Your Teacher Said What?! (21 page)

Regulators like regulating so much that they even compete with one another: Genetically modified crops have to wade through dozens if not hundreds of regulatory hearings held by the Department of Agriculture, the Environmental Protection Agency,
and
the Food and Drug Administration. And they don't always agree: Biotech sugar beets approved by the Department of Agriculture, for example, can be banned under the National Environmental Policy Act; ones approved by the NEPA can be forbidden by the Department of Agriculture. The result, for fans of unintended consequences, is that the only companies able to survive this regulatory death of a thousand cuts are really big—which means that the regulations beloved of places like the Center for Food Safety, the Sierra Club, and the Organic Food Alliance (to recognize the plaintiffs in a lawsuit intended to ban biotech sugar beets) are actually forcing small companies out of the business altogether and leaving the field free for Monsanto and DuPont, neither of which is probably a favorite of the environmental lobby. Talk about unintended consequences.

And that's actually a big reason that free-market supporters find this so insidious. It isn't that they want unsafe food or dangerous mines or Congolese wars. It's that every new piece of legislation is a chance to pile new rules on the heads of American businesses, which are already drowning in the ones they have. In the end all I have to say is that brushing your teeth isn't a classroom rule.

 

Potentially the least offensive sort of regulation is the kind that requires manufacturers to tell customers just what's in their products. Though labeling regulations aren't cheap, a lot of their cost is actually what manufacturers call quality control: making sure that every batch of potato chips or shampoo or modeling clay contains the same ingredients as every other one. And while no business wants to share proprietary information with its competitors, anything that lowers the cost of comparing one product with another is generally beneficial to the economy; if businesses weren't required to share information about the amount of electricity your new washing machine used, it'd be harder—more expensive in time or money—to find the one you want. It wouldn't be impossible, of course: A trip to the library to read
Consumer Reports
, though, is a little more costly than just reading the label at Best Buy. If you must have regulations, those that reduce what economists call “information costs” are probably the least harmful. In fact, you can make a case that labeling regulations actually support free-market decision making because they leave the buying decision to the consumer: If I want to drive a gas guzzler, I can find the car with the worst mileage just as easily as the one with the best.

In practice, however, labeling regulations do a lot to reveal just what the urge to regulate is all about.

Here's how it always works. Progressive logic (if that's not a contradiction in terms) begins with the notion that everyone shares the same vision of the good life, that everyone, given a free choice, would decide to eat healthier food, use less fossil fuel, and (I guess) watch more public television and less Fox News. Since it's obvious that they don't always behave this way, it can only be because they have wrong, or not enough, information.

The answer is required labeling. Warning labels on cigarettes. Nutrition labels on food. Energy Star labels. Fuel economy labels. All of them giving information to consumers about the products they're buying.

However, since the impulse behind adding labels to millions upon millions of products wasn't to educate consumers but to change their behavior, the measure of the labels' effectiveness isn't how much information consumers have but what they do with it. And the goal of Progressives isn't to make sure that we know how much nicotine we are putting into our lungs, or saturated fat into our arteries, or gas guzzlers onto our roads, but to get us to stop doing so. Which means that so long as people are still buying cigarettes or Big Macs or muscle cars, the labels aren't doing the job. The next step, therefore, is to tweak the labels, which is why packs of cigarettes originally reminded us that smoking may be hazardous to our health and now rotate messages such as “Smoking by Pregnant Women May Result in Fetal Injury, Premature Birth, and Low Birth Weight” and “Cigarette Smoke Contains Carbon Monoxide.” (In late 2010, the FDA proposed yet newer labels under the Cigarette Labeling and Advertising Act: images including a toe tag on a cadaver.)

And obviously, the increasing rates of obesity in America suggest that nutrition labels haven't done the job either. Think that they're already complicated enough, what with calories, calories from fat (and the amount of three different kinds of fat), carbohydrates, vitamins, and cholesterol? Marion Nestle, a nutrition professor at New York University (and one of the leaders of the “because it's good for you” movement), agrees. This is why she has turned her attention to the
front
of the package: the part people see on the shelf. And because the nutrition information that companies currently provide on package fronts is intended to help sell products (Oh no! Not
selling a product
!), it tends to focus on the stuff that people want in their foods, like fiber or whole grains. Professor Nestle and her colleagues at the Institute of Medicine are trying to get the Food and Drug Administration to require that food companies include the bad stuff—the amount of salt, calories, and fat—on the front of every package as well as on the nutrition label itself, because, as the professor says, “all of this is about food industry marketing. If it weren't about marketing, all this stuff would go off the packages and we would go back to packages that just said what the products were.”

To Progressives, “marketing” is a dirty word.

It's not just the food police who get frustrated with the way people keep buying what they want, no matter how many times they're told it might not be good for them. The Environmental Protection Agency and the federal Department of Transportation have been labeling new cars with gas-mileage estimates ever since 1975, with the goal of persuading people to buy more fuel-efficient cars.
²⁹
In August 2010, evidently out of concern that people were unable to figure out what “16MPG City/24MPG Highway” means, the EPA and DOT jointly announced a new labeling plan, under which cars would be given a letter grade depending on how virtuous—I mean economical—they were to drive. In order “to convince consumers to buy vehicles that use less energy,” the new labels would give
A
grades to all-electric vehicles and plug-in hybrids—those that are “charged with an electric power cord and have small engines,” while cars like the Ferrari 612 Scaglietti would get a
D
(apparently the EPA, like Progressive schools, can't bear to give an
F
to anyone). Which means that someone in Washington actually attended a meeting where everyone agreed that someone considering buying a $300,000 car with 530 horsepower is going to care whether it received a
D
—and that it mattered, given the two hundred or so Ferrari 612 Scagliettis sold in the United States annually.

