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Lights Out on Regulatory Restraint

July 14, 2011 J

The U.S. House earlier this week botched an opportunity to roll back one of the most outrageous regulatory overreaches of recent years, when it voted 233 to 193 to keep new federal rules that will effectively ban the incandescent light bulb, in favor of more efficient (but much more expensive) alternatives.

The new rules were rammed through in 2007 with little real discussion and with bipartisan support. George W. Bush, not too surprisingly, signed them into law. It was a major coup for radical environmentalists, who want to force Americans to lead more environmentally-correct lifestyles, even if it means limiting consumer choices, and for the Dutch lighting giant Royal Philips Electronics, which lobbied hard for mandates it is well-positioned to cash-in on (more of the back story can be found here).
But as the new rules begin to grow teeth, and the true costs of a national light bulb retrofit become apparent, and consumers begin to realize that the federal government is taking away their right to choose on such matters, the public backlash is sure to build. It hasn’t peaked yet, judging from this vote. But the failure to restore consumer choice in light bulb selection, while disappointing, may have a decidedly different outcome a year or two from now, when the magnitude of this regulatory boondoggle becomes more apparent to more Americans. This is one small skirmish in what in time will become a full-scale war against arrogant (and expensive) Washington meddling in our lives.

Those backing the mandates even trotted-out some rather dim bulb distant relatives of Thomas Edison to lend their cause support — which undoubtedly would have the great inventor spinning in his grave. Edison didn’t rely on government mandates or government support to innovate and invent: he was a capitalist, and unapologetic about it, whose Menlo Park research was privately-funded, with an eye toward creating new markets, serving consumers and generating profits. And look at the blessings that brought the world.

Edison probably couldn’t have imagined that the company he founded, General Electric, would more than a century later become part of an unholy alliance between big business and big government, in with the former use the latter to mandate markets and pump-up profit margins with taxpayer subsidies. Edison did things the old way (and the right way), by taking personal risks and using privately-funding research to pursue profits in a free market. In contrast, critics say that today’s GE relies too much on “crony capitalism” and the political connections of its CEO, Obama pal Jeffrey Immelt, to game the system, guarantee profits and tilt the playing field in its favor.

Would Edison approve of today’s cozy symbiosis between big business and big government? That’s doubtful. He would more likely argue that consumers, not politicians and Washington lobbyists, should be the judge of whether his single greatest invention can still compete with newfangled upstarts. And he also would probably oppose handing out tax dollars and using government mandates to help companies with an alternative product – a product that some judge inferior, but which will cost Americans more – achieve a market monopoly.

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