“TOO MUCH GOVERNMENT” by Judge Jim Gray

  IT’S A GRAY AREA (3) July 29, 2007 - by Judge Jim Gray


  “TOO MUCH GOVERNMENT”


  To state the obvious, bureaucracies are found at all levels of society, including businesses, churches, law firms, universities, hospitals, charitable organizations – and government. And it is virtually always the inclination of bureaucracies to continue to expand in size and power, and for bureaucrats to avoid responsibility for their actions and inactions. Not only are governments not an exception to these natural inclinations, most of the time they are the skilled leaders.


  Today it is so unusual for someone in government to recommend that government be reduced in size or power that when it happens it results in headlines. Government size and power has gotten so extreme, that at this point the biggest thing that big government stands for is big government.


  Think about it this way. If, for example, you live in the City of Anaheim and you want to replace an old water heater with a new one, you must obtain a permit at the cost of $50 in order to get the new one installed. Or if you live in the City of Garden Grove and must spend $20,000 to put a new roof on your house, you will have to obtain a permit from the city at the cost of an additional $400.  


Of course safety is important. We do not want gas water heaters to explode or roofs to be unsafe or disfunctional. But why can’t the government simply set up a system that will reduce the risks of harm? Why does it have to oversee it and charge money for it? Government does virtually every job at greater cost than a competitive business would. Why is it involved? Because government took the idea of safety in the building and construction industry, and slowly over time expanded it into its own fiefdom. That is to say, it is doing what bureaucracies do best by increasing its size and power. Additional delay or expense caused by government involvement? You have nowhere else to go, so you have no alternative but to wait, comply and pay.


Government oversight in this area is not really necessary. Why not instead allow any licensed and bonded contractor to install the water heater or roof without government permits? If something goes wrong, the homeowner/customer could always sue the negligent contractor, and the bond would ensure that there would be money available if the suit was successful. As a practical matter, the bonding company would quickly set up its own criteria and programs of inspections before issuing a bond in order to reduce its overall exposure. But these private programs and costs would have to be competitive in order for the bonding company itself to stay in business.


We are all aware of the increasingly high cost of new houses, but are you aware that 30 percent of the cost of virtually every new house is spent in an attempt to comply with government regulations? If that could be reduced to 10 percent, the cost of new houses would be reduced accordingly.  


If the system were changed, would contractors start building their houses on “foundations of sand,” or stop doing things like using reinforced concrete? No. First of all, the government could still establish standards, and secondly, if the quality of the houses dropped, the customers would not only stop purchasing houses from those builders, but they would also bring a lawsuit against them. In addition, like we already discussed, the bonding company would soon set up their own inspections and requirements in order to limit their exposure to lawsuits.  


On a slightly different subject, why must a person get a license from the government and obtain mandated formal training in order to do things like braiding hair for a living? Or be a barber or a beautician? Government involvement and requirements reduce competition, drive up costs, and keep often quite qualified entrepreneurs out of business. Isn’t it clear that customers are almost always in a better position than the government to determine if their hair is being braided or cut satisfactorily? If the product is acceptable, customers will come back; if it is not, the entrepreneurs will either quickly start doing it better, or they will go out of business. Governments can still set up standards for safety and cleanliness, but leave the enforcement of those standards to the customers, the bonding companies and the justice system.


The same is true with childcare. Yes, it is critically important that our children be well protected and taught, but aren’t the parents in a far better position to oversee this than the government? Today the regulations are so strict and expensive, many qualified people are not in business because of the extra government-mandated costs and hassles. If your doorway is a few inches too small, or you only have one bathroom in your house instead of two, frequently you cannot get a permit to provide childcare without expensive modifications. That means in turn that the people who would have been your customers must either find another provider that is less satisfactory, farther away or more expensive, or do without. 


The same analysis is found in other government bureaucracies as well, such as the Federal Food and Drug Administration. For example, if an inspector with the FDA approves ten new drugs to be sold to the public, and nine of them save lives and reduce disease and discomfort, but one of them brings a bad result, that inspector’s career is in true jeopardy. In a bureaucracy like this, no credit will be given for the successes, but the employee’s “head will roll” for any failure.  


As a result, people who work in this bureaucracy have every incentive to delay decisions by requiring more study, research and/or testing, and by kicking the responsibility upstairs or downstairs. They allow new drugs on the market at their peril, and they know it. The fact that thousands of people may die or be in unnecessarily poor health because they are deprived of new beneficial medicines is outweighed by the possibility that many fewer other people may be harmed. In addition, it is estimated that this governmental approval process costs the pharmaceutical companies about $800 million for each drug that gets approved, and takes an extra 8 to 10 years to accomplish. This, of course, substantially increases the costs of our healthcare, and substantially deters the companies from pursuing the approval of drugs that have less of a chance to make big profits.


The better way would be to adopt the same approach as in the other examples we have already discussed. If a pharmaceutical company negligently makes a drug available on the market without adequate quality control, research and study, it and its insurance company would face a lawsuit from the person harmed. This would result in appropriate safeguards, but without the unnecessary delays and expenses imposed by the government bureaucracy. 


In summary, our present system of government permits, oversights and approvals results in unnecessarily increased costs and delay to businesses and their customers, increased and unnecessary size and power to government bureaucracies, severely reduced ability of people to climb onto the first rung of the entrepreneurial ladder, lost opportunities for customers, and unnecessary deaths and suffering. In short, no one is winning with the present system except big government. So in this area, like in so many others, don’t look for the government bureaucracy to lead the way for change. If change is going to occur, it is up to us to get it done.


James P. Gray has been a trial judge in Orange County since 1983, has written books entitled Why Our Drug Laws Have Failed and What We Can Do About It, and Wearing the Robe – The Art and Responsibility of Judging, and composed a musical entitled “Americans All.” http://www.judgejimgray.com