Asked by Salon why he decided to enter politics and run against Rep. Allen West, Patrick Murphy, the Democrat nominee from Florida’s 18th district said the following:
I guess it started when I worked at Deloitte & Touche as an auditor. I dealt with Sarbanes Oxley quite a bit, so my eyes were opened quickly to where the government could do a better job. Then I left Deloitte to start an environmental company called Coastal Environmental, and spent about six months in the Gulf of Mexico cleaning up after the BP oil spill. And again I saw where I thought the government could do a better job. A lot of the regulations in place on these oil rigs and the safety requirements are regulations from the ’70s, when we were drilling in 100 feet of water and now we’re in 6,000 feet of water (emphasis added).
In order for the government to “do a better job” regulating companies like BP, it would have to be as dynamic and flexible as the market is, in order to keep pace with improvements in technology and methods for extracting oil. This is something that simply cannot be. Governments are slow, cumbersome, and reactionary in their regulation of the economy.
Rather conveniently, the first example Murphy uses demonstrates this principle very nicely. Sarbanes-Oxley refers to the burdensome and Johnny-come-lately financial regulation that George W. Bush signed into law in the wake of the Enron and WorldCom accounting scandals. It’s described by Karen DeCoster, a CPA, as “one hellish nightmare for the free market.” Also, it doesn’t work. Oh, and its costs of implementation are in the tens of billions. NB, if a Democrat is unhappy with the track record of a piece of financial legislation it must be abysmally poor.
Without being able to keep pace with the rapid improvements the market constantly brings about, the State is constantly playing a game of catch-up, wherein regulation is always behind innovation. Hence, we end up with regulations that are decades old and hardly applicable to current processes. Another problem is that innovation is dramatically hindered by these regulations. Because when firms are unable to exploit loopholes they’re forced to remain stagnate and progress comes to a halt. Then we have a third problem with government regulation, in which progress is reversed, and civilization regresses because of this intervention. Much of Jeffrey Tucker’s work catalogs this devolution into primitive life brilliantly.
Murphy gives us some insight into the failed ideology of government-as-benevolent-caretaker in that his instinct is to reform it, to pass “good” legislation and implement “good” regulations. That it has been such a terrible failure in no way discourages him and others of like mind. They look at constant government failure not as an indication that it’s time for a new approach, not that trying the same thing over and over again doesn’t work, but that we just need to give more and more power to our Overlords.
This hubris is something Lew Rockwell discusses in his latest podcast, in which he talks with Capital Account’s Lauren Lyster about the failed attempt of the State to direct monetary policy and the economy in general. It’s like these people are constantly trying to prove Einstein’s definition of insanity.