Consumers Could Stand a Little Less ‘Protection’
This is National Consumer Week. From the shores of Martha’s Vineyard, Mass., to the dark waters of Prince William Sound, activists are calling for more government restrictions on consumer choice. But before government tries to save people from themselves, Americans should consider some of the benefits that government is already providing to consumers.
Uncle Sam has done an exemplary job of protecting Americans against lower food prices. Federal agricultural policies add $10 billion a year to Americans’ grocery bills. The Commerce Department concluded that quotas on the import of sugar are costing consumers $3 billion a year in higher sugar costs. Uncle Sam restricts dairy imports to less than 2% of American dairy production. American milk, cheese and butter prices have been two or three times higher than world dairy prices. The federal government even restricts the transport of milk from areas like Wisconsin, where milk production costs are low, to Florida, where milk production costs are high, solely to boost milk prices and enrich dairymen.
Each year, marketing orders from the Agriculture Department force farmers to abandon or squander roughly 500 million lemons, 1 billion oranges, 100 million pounds of raisins, 70 million pounds of almonds and 7 million pounds of filberts. The main purpose of this federally mandated waste is to cause an artificial shortage of certain fruits and nuts and drive up prices. Since the Department of Agriculture is devoted to boosting farmers’ profits, it sheds no tears over policies that hit low-income consumers the hardest.
Uncle Sam has been extremely effective at protecting consumers against lower-priced foreign goods. Trade barriers imposed by the federal government cost consumers $70 billion a year, according to a study by the St. Louis-based Center for the Study of American Business. Federal trade restrictions add $2,500 to the cost of each Japanese auto sold in America, and have encouraged sharp increases in the price of domestically produced autos because of reduced foreign competition. Steel quotas cost U.S. consumers about $7 billion, and textile restrictions cost $19 billion. Protectionism costs the average American family more than $1,000 a year.
Federal regulations on automobile gas efficiency--the Corporate Average Fuel Economy standards--have forced manufacturers to build smaller, less safe cars. A Brookings Institution-Harvard University study indicated that the standards could cause an additional 3,900 auto fatalities per year. Less gas, more blood.
Food and Drug Administration regulations have sharply reduced the number of new drugs available to American citizens. Drug innovation has declined more than 50% in the last 25 years due to the barrage of new tests that the government requires pharmaceutical companies to pass. The agency has slowed the approval of several AIDS drugs that might have saved the lives of many AIDS sufferers. Washington attorney Sam Kazman observes that “each time FDA announces a new life-saving drug, you can be sure quite a few people have already died because of FDA’s delays in approving the drug.”
State licensing restrictions are pervasive and often designed solely to restrict entry into certain occupations and inflate prices that consumers pay. The Federal Trade Commission has estimated that unjustified and complicated state regulations for the licensing of dentists add $700 million to the cost of dental care--thereby preventing many lower-income Americans from being able to take proper care of their teeth.
Government housing “protection” has devastated the housing market in many cities. Rent control has discouraged builders from constructing low-income housing and prevented landlords from maintaining existing housing. In almost every city that has had long-term rent control, a severe housing shortage has developed, contributing to the homeless crisis.
Congress is on the verge of raising the minimum wage, though most economists agree that this will destroy thousands of jobs. Government will “protect” a multitude of relatively unskilled or inexperienced workers by destroying their chance to feed themselves or learn on the job.
Obviously, there is some fraud and coercion in the private sector, and government does need some power to derail private con artists and enforce basic property rights. But government should concentrate on prosecuting people who violate the contracts they make rather than restricting the types of contracts people are allowed to sign.
Consumers need more choice, not less choice. Government protection is already having a deadly impact on the lives of many Americans. Government should not impose any more protection until it corrects the dire effects of its previous protection.