 

Whether it's a law firm buying special chairs for its paralegals because of Occupational Safety and Health Administration “ergonomic” regulations or an independent trucker forced to send a 1099 tax form to every service station from which he buys more than $600 in gas annually,
³⁰
regulations cost. A lot. At least one estimate is that the cost of federal regulations is more than 8 percent of America's GDP—and because a big chunk of that is hiring departments full of people to fill out forms, the costs fall most heavily on smaller businesses, which aren't big enough to have such people on staff.

There's a theory, in fact, that regulating is such an irresistible addiction for government that the number of regulations can't help but keep growing, under both Republican and Democratic administrations. As government grows, so does regulation, and it's certainly true that some Republican administrations haven't exactly reduced the number of regulations that either stifle American growth or promote the interests of political cronies (usually both). Whatever you think about regulations, this theory goes, you can't really blame one party for the thousands of new ones coming out of Washington these days, since no matter who is in power, they keep adding regulations.

Nope.

As David Frum reminds me, when I was Blake's age, the federal government regulated the price of every ticket on every airline; the price of every cubic foot of natural gas; the size of the commissions that stockbrokers could charge; the amount of interest that could be paid on bank accounts; and even the content that radio and TV stations were required to broadcast in the form of political speech.

Some of these regulations, like the “fairness doctrine” that was the result of the Communications Act of 1934, date to the original New Deal. And some of the most costly regulations in American history are even older; it was the Roosevelt administration, after all, that presided over the end of the biggest regulatory fiasco in U.S. history: Prohibition.

But the president who really gave deregulation a good name—and so much else—was my hero: Ronald Reagan.
³¹
From the 1982 breakup of AT&T to the 1987 sale of Conrail (the publicly owned company formed to take over the assets of the Penn Central Railroad in 1976), President Reagan presided over the most significant deregulatory era in U.S. history—so significant that the portion of the American economy produced by highly regulated companies and industries, which represented more than 20 percent of the U.S. GDP when he was inaugurated, had dropped to less than 7 percent by the time he left office in 1988. Less regulation meant more productivity—more people making and selling more stuff at lower prices. Does it surprise anyone that we still remember that era as one of America's most successful?

Which brings me back to Blake, and those laws preventing tickets from being sold at market prices. As you'll recall, Blake isn't very fussed about my paying market prices for tickets she wants, no matter what the regulations say. On the other hand . . .

 

“Dad?”

“Yes, Blake?”

“What's the price for our book?”

When she asked, the price on the book hadn't been set, but I tried to field the question.

“If what you're asking, Blake, is what people will pay for it, that depends.”

“Depends on what?”

“Some stores sell books at full price, but a lot sell them at a discount.”

“Discount?”

“Several dollars less.”

“Less?! Why should someone pay less?!”

“Books aren't like tickets to a Reds game, Blake. If a game is real popular, the price of the seats goes up, because there's only one place to see the game and it has only so many seats. But if a book is popular,
lots
of places are selling it and competing for customers. So the best-selling books are the ones with the biggest discounts.”

“So a lower price means we're selling more copies?”

“I think so.”

“Well . . . that's okay.”

 

We may make a capitalist out of Blake yet.

 

You can't throw a rock in any parking lot in Short Hills, New Jersey, without hitting a car sporting an “Eat Local” bumper sticker. Whenever I see one, I'm tempted to throw the rock very hard, indeed.

The Kernen family, you see, doesn't make a point of buying locally grown food. Or organically raised chicken. Our only real encounter with the “slow food” movement is waiting for pizza delivery. We don't think this is any particular virtue. But neither is it a vice.

We do shop for food, of course. Our local supermarket is very happy to sell us turkey burgers, apples, grapes, butter, chocolate-chip ice cream, Froot Loops, about a hundred different kinds of bread, about a thousand different kinds of cheese (okay, maybe it just looks like a thousand), pet food, paper goods, cleaning products, over-the-counter medicines, and enough prepared foods to feed a regiment a different meal every day for six months. They'll even sell us wine and beer. When tourists from the less developed parts of the world visit the United States, the most reliable way to overwhelm them is not a trip to Yankee Stadium or the White House but by a simple visit to an ordinary American supermarket.

This is true when these supermarkets are compared not just with their equivalents in other parts of the world but with their equivalents in every other time in human history. And the sheer abundance is only the half of it; food has never been cheaper.

Take the loaf of bread for sale at our local grocery for $1.79 a pound. Two hundred years ago, that bread's cost, in labor, was more than two hours. Based on the current average U.S. hourly wage—a bit more than $22—the cost today is about five minutes. When I was Blake's age, the average U.S. family—such as, for example, mine—spent more than eleven cents out of every dollar of disposable income on groceries. Today that family spends only a bit more than five cents—a drop of more than 50 percent.

There are a lot of reasons for this, including higher wages, along with gigantic improvements in agricultural productivity and in the transportation available to move food from farm to table. One is the supermarket itself.

No one reading this book is old enough to remember when the dominant way Americans shopped for food was in over-the-counter markets, essentially unchanged from the general stores that Blake and Scott have only seen in western movies. In the 1920s, that started to change, primarily when the Great Atlantic & Pacific Tea Company—A&P, which at one time was responsible for taking in more than half the entire country's grocery-shopping dollars—started converting them to self-service groceries. In 1930, Michael “King” Cullen opened America's first recognizable supermarket in Jamaica, Queens, but it wasn't until after World War II that supermarkets really took off.