Wise: Consumers need bipartisan action to counter regulatory activismposted April 16, 2015
By Brian Wise
April 16, 2015
Originally published in The Hill
In a sharply divided country, we often forget we’re all Americans first. But that means we’re all consumers second. Our personal and economic freedom is a critical component of all our lives, regardless of where we live or party label. For too long, however, we’ve watched government expand its impact on the free market and consumer freedom. Industries that have long-been providing products and services and employing millions of Americans now live under constant threat of government “oversight.” Consumers bear the heavy costs of an activist regulatory environment. The situation isn’t getting any better.
It’s a two-pronged problem. First, regulations impacting American consumers are being promulgated constantly by a federal bureaucracy that is growing in size, power and autonomy. Second, so-called watchdog and rulemaking agencies have become more aggressive as congressional and judicial oversight has been minimally effective at halting more damaging policies.
Americans love to blame the Congress for everything – as evidenced by its historically low approval ratings – but the overregulation businesses and consumers face is primarily not legislative in nature. True, major industry regulation still passes through Congress periodically, but the explosion of government agencies and special programs from within the Executive bureaucracy promulgate regulations that impact consumer freedom without Congressional action.
In order for the American economy to compete globally and Americans’ economic freedom to be protected, we have to realign the shallow Beltway conversation about liberal vs. conservative policies and focus on protecting consumer choice. If the American consumer considers the product to be reliable and of good value, then the regulatory environment should reflect and respect that sentiment.
Bipartisan support for companies like Uber and other members of the share economy is growing. Choice in education, including for-profit institutions and charter schools is also becoming less divisive among the political parties and public. Popular, innovative consumer and business financial products are helping millions gain access to capital.
Congress might not be the problem, but they are certainly central to the solution. We need more members of Congress standing up for consumers by looking at policy through a new lens. “Does this policy harm or help consumer freedom?” is a more relevant starting point for evaluating policy than allowing proposals to be simply be defined by liberal or conservative interest groups pushing from behind. In short, we need to redefine policies not as conservative vs. liberal, but as “pro-consumer vs. anti-consumer.”
Government bureaucracies are consumed with the notion that they exist to protect American consumers from themselves. This is what drives bureaucratic decision-making and leads to regulatory activism. Agencies don’t consider or often care about promoting innovation, maintaining choice or the impact of limiting access to popular products or services.
Lobbyists and interest groups from both ends of the political spectrum, have a financial stake in maintaining this policy construct because they profit off of the chess game that accompanies government intervention in the marketplace. They feel that it is the only way to exert control over the system. Make no mistake, Washington policymaking is an industry and as profit-driven as Wall Street. The profiteers in this case are consultants that drive the policy debate with little regard to the larger impact on economic freedom or the free market.
We are seeing the results of this environment with controversial programs like Operation Choke Point, which is designed to identify lawful so-called “high-risk” businesses and force banks to cut them off from financial services without due process. The Consumer Financial Protection Bureau, which is unaccountable to Congress and operates with little public transparency, can regulate products and industries at will. The CFPB has also initiated a “consumer spying” program, collecting the credit card data from virtually every American consumer to target and advance additional regulations based on spending patterns.
EPA regulations have long been a prime example of government impacting consumers by driving up costs. Environmental groups with significant influence over the administration killed the KeystoneXL pipeline despite overwhelming bi-partisan public and Congressional support.
The administration’s attacks on short-term and emergency loans is another example of consumer choice being fueled by political ideology rather than the choice standard. These products are used by millions of middle class Americans and small businesses to make ends meet. Consumers find them overwhelmingly beneficial but the government believes they shouldn’t have those options.
There has been talk on Capitol Hill about invoking the seldom-used Congressional Review Act that allows Congress to review and possibly reject agency rules before they take effect. We’re not talking about basic health and safety regulations, but aggressive requirements for companies in a range of sectors that drive up costs and limit choices for consumers. Little action has been taken to date.
It’s a winning strategy for members on both sides of the aisle to ignore superficial labels slapped on policy and regulatory proposals in favor of standing up for consumer choice. Congressional action to stop overregulation can be a bipartisan effort that eschews the status quo and embraces policies that lower costs, drive innovation, and increase freedom. Whatever the method, Americans deserve intervention. After all, we’re all consumers.
Wise is senior adviser to the U.S. Consumer Coalition.