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Government Regulations Add Value

Government Regulations Add Value

Government regulations have their genesis in addressing previously unknown shortcomings or problems. Let’s consider this statistic offered by Human Progress (@humanprogress) on Twitter:

“2,373 people died in airline crashes in 1972. With nearly 10 times the airline passengers, only 186 died last year.”

The upside in safety is due to regulations. In other words, as we learned about causes, regulations helped eliminate the causes.

The Trump Administration has defined a rule stating that for every new regulation being enacted, 2 existing regulations must be eliminated. What is the process for deciding which regulations should be rolled back? What review is involved? This idea seems idiotic to me as not all regulations are “equal.”

A month or so ago, I caught part of a radio show in the middle of the night discussing the idea of rolling back regulations. Some organization had quantified the cost impact of certain regulations and the negative impact on net profits as a percentage of cost increase. The idea was that government regulations did nothing more than undermine profits and, if we could eliminate them, we’d be better off. Who is “we?” The citizens or corporate owners?

Government regulations keep us safer. They aren’t merely the enemy of profits–they enable us to learn and grow as time goes on without negative side effects.

In the early 1970s, the catalytic converter became a requirement for automobiles sold in California. I remember arguments that this would unnecessarily increase automobile costs. The air quality in California was horrible. California might not be inhabitable without the catalytic converter on automobiles.

Consider the air quality issues in India and China today. These countries lag in implementing regulations. Beijing and New Dehli residents are suffering.

When government regulations are rolled back, CEOs have a choice to make:

  • Accept the regulatory roll-back
  • Stay the current course

CEOs should stay the course on regulations that protect citizens and the environment irrespective of what the government requires. And, they should educate their customers that they are doing this and explain why.

Thought for the week:

“If the rate of change on the outside exceeds the rate of change on the inside, the end is near.”— Jack Welch

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What do you think? I welcome your comments! Dave Gardner
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Dave Gardner
Dave Gardner is a management consultant, speaker, blogger and author based in Silicon Valley. He’s been in the front row for the birth and evolution of Silicon Valley, the innovation capital of the world. Since 1992, Dave Gardner has focused on making the complex simple. He can be reached through his website, www.DaveGardner.biz, or via phone at +1 408-475-7068.
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