The next few years are going to be difficult for a variety of reasons. But probably the biggest is that the bills for the last four years are finally coming due, in just about every way imaginable. I don’t just mean the debt, which we’ve been foolishly investing on short-term bonds to get lower interest rates today.
No, the bill coming do at the moment is the bill from the buildup of law over the last decade. Many of the regulations passed under both Bush and Obama are finally kicking in. And the price is high. This week, we have two good examples.
You might be familiar with Intade, the Irish company that allows people to place bets on events like elections. It’s proven useful for testing “wisdom of crowds” assertions about how well informed people can foresee events. Well, Intrade is shuttering thanks to the CFTC, who are asserting … well, it’s not really clear. They claim it’s because Intrade allow bets on commodities but it’s not clear that they’d let Intrade function even if it dropped its commodity bets. It mainly seems to be an assertion of generalized wrong-doing; there are precisely zero allegations of fraud or distortion. In fact, Intrade is one of the clearest markets you can get involved in since you are buying and selling contracts on whether real-life events will happen.
But wait, there’s more. We have been warning for some years about the CPSIA, the act that was supposed to stop lead out of our toys but — haha! — allowed in-house testing for companies that actually imported lead-contaminated toys. We warned it would destroy small businesses but our concerns were ignore. You’ll never guess what’s happening now:
Consumer At least some apparel manufacturers are opting to exit the children’s market rather than brave our labyrinthine minefield of children’s product rules. These requirements, which are arcane to trained lawyers and incomprehensible to most other people, have also forced micro-businesses focused on children’s clothing to cut back or to shut down completely. Thanks to our staff, we knew this sort of thing was coming, and with little if any benefit, but my colleagues decided to forge ahead anyway.
One small business owner, with fewer than 10 employees, told me of needing to add an employee to do nothing but administer and document his testing and regulatory compliance program. Another told me that since children’s garments were not a major part of his business, he has decided just to get out of that aspect of the business altogether rather than have to hassle with all the rules.
The CSPIA is one of these things that I can not be objective about. It is crushing small business, taking children’s toys and clothing off the shelves, empowering big fat businesses like Mattel and not making us any safer. You remember what I wrote about economic populism a while back? This is what the Republicans should be attacking: an out-of-control law that is screwing the little guy. It’s simply appalling.
That’s the tip of the iceberg of course. Obamacare and Dodd-Frank are still being written and are years away from true implementation. (And speaking of Obamacare, we’re paying a price for that too. The lie that this reduced the deficit has been exposed; the CBO is now projecting at least $800 billion in deficit spending over the next decade).
Batten down the hatches. This has only just begun.