Photo by Flickr user shyb used under a Creative Commons license.

With Congress unable to agree on a bill to extend operations of the Federal Aviation Administration, the agency has been partially shut down since last Friday. Numerous construction projects were halted, nearly 4,000 federal workers have been furloughed, and $200 million a week in aviation taxes are not being collected.

The situation is another unfortunate example of how gridlock in Washington is imperiling economic recovery. Yet it also serves as a useful natural experiment– one that contradicts an argument commonly used by opponents of taxes and government regulation.

Whenever a new regulation or tax on business is proposed, opponents are quick to argue that the costs will be passed on to consumers, especially when the industry in question is politically unpopular. The hope is that even though voters aren’t sympathetic to, for example, big banks, they will oppose new regulation to protect their own pocketbooks. Read the rest of this entry »

From time to time, we use the OK Policy blog to post submissions we receive from Oklahomans who have interesting perspectives on important policy issues for the state. This entry is from Adam Kupetsky, a resident of Tulsa .

Even after the worst financial crisis since the Great Depression almost sank us into a second Great Depression, some politicians still believe that “no regulation” is the answer.  Regardless of the industry concerned, politicians with lobbyists’ money in their pockets or ideologies to prove correct find reasons to oppose effective regulation and make it possible for free market excesses to reduce our confidence in the free market.

Opposition to regulation in any form is just as radical and crazy as a socialist’s complete opposition to the market.

The truth is that Americans want the market to be left alone when it works and for the government to step in and regulate when the market doesn’t work.  Health care is one example where the market has not worked completely and requires some government regulation of private insurance companies.  Absent some government regulation of health care, insurance companies have shown that they will not provide coverage to those with pre-existing conditions, will impose lifetime spending caps, will deny coverage to the sick and will keep prices unreasonably high. Read the rest of this entry »