Newswise — As the nation prepares to mark the five-year anniversary of Hurricane Katrina next week, there is mounting evidence that important lessons have yet to be learned from the deadly storm, says Wake Forest University Law Professor Sidney Shapiro, one of the country’s leading experts on regulatory policy. This week’s calls for deregulation from House Minority Leader John Boehner are particularly ill-timed given the anniversary’s reminder of the devastating human and monetary consequences of regulatory failure, Shapiro added. “Regulatory opponents keep complaining about how much regulation costs, but what they never talk about is the cost of the failure to regulate. 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, who along with Rena Steinzor, is the author of the new book 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 noted that a string of other disasters like 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.
Instead of repeating the mantra that free markets are good and regulation is bad, lawmakers would be better off examining why the current system is not working, Shapiro said. “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.”
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