“Regulation”, as a concept, faces a serious image problem that I think is somewhat unappreciated. The main way that the average American faces regulation is as pointless red tape. My favorite hobby horse to ride on this is the “No gadgets during takeoff or landing” rule. The Wall Street Journal somehow thinks it can run a piece headlined, “Do Our Gadgets Really Threaten Planes?” when the answer is obviously, unavoidably “No”. Every single flight in the US has a cellphone turned on during takeoff and landing, and the vast majority have one in active use. Yet there have been no cellphone-related crashes. This seems to me like prima facie evidence that the threat is less than threatening. And it makes the FAA look absolutely ridiculous every time a passenger grouses to a flight attendant and is told it’s government policy.
At the same time, the modern regulatory state is absolutely essential to well-functioning markets. Don’t get me wrong, laws like Sarbanes-Oxley impose a lot of red tape on businesses. Enterprises hate doing all the paperwork and what is seen as “compliance bullshit”. But this is far from a meaningless hurdle – doing all that paperwork is to some degree the point. The more red-tape-paperwork that firms have to do, the harder it is to get away with fraud, illegal pollution, labor violations, or all other sorts of mischief. That’s certainly not to suggest that more regulation is always better, or even to defend Sarbanes-Oxley in particular. However, it’s pretty easy to tie up the necessary sort of regulation (SEC filings, conflict-of-interest disclosures, independent auditors) in the public mind with the turn-off-your-devices sort of bullshit, obviously irrelevant ruling that is their main point of contact with the regulatory state. Those are, after all, the ones you tend to remember.
I don’t have an obvious resolution to this PR dilemma – if I did, I’d have a bright future as a political consultant and general image guru. I doubt that Luntzian language games
can win this one for the regulatory state. I would have said that having a major financial crisis would be the best way to improve the image of business regulation, but aside from the merits of Dodd-Frank, Congress is busy at work trying to gut it
already. While this might seem orthogonal to the actual issue in question, I’d say we could probably use better-paid regulators and a more professional regulatory bureaucracy. Nothing breeds respect like results!