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The consumer's best friend

"The consumer's best friend" Continued...

Issue: "Broken beyond repair?," Sept. 25, 2010

Did you see improvement? Five years later I was still on the beat; we would do the same tests and get the same results. So we started wondering, what was the Department of Consumer Affairs doing? We checked it out, and it was licensing people. That sounds good, intuitively. We license dogs and we license drivers, and it sounds like it's going to make life safer. But it doesn't: It just adds bureaucracy. It made everything cost more. Now every business had to hire a lawyer just to understand the forms and go down there and get a license. If you're an immigrant trying to open a new repair shop that would be cheap and serve people in poor neighborhoods, maybe now you couldn't because it was too expensive. Or, maybe you had to go into the black market and operate without a license, and risk being busted by the police-or extorted by the police, because once you're underground the authorities can use you more easily.

Then you started to do stories criticizing regulation? I talked about how when the government got rid of the Interstate Commerce Commission, suddenly they got rid of these idiot rules that would cause trucks that went from the farm with a load of carrots to have to go back to the farm empty, because they had to get permission from the bureaucracy to carry furniture back to the farm. Now they were going full both ways and we saved billions of dollars. And deregulation of natural gas prices: Politicians said the prices would go through the roof if we didn't limit prices, and they did go up at first, but then there was much more production, and the prices went way down.

So your street-level experience suggested that if a company is doing something wrong, competition will eventually take care of it, but government, operating without competition, can stultify the whole process? And keep it bad forever, like the public K-12 education system. I could always find scams when I was a local reporter: There was the New York scam, the Portland, Ore., scam. But when I got to Good Morning America and 20/20, we couldn't find many. That's because of competition: With free competition, the cheaters don't get very big. The way to get really rich in America is to give your customers something they want, something good. If you cheat people, word gets out. You can make money for a while, but eventually it peters out.
To hear Marvin Olasky's complete interview with John Stossel, click here.

Marvin Olasky
Marvin Olasky

Marvin is editor in chief of WORLD News Group and the author of more than 20 books, including The Tragedy of American Compassion. Follow Marvin on Twitter @MarvinOlasky.

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