'Pigs Is Pigs,' but don't blame rules for problems

The New York Times buried a good story this week about a fundamental shift in government under the Obama administration - an article that, strangely enough, brought to mind a favorite story from my childhood, "Pigs Is Pigs."  I'll explain in a moment.

The Times' story ("Surge of New Rules Show Regulation Is Back") cited new rules "to protect Americans from tainted eggs, safeguard construction workers from crane accidents, prevent injuries from baby walkers and even protect polar bears from extinction," and said the administration was also stepping up enforcement.  One example: The Food and Drug Administration, down to 1,309 inspectors nationwide in fiscal 2007, now has 1,800 inspectors "with 150 more on the way."

The Philadelphia area may be witnessing some of the fruits of that nearly 40 percent increase - or suffering from the fallout, depending on your point of view. The recent massive recall of all children's versions of Tylenol, Motrin, Benadryl and Zyrtec by McNeil Consumer Healthcare was apparently the result of a sharply critical April inspection of the company's Fort Washington plant - an inspection accelerated because of a recall last fall connected to problems at a McNeil plant in Puerto Rico. (You can read my recent column about the recalls of McNeil's long-trusted children's products here.)

The Times' story discusses the philosophical divide underlying the shift, calling the break with the Bush administration

... an intentionally sharp one. While the Bush administration mostly favored voluntary compliance by industry, senior Obama administration officials argue that carefully crafted regulation can be a positive force.

By contrast, it says, conservative critics accuse the administration of "creating a big-government nanny state that threatens the nation’s global competitiveness." One example it cites: the CPSC's efforts to enforce a ban on lead in children's toys.

The big picture here is the fascinating philosophical and practical debate that has hung for decades over government rules. I've never quite understood why the laissez-faire attitude swept so effectively through the Republican party in the post-Reagan period after consumer and environmental regulation enjoyed an era of bipartisan support.  The Environmental Protection Agency and Consumer Product Safety Commission, for example, were both born during Richard Nixon's presidency.

The usual explanation is that Republican conservatives, following Reagan's lead, see government as the enemy - and have been supported in that framing by businesses and research-and-advocacy groups they began funding in the 1970s.  As Reagan famously said, "Government is not a solution to our problem, government is the problem." Reagan was so effective that Democrats since Bill Clinton have at least paid lip-service to the same idea. Clinton's famous statement was: "The era of big government is over."

Of course, it's never been that simple. Clinton's oft-quoted line, during his 1996 State of the Union speech, was followed immediately by, "But we cannot go back to the time when our citizens were left to fend for themselves." 

The financial collapse has brought one facet of this debate into sharp relief: As we all know by now, or should know, the finance industry deftly supported many Democrats as well as Republicans, and letting our citizens "fend for themselves" is pretty much what happened in the ensuing years, especially when it came to financial products such as mortgages and credit cards. Under the sway of market fundamentalists such as Alan Greenspan, the market was assumed to be self-correcting, and consumers were left facing an array of confusing and sometimes predatory choices. The debate underway now in Congress is also about the financial risks facing huge institutions - and the dangers to taxpayers - because we let some grow too big and too complex to fail. But the proposed Consumer Financial Protection Agency is an essential part of reform because consumers, unlike the big banks, don't have armies of lawyers to protect their interests.

Still, the larger debate over rules and government's role will outlast the fight over financial reform, and perhaps should overshadow it because it touches on so many aspects of our lives: the safety of the foods we eat and the cars we drive; the health of the environment we all share; the functioning of consumer markets that can bring the benefits of genuine competition or the harm of monopolies or oligopolies. 

The conventional wisdom is that we tend to swing back and forth over time, as we try to find the right balance between too much regulation and too little. But the latest strands of this debate reminded me of how distrust of bureaucracy and rules is so deeply embedded in our culture that I still recall "Pigs Is Pigs," even though I probably last heard the story when it was read to me in second grade. (Full disclosure: My recollection of the Ellis Parker Butler story is now Wikipedia-enhanced, and I realize now that it's not entirely politically correct - there's a casual and regrettable slur about the guinea pigs that are the "pigs" of the title.)

In the story, railway agent Mike Flannery plays the consummate bureaucrat: He handles a shipment of two guinea pigs, but won't let them go until he's been paid a higher freight charge than the customer believes is warranted. The customer wants the lower "pet rate," but Flannery wants to charge the higher "livestock rate" because, well, "Pigs is pigs." (Of course, while all this bickering is going on, the guinea pigs are doing what males and females of any species do, reproducing, so pretty soon his station is overflowing with guinea pigs.)

Anyone who's ever battled a bureaucrat, or even just stood in frustration in a needlessly long Post Office line, knows how these stories feed the common wisdom that bureaucrats and rulebooks are inefficient, and that we need the discipline of the market to make things work.

Of course, the truth, as always, is more complicated. The fictional Mike Flannery worked for a railroad - in that era a private corporation. If he illustrated anything, it was probably more that any person with power needs to use it smartly.

We've seen plenty of bad consequences from the anti-regulatory fervor of the Reagan, Clinton and Bush eras. The Obama administration is wisely pushing in the opposite direction while trying to ensure that it still promotes private investment and competition.

It's a good time to remember what I learned - on nearly 50 years' reflection - from "Pigs Is Pigs": The problem isn't rules or bureaucrats. Nor is it government, any more than it's business. It's that making rules wisely, and enforcing them effectively, is a constant challenge, even to those with the best intentions.