Saturday, April 24, 2010

Won't somebody think of the children!

So the big dumb law that's supposed to "protect" children from evil, evil lead...

Yeah, there's some loopholes. Ed Morrissey from Hotair:

So let’s get this straight. Mattel buys millions of items from China that violate American product-safety laws and standards. Congress reacts by punishing the entire industry, especially those small businesses that can’t afford independent testing, especially on products that don’t really need it. Thrift stores can’t resell merchandise without testing, making their business model impossible and threatening the charities that rely on those sales. Meanwhile, the economy of scale means that this law gives Mattel a competitive advantage from their own malfeasance — and they get the waiver on independent testing?



Yesterday, we discussed crony capitalism. This is exactly what is meant. This is a perfect example of government picking winners and losers in the marketplace through legislation written to be sympathetic to big businesses, and an enforcement mechanism that favors the big players even beyond the legislation Congress passed. Mattel can push its smaller competitors out of business, or force them into buyouts, because they broke the law in the first place.



Under big government, big companies make out better than small companies. Following regulations costs big companies less on a percentage basis. That's assuming the same enforcement requirements, which as we see in this case, can be subverted.

And the subversion happens because bigger companies can spend more on lobbying and bribes, and with the government picking winners and losers, it's in a big company's interest to make sure its competitors (especially ones that are smaller but growing, and thus a threat) are the losers.

For their part, big government prefers big companies. It's much, much easier to regulate an industry with a handful of big players, than one with a wide open field. It's like herding a couple sheep instead of herding a pack of cats.

Also big companies are more "stable" they're not as inclined to rock the boat as a smaller company. By definition they've already got a large portion of the market, so they're less destabilizing, always a plus in the eyes of big government.

Hmm... so we have an alliance of big companies and big government to control the market and reduce individual freedom.

Where have I heard that song before?

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