Aggressive regulation is government’s money tree

Money TreeRegulation is now a growth industry. Aggressive prosecuting is the newest form of taxation, a money tree for government.

Government, colluding with its own regulators and leftist lawmakers, has quietly mapped out a carefully planned strategy, out of the public eye, to go after deep-pocketed businesses. And it’s working.

The strategy works like this:

Put as many laws and rules on the government books as possible, to multiply the ways a business can run afoul of laws, whether inadvertently or not. The average Floridian would be astounded to learn how much trial lawyers spend in Tallahassee each session to lobby for laws that allow plaintiff attorneys to scalp more money from businesses.

Encourage zealous behavior by regulators and prosecutors, and reward and promote the most aggressive regulators who are most successful at levying fines against businesses.

Make few distinctions between businesses that accidentally break a rule vs. those that knew it was a violation and did it anyway.

Try your case whenever possible in the press, to get more publicity and to gather the power of the press behind you. As attorney general, Charlie Crist was a master of this tactic. Due process is a casualty when the media is used to spread sensational accusations. Enlisting the aid of the press is a favorite tactic of unethical regulators and prosecutors like New York’s Eliot Spitzer.

Use regulations to pry money out of businesses to pay for government expansion. Creating big increases in the number of laws and rules means there’s no limit on how many dollars government regulators and prosecutors can siphon off to fund government’s growth. No prosecutor or regulator will admit it, but radically raising the amount of fines against businesses and corporate officers is a clever new way to tax.

Ignore the immense conflicts of interest that give regulators a financial incentive to widen their net and demand higher fines. They enrich themselves and enhance their own career paths by piling on massive fines and accusing their targets of conflicts they overlook in their own business dealings.

scales-of-justiceOh, I can hear the apologists from the left whining now. “Come on, Smith, these corporations were breaking the law, and they got caught.” The problem with that view is that lawbreaking is whatever a prosecutor or regulator says it is, as long as they can convince a judge or jury of their case. Or they win merely by browbeating the accused into a financial settlement.

The government is all-powerful. It holds all the chips. It has virtually unlimited resources and staying power to play favorites and go after who it chooses. It can outlast you by abusing the appeals process for years. Even if you are in the right, the government can choose to bankrupt you. You end up exonerated, maybe, but broke.

As a result, most businesses settle out for huge fines, rather than face an unknown outcome and protracted litigation that breaks the company, with no assurance of a just result if they go to trial. Settling becomes the only out in a governmental chess game that puts businesses on an unlevel playing field, a testament to the power of government to confiscate money.

To be sure, not all regulators and prosecutors are guilty of this abuse. But there is no greater hypocrisy than using government power to create new rules in the name of consumer protection, when the real purpose is to increase government revenue.

The real story here is that the left has figured out how to legally turn on the money spigot to fund its agendas and social engineering programs and expand the size of its agencies. Many prosecutors’ and regulators’ conflicts of interest mean that ethical behavior has become a casualty of the government’s game.

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John R. Smith

John R. Smith is chairman of BIZPAC, the Business Political Action Committee of Palm Beach County, and owner of a financial services company.

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About John R. Smith

John R. Smith is chairman of BIZPAC, the Business Political Action Committee of Palm Beach County, and owner of a financial services company.

  • KB Cook

    The foolish build the house on the sand and when the natural forces come against it, it falls with a great fall.

    "Governmental distortions of the free market mean that market prices are no longer a good signal of consumer demands or producer supplies. Therefore supply and demand will not match, and the market will not naturally 'clear.' Overproduction and waste of some things and underproduction and rationing of other things necessarily result. Both waste and rationing are very costly to an economy. Waste costs the public more tax dollars and the freedom to spend those dollars, since they have to pay for the government-caused waste. Rationing costs the public more time and personal freedom, as people have to wait on a list rather than be able to purchase the things they want or need." — Grudem, Wayne (2012-01-31). Voting as a Christian: The Economic and Foreign Policy Issues (p. 59). Zondervan. Kindle Edition.

  • seazen

    I try to follow the logic of these polemics but get lost as they twist their way to some pre-determined conclusion. I gather that what we have is this "government" that has had some meetings and decided that it will generate money at the state and federal levels by having legislatures pass laws that it will then aggressively enforce. And part of the reason we have these laws is because a few private sector lawyers who make money taking other private sector participants to court have lobbied for them. If it were not for these money-making schemes, we wouldn't have laws because businesses never act in ways that are harmful to the society. Moreover, big banks would never act irresponsibly and drive the economy into a ditch through various forms of fraud and subterfuge because this powerful set of prosecutors would put them in jail instead of having to settle out of court. And we know full well that at the state level in places like Florida, business interests have no power whatsoever and are always being taken advantage of as laws and regulations are developed. Same in DC.

  • Joe Budd

    The very reason why Obamacare will fail (on purpose). Corporations will find it less costly to pay the penalty (tax) and avoid the risk of not complying with an extremely complex regulation. I've always said that legal defense is what should be nationalized not healthcare. Government creates laws and then forces me to have to defend myself.

  • Rasputin

    Seazen must live in some cozy little, silver-lined nanny basket, where he is shielded from all reality. Well, Seazen, I am here to crush your mal-formed system of denials. There are so many laws in the country at all levels of government—city, county, state, and federal– that no one has ever been able to accurately count all of them. The number of federal criminal laws in 2007 was 4,450. Estimates of the total number of federal civil and criminal laws and federal rules run as high as 300,000. The "U.S. Code of Laws" now runs 200,000 pages. As of 12/31/2011, NBC's NewsNation reported that 40,000 new laws went into effect across the U.S. starting the next day, 1/1/2012. Try adding some facts to your opinions Seazen, it would be refreshing.

    • seazen

      Nice numbers. Since that 40,000 number covers all city, county, state and Federal laws passed during the year do you have any idea what they mean or can you explain what they have to do with the original argument that laws and regulations are somehow created by "government" simply to raise money? The article, by the way, had zero facts so maybe you should direct your fact check there first.

  • MiddleMan

    I'm not convinced that you can blame this behavior on the left. This sort of thing has been going on for decades. OSHA and EPA have been at it for many, many years. You even see cities doing this sort of thing with speed traps, etc. It's not new and its not just the left that uses aggressive enforcement of the law to raise the revenue. It is just a really handy answer to short falls for government.

  • Carol Knighton

    I do agree with much of what Mr. Smith has to say. But I believe it's less of a conspiracy and more of a never-let-a-good-crisis-go-to-waste-wag-the-dog philosophy. I would so like to expose government bad behavior, but Idon't have the time or the research skills to do so. Does anyone know of a good website that shows this happening in the real world?

  • Rasputin

    @Middleman, the Left is the only political entity that truly gains from increased regulation and enhanced prosecutions that rake in huge fines for the government to use to build its own bureaucracy. You mention OSHA and EPA as 2 groups that have been doing this for years, and of course YOU MAKE MY POINT, in spades! There are few government programs that the Left is more in love with than OSHA and EPA, both of which are mind-melded big-time to the Left's political agenda.

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  • Bob A

    Government raping business to ensure no private job growth. Yet Obama says he wants to create jobs. Apparently lying is acceptible among negroes and white liberals!

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