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October 15th, 2009 1:51 pm
Too Big to Regulate
Posted by Print

I didn’t think I’d spend so much of this week blogging about the economics of professional football, but such is the gift bestowed this morning by my home state of California.

The Los Angeles Times carries a story today about the California State Senate’s vote to exempt a new football stadium in a Los Angeles suburb (intended to bring in a new NFL squad) from the state’s onerous environmental regulations.

On balance, this is probably a good thing. Most of California’s environmental regulations are designed to satisfy a radical environmental fringe and enrich attorneys. Obviously, there is a need for some measure of regulation, but California has probably exceeded that threshold by a factor of 10.

What’s troubling about this is how much it reveals about the politics of dysfunctional regulation. The Golden State went through a similar process 15 years ago, when it waived the regulatory process to rebuild Southern California’s devastated freeway system in the aftermath of the Northridge Earthquake. The result? A repair effort that was supposed to take 26 months was completed in 66 days.

In California, as in the rest of the country, we tolerate government incompetence as long as we don’t see it. The freeway system and the effort to end L.A.’s continued pro football drought have practical and emotional resonance. In the case of the NFL, there are also a lot of well-heeled interests backing the cause. But in a state with double-digit unemployment and massive budget deficits, wouldn’t it make just as much sense to relieve the regulatory burden on the millions of everyday Californians who — through the aggregation of their enterprise — provide the backbone of the state’s economy? If this scale of regulation is intolerable for huge corporations, why is it an acceptable burden on small business?

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