Regulation Recedes with Katrina’s Waters

In addition to the city of New Orleans, Hurricane Katrina has washed away a noticeable portion of American business regulation. Naturally, in a crisis, certain rules go out the window – the Romans would even suspend their usual constitution in times of great crisis to empower a dictator to act like a king. However, the question with regard to the regulations currently tossed aside is whether the waivers currently in place will be permanent.

The Republican Party has had a long-standing (that is, prior to Ronald Reagan) hatred of many work-place and market regulations. As a general rule, suspicion of rules is a good thing. However, the fragile structure of a modern market society also hinges on certain regulatory restraints on economic actors. In short, it is rightly illegal to hire people to kill the CEO of a rival firm – no matter how much economic sense it makes.

As the US government belatedly gets its hands around the mess in the Gulf States (Louisiana, Mississippi and Alabama and notIraq, Kuwait and Saudi Arabia –that’s a different mess), a great many rules are being suspended. For example, the Department of Transportation has relaxed the rules on how many hours a trucker can spend behind the wheel when fuel is the cargo. This seems to be quite sensible. Add to that the suspension of the Jones Act, which normally requires fuel tankers and the like to be US-flagged if they operate in America’s coastal waters in the Gulf of Mexico.

Less clever is the suspension of the Davis-Bacon Act that requires the “prevailing wage” to be paid for federally financed construction projects. Since this is usually higher than the local minimum wage, George “Nero” Bush claims the suspension “will result in greater assistance to these devastated communities and will permit the employment of thousands of additional individuals.” Having launched an illegal war in Iraq on the cheap, he now seems to be determined to rebuild the South at a discount by holding down wages of those who have lost just about everything.

Equally dumb is a proposal from Congressman Tom Delay (R-TX) who wants to expand the US oil and natural gas supply by drilling in places currently under a moratorium. America will be a more secure and vibrant nation and economy if the reliance on petroleum as a fuel is reduced (which high prices are currently doing) rather than on increasing supply. The cure for heroin addiction is not more smack in the street and lower prices; it’s kicking the habit. Mercifully, this change would require a new act of Congress. These other moves, though, may become permanent just through inertia.


© Copyright 2005 by The Kensington Review, J. Myhre, Editor. No part of this publication may be reproduced without written consent.
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