial message, impact their bottom line enough, they will stop doing business there, or at least will advocate on behalf of human rights and that will make some, even if not much, difference to China. I know it helped a little in South Africa in 1980’s. Coke lost a lot of market share over apartheid.

To that end here is a list of the companies you most likely will be able to boycott (there are others but I can’t get my keyboard to type Chinese characters, and most of us will not be traveling to China so won’t have a chance to not use those companies):


Coca-Cola (RC gets new customers)
GE
Johnson & Johnson
Kodak
Lenovo (the Chinese state owned firm that bought IBM’s PC division)
Manulife
McDonald’s
Omega (guess I’ll have to get that Rolex now!)
Panasonic
Samsung
Visa (Master Card and American Express could really do well on this one)
Adidas
Volkswagen (too bad too, they are about to make a diesel hybrid that gets 79.9 mpg!)
UPS
Budwieser
Snickers
Staples
PriceWaterHouseCoopers

If the US lawmakers and presidential hopefuls want to make a difference maybe they should boycott these companies that are helping China financially, and profiting off of a China that is oppressive.

Just a thought.

ARC

Being a Moderate & the Falacy of the Mean

Today I have another guest blogger that writes about what it means to be a moderate.

I want to describe two ways to be a moderate in politics. The first, what I'll refer to as the political centrist, believes that the right solution to problems is found in the middle of extreme views. This idea goes as far back as Epicuris in Ancient Greece who taught that the best way to live was a life of moderation. This was later refined into a moral theory by Aristotle who wrote that morally correct actions are those performed by a person whose disposition or character trait falls in the middle of two extremes. For example, the virtue of courage is a moderate disposition between the two extremes of cowardice and foolhardiness.

In the US, the political centrist adopts a similar stance for political solutions. A political centrist argues something like, "The correct solution to problem x is to find the middle ground between the liberal and conservative and adopt that position since either extreme is, by their nature, incorrect."

The other way to be a moderate is to recognize that joining political parties or embracing their claimed ideologies are not the way to decide social, economic, and diplomatic issues. Rather, this moderate examines the specific situation, examines the political views, and adopts the position that has the most weight of reason behind it. I will refer to the adopter of this position as a rational moderate.

The first view of being a moderate, the political centrist view, is fallacious. It succumbs to what is known as the "fallacy of the mean". Stated simply: just because a presented conclusion is in the middle of two extremes does not make it the correct conclusion.

For example, the seemingly never ending debate between teaching intelligent design and evolution in public school science classes across the country can be seen as two extreme positions. On the one extreme are the creationists, gussied up in the smarter clothes of intelligent design, arguing that evolutionary theory is incorrect. On the other extreme are Darwinists who think that intelligent design is pseduo-science at best and religious propaganda in public schools at worst. The centrist position would adopt a compromise view, such as either teaching both extremes, "teaching the controversy", or allowing some formal announcement deriding evolution as "just a theory" by administrators or stickers in textbooks. The problem with the centrist view in this situation is that it is wrong. The weight of the evidence that gives us the fact of natural selection based on biological research as well as the explanatory and predictive power of evolutionary theory coupled with the weight of reason that shows us that science should be taught in science classes and religion should be kept out makes the centrist conclusion the wrong conclusion. It doesn't help the centrist that every claim that intelligent design proponents make has been thoroughly dismissed and debunked by the scientific community. (Just Google "Project Steve" to see what I mean.)

The rational moderate would look at this and be swayed by the weight of logic and evidence on one side over the other. Some might argue that this shows a an inherent bias that a rational moderate is attempting to hide. Like our romanticized ideal of journalism, a true moderate should keep an open mind and remain impartial to both sides. Truth, however, is biased. Some positions are objectively better than others. And so rather than pull out our college football pennants with "Republican" or "Democrat" printed in large block letters and wave them wildly in the air for the current political speech regardless of the content of the message but simply because they're on our team, the rational moderate actually listens to what the speaker is saying and makes a rational choice based on logic and evidence.

The country could use a lot more of them. And the ones that are here should be really, really angry.


The Rational Moderate