What is regulation anyway?

There exists a pervasive mentality on the American left that our economic maladies would magically disappear if only the "rich" paid their "fair share" and if "business" was sufficiently "regulated." I want to focus on the latter half of that equation for a moment. We hear it all of the time in the liberal media that deregulation destroyed the economy. But what is regulation, and why would more of it fix the problem when it has failed so miserably at doing so in the past?

To answer, I'd like to revisit something that I posted nearly two years ago in the lead up to the passage of Obamacare. This time around, I'd like to present it using the analogy of your cell phone bill.

I have cell phone service through a major provider. They offer 450 anytime minutes for $39.99/month. If that doesn't meet your needs, you can opt for other domestic calling plans that include 900 anytime minutes for $59.99/month or unlimited calling for $69.99/month. Want to add texting? You can get 1000 messages for $10/month, 1500 messages for $15.00/month, or unlimited messages for $20/month. If you've got a smartphone and want internet/data then they have a solution for you too; 200 MB for $15/month or 2 GB for $25. You have choices and can customize a plan that fits you and your lifestyle. If you don't like any of those options and are willing to sacrifice your coverage area, you can choose another provider that offers unlimited talk, text, and data for $69.99/month or you can go with a prepaid cell phone, for example.

Suspending disbelief momentarily, let's assume that the government were to consider cell phones a right as many on the left posit to be true of health care. You can't possibly get by on only 450 minutes/month; you need at least 900 minutes/month to adequately function in society. Texting? It's a given that you need texting; at least 1500 messages/month. And internet? How are you going to have a cell phone and not have the internet?! You need minimum 200 MB/month and that is really cutting it close. So we're going to mandate that all cell phone providers make available plans to consumers including the above minimum coverage.

"But what if I don't need texting?" Too bad. "No really, I don't want a contract I just want to prepay for minutes and buy more when I run out." Nope, not happening. "I have a home computer, really I don't have the money for internet on my phone I can just use free Wi-Fi or wait until I get home." Sorry about your luck...now pay up!

This may sound absurd but this is exactly what the government does every day with a wide-ranging host of regulations; over 80,000 pages of new federal regulations were added in 2010 alone. With the above cell phone example, people that don't text or use the internet on their phone could once opt for a plan that costs them $39.99/month, end of story. With our new regulations, their minimum coverage option would be $89.99/month, a full $50 more monthly, and include many features that they would never use. It also blocks smaller providers that lack the infrastructure to support data transfers from providing lower cost options such as plans that provide minutes only or that allow customers to "pay as you go."

Regulation, no matter how well-intentioned, limits consumer choice and inevitably raises costs; goods and services such as health care and prescription drugs are not immune to economic reality.