Home > Solution-Problem, The Outsiders > Tim Carney on the false frame of regulation vs. inequality

Tim Carney on the false frame of regulation vs. inequality

The news and the punditry tends to put out a constant stream of logical fallacies, which are easy to spot if you know what you are looking for.  However, I have to assume that many – if not most – people just lap it up, because otherwise, why would they continue unabated?

One of the latest examples is a logical fallacy called the “false dichotomy” or the “false dilemma.” Briefly, only two possible options are considered when multiple options across a spectrum may be available.  For example, if I were to say “the weather will not get any warmer tomorrow, so it must get cooler,” I have committed this fallacy by ignoring the possibility that the weather may stay exactly the same.

Tim Carney over at the Washington Examiner examines a false dichotomy in a post called “The false frame of regulation vs. inequality.” The false dichotomy posited  here is the idea that either regulation will increase or inequality will increase.  Of course, it may be true that they are positively correlated (no causation), or it may be true that an increase in regulation will cause an increase in inequality.

This is the option I find more convincing.  Tim Carney expands on this idea:

That naive-liberal postulate is false, and I suspect many of those polled don’t share it. I think when people say the economy is rigged for the rich, they are pointing, at least in part, at things like bailouts, subsidies, and other murky advantages gained by lobbying and cronyism. I notice that while the Post didn’t give it as an option, still 5 percent said that overregulation and inequality were equally bad.

Off the top of my head I can think of a few overregulations that unfairly favor the wealthy: crackdowns on food trucks in favor of restaurants, regulations blocking people from selling home-baked goods, online gaming regulation favoring big casinos, regulations keeping women from doing hair-braiding for money, and a bunch more. If you expand the notion of “regulation” slightly to include mandates, a skewed tax code, and wealth transfers, there’s plenty of evidence that our inequality stems in part from too much — not too little — government.

I have been banging on this drum for awhile on this blog.  Regulation offers false hope, since corruption, exploitation, and theft tend to calcify around the edges of the regulation.  The solution proffered by Washington is then, inevitably, more regulation.  The cycle repeats.

The real estate bubble, collapse, and bailout is the archetypal example.  People are justly outraged that everyone – everyone – in power whose hands were dirty walked away rich, in both the government and the private sector.  Only the innocents who paid their taxes were stuck with the bill.  Clearly, the regulation in this case contributed to inequality.  No serious person would argue that it did not, unless they had an agenda other than the facts.

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