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The Trouble With Protecting Special Interests

Wednesday, April 6th, 2011
Posted in Advice by Joel Gross

If you have a special interest in something, especially if it is your job, you will fight very hard to protect it.  Let’s say that some outside force threatens your job, which is the source of your income and livelihood and how you feed your family.  You’d fight to protect it right?  You might even ask the government to step in and provide some regulations and rules that would protect your job right?

Politicians will do anything for a vote – after all they want to protect their jobs too- will pander to your demands.  They will create rules and regulations to protect your job.

Sounds great, right?

What happens when not just people in your occupation do this, but people in many other jobs create special interests groups and lobby politicians to create rules and regulations to protect their jobs?

Then it starts to become difficult to join many professions (doctors, attorneys, cab drivers, hair salons, acupuncturists, landscape architects, dieticians, engineers, veterinarians, accountants and another 177 jobs) require licenses.  These licenses make it more difficult to join a profession and often require years of experience, admission by a semi-private “board”, or other hoops.  Most of these regulations are set up so to restrict the supply of people in that job specifically so that the current members can make more money at the expense of the public and not worry about job security.  Some of them, especially in the medical field, restrict the type of business you can operate meaning that companies like Wal-Mart are barred from opening a bank to provide low cost services that Bank of America and Wells Fargo currently rip you off for.

You end up raising the cost of business for everyone and making the entire pie smaller.  If you were willing to accept a bit more risk in your profession (and expect everyone else to do the same), national GDP would actually increase enormously.  Right now, we have so many restrictions and regulations on jobs that it makes it hard to go start your own business and incredibly hard to try and grow one.

It’s sad how many trillions of dollars are left on the table by foolish pandering politicians and short-sighted special interests groups who sacrifice America’s freedoms to gain a short term advantage.