Justin Green - DC

[I]t is sad to report how lacklustre the debate about government is in America.

The obvious decline is on the right. This newspaper is hardly delighted that government spending has grown from 34% of GDP in 1980, when Friedman published “Free to Choose”, to over 40% today; but American conservatism has grown so angry that it has become a parody of its former self. Tax cuts are always right (even if they inflate the deficit); government activism is always wrong (even if stimulus helped avert a depression). And the right’s hypocrisy when it comes to spending on conservative projects (prisons, the armed forces, subsidies to big business) is breathtaking. George W. Bush presided over a huge growth in government.

If the Republican Party has moved to the unthinking right, the Democratic Party has moved to the unreforming left. Mr Obama has shown little of Mr Clinton’s enthusiasm for modernising government: indeed, he is unpicking welfare reform, by loosening work requirements. He has presided over a huge expansion of legislation, much of it badly drafted, such as the 850-page Dodd-Frank bill (see article). Worryingly in hock to the public-sector unions, Mr Obama seems to think the public sector is inherently more moral than the private one. Companies are at best cows to be milked, at worst prey to be hunted.

The fine (nameless) folk at the Economist drop the mic as they strut off the stage.

Two forces make American laws too complex. One is hubris. Many lawmakers seem to believe that they can lay down rules to govern every eventuality. Examples range from the merely annoying (eg, a proposed code for nurseries in Colorado that specifies how many crayons each box must contain) to the delusional (eg, the conceit of Dodd-Frank that you can anticipate and ban every nasty trick financiers will dream up in the future). Far from preventing abuses, complexity creates loopholes that the shrewd can abuse with impunity.

The other force that makes American laws complex is lobbying. The government’s drive to micromanage so many activities creates a huge incentive for interest groups to push for special favours. When a bill is hundreds of pages long, it is not hard for congressmen to slip in clauses that benefit their chums and campaign donors. The health-care bill included tons of favours for the pushy. Congress’s last, failed attempt to regulate greenhouse gases was even worse.

Complexity costs money. Sarbanes-Oxley, a law aimed at preventing Enron-style frauds, has made it so difficult to list shares on an American stockmarket that firms increasingly look elsewhere or stay private. America’s share of initial public offerings fell from 67% in 2002 (when Sarbox passed) to 16% last year, despite some benign tweaks to the law. A study for the Small Business Administration, a government body, found that regulations in general add $10,585 in costs per employee. It’s a wonder the jobless rate isn’t even higher than it is.

The Economist

Hubris and lobbying is an appropriate way to describe the two forces that have resulted in excessive regulation in the land of the free. Hayek would have wept if he’d seen what the country known worldwide for its “free market” had become.

This battle of regulation shouldn’t be about having Washington pick winners and losers. If we want to regulate, keep it simple enough so that small businesses can comply with regulations instead of being pushed out of markets by the expense of simply complying with new laws.

H/T Sullivan