If it wasn’t for the federal government, United States companies would produce items that could sicken, wound or even kill American consumers, according to Massachusetts Democratic Senator Elizabeth Warren.
In prepared remarks Thursday regarding the nomination of Richard Cordray to head the Consumer Financial Protection Bureau (CFPB), which were first reported on Politico, Warren stated that the only way the U.S. has succeeded has been through government intervention and regulation.
“It’s thanks to federal agencies that no one has to worry that those white pills are baking soda instead of antibiotics or that the paint on the baby’s crib is laced with lead,” stated the senator, who was elected last year in a contention battle with then Senator Scott Brown. “This agency is about making consumer credit clear — no more hiding tricks and traps in a thicket of fine print. It is about letting consumers see the deal — and not worrying about the things they can’t see.”
According to Warren, it appears that it wasn’t due to capitalism, free markets, human ingenuity and the plight of making a profit that created a successful country. Instead, it was due to bureaucrats in Washington and around the country that established an economic behemoth on the global stage.
What Warren opined isn’t uncommon in the U.S. nowadays. A lot of secondary and post-secondary institutions and government officials make the claim that without regulations then everything would be shoddy, poisonous and fraudulent for the consumer. But if this were true, what would be the incentive for the company distributing these goods and services?
Using Warren’s case, if a company was producing products that consisted of baking soda instead of antibiotics then consumers would not be buying anything from them. If a private entity were creating baby cribs that were actually painted with lead then parents would not be acquiring these products for their children. In the end, these companies that are deemed nefarious would not be generating any revenues or profits.
In a capitalist and free market society, the way that companies become successful is if they provide goods and services that improve the lives of people each day inexpensively and continue to innovate their respective niche. Although some big businesses survive through government assistance, most private sector companies depend on customer satisfaction in order to thrive.
History has also shown that government intervention and regulations have actually done the opposite of what they were intended to do, such as antitrust laws, the Hepburn Act of 1906 and the Sarbanes-Oxley Act.
Government intervention in the railroads of the late 19th century led to a lack of quality in railroads.
When James J. Hill created steamships to carry American products to Asia, thus helping American farmers, government regulation forced Hill to offer discounts to everyone or no one at all. American exports plummeted because of the Hepburn Act.
The most recent example is the government wanting everyone to own a home. By establishing Fannie Mae and Freddie Mac, those who could not afford to own a home actually owned three at a time. Of course, this is attributed to the economic collapse that occurred in 2007/2008.
These are just only small examples of how government regulations have hindered economic growth and capitalist initiative and inventiveness. For some reason or another, those who propose abolishing the capitalist system believe the U.S. would enjoy the same standard of living that it does today.
If that’s the case then perhaps the U.S. should adopt the policies of Zimbabwe, North Korea, Venezuela, the Soviet Union and all of the other countries that have taken an anti-capitalist, anti-free market approach to society.
“Socialists want socialism for everyone else, but capitalism for themselves, while capitalists want capitalism for everyone else, but socialism for themselves,” wrote Llewellyn Rockwell in “The Left, the Right, and the State.” “Neither Ted Kennedy nor Jane Fonda practices a vow of poverty, nor are they taking any homeless into their mansions, while too many big companies try to short-circuit the market with government privileges. And one way they do it is through the regulatory agencies that acne Washington, D.C.”
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