How much regulation is right for the United States? One might expect demand to rise after the speculative fury that ruined financial markets and then nearly destroyed the economy, or after the massive Gulf of Mexico oil spill. However, some guys still take every chance they can to get on TV claiming g’mnt is the problem, crying that the economy is overregulated and they want less of it.
Actually, too little regulation leads to great potential mischief. We have a great example of it right here in Iowa. In 2008 we had massive floods all over eastern Iowa. Short-term responses dealt with the aftermath of the disaster, but we faced long-term questions as well.
Sensible regulatory policy would try to avoid the worst effects of another flood. We could limit development in the 500-year flood plain or plan for dikes to be breached, to let water flow onto farmland rather than on to city streets. (Compensating farmers and landowners is a better option than rebuilding cities, businesses and homes.)
A committee of Iowa experts looked into how to avoid the worst disasters from flooding. They recommended limits on development and establishing ways to spread out the flood wave before it hit cities and built-up areas.
The result? Legislation to do both was introduced into the most recent legislative session but powerful farm groups and developers were too strong and nearly nothing was done.
The Gulf oil spill, bankers speculating on our country’s future, and unwise development in the flood plain are all good reasons to rein in markets. However, as we have seen, it is hard to regulate in America or in Iowa.
Posted by David Osterberg, Executive Director