At the fifth anniversary of Katrina new lessons about deregulation

[caption id="attachment_10141" align="alignleft" width="300" caption="New Orleans 17th St Levee on July 7 2008"][/caption]

 GHN Editor - "Regulatory opponents keep complaining about how much regulation costs, but what they never talk about is the cost of the failure to regulate," in  human consequences. So says Professor Sidney Shapiro, one of the nation's leading experts on regulatory policy, to those who foster belief in deregulation.

This week John Boehner, House Minority leader, calls for deregulation again, which Professor Shapiro says is ill-timed given the fifth anniversary of Hurricane Katrina.  Regulatory failure brought with it devastating human and monetary consequences, Shapiro underlines. Representative John Boehner is asking for deregulation, as mentioned on Meet the Press, but at the same time also said deregulation was responsible for the crisis.  In response to this, there has been criticism of Boehner's remarks and generalized statement about the need to deregulate while condemning it is hypocritical.


" The fact is that regulatory failure in the case of Katrina cost billions and billions of dollars to say nothing of lives lost," says Shapiro.  He has written a book with Rena Steinzor, entitled The People's Agents and the Battle to Protect the American Public: Special Interests, Government, and the Threats to National Health, Safety and the Environment.

In a letter to President Barack Obama, Boehner criticized the administration's plans to implement 191 rules with potential economic costs greater than $100 million, pointing out that "a number... may each have an annual economic cost in excess of $1 billion." But Shapiro says that the costs associated with regulatory failure usually far outweigh the expense of effective government regulation. "Various agencies of the federal government failed to protect the Gulf Coast from the full impact of Katrina, and now all these years later, we are seeing the same thing with the Deepwater Horizon Well," Shapiro said. He used as examples the various other disasters that include the financial meltdown on Wall Street, the recent Toyota recall, mine explosions and e-coli and salmonella outbreaks are also tied to regulatory failure.

"How do we explain these systematic failures? The answer is it's complex, but one problem is that we don't let government agencies do what they're supposed to do because too many people are trying to interfere with the regulatory system that's already in place," he said. Shapiro tells us people need to stop repeating the notion that free markets are good just because it sounds good and that regulation is bad.  Lawmakers need to figure out why the system is not working.

Shapiro concludes. "Regulation is vital, a lesson that regulatory opponents hope we forget despite Katrina, the Gulf oil spill, and all of the other calamities generated by a failure to regulate effectively."