The Great Peanut Debate of 2009 is under way, and I’m coming in to the discussion after Round One, but it is a simple, emblematic example of why regulation is important. And, the important part is not just that regulation exist — many people will talk in the coming months about all the regulations that existed under the Bush Administration — but that the regulations (changes, additions, state enforcement or whatever) be smart.
What does “smart” mean? There are two main concerns that I have. For starters, enforcement needs enforcers. Staffing must be sufficient to meet the need. This will be particularly important to watch in the current economic condition because of state government cutbacks.
Second, and far more difficult, enforcement also needs to address the problem. This is a much more “eye of the beholder” analysis, but it is likely more important as well. Regulation that is not closely tailored to the problem can create significant burdens on a regulated industry without providing much benefit to consumers — or whoever the intended beneficiary of the regulation is.
As the peanut debate and much more problematic examples like financial regulation are discussed, those two items are at the top of my analysis.
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