Kevin Dong
Univ-112
12/5/14
Unit 3 Paper: Final Copy
The United States economy has recently suffered a devastating recession and has
been in a recovering state ever since. However, the recovery has been progressing very
slowly even with the new government administration under President Barack Obama. It
seems that even with all the new government policies passed in attempt to invigorate the
economy, the economy is still not in the state it was before the recession. The public
expressed their anger towards the government, but I do not believe it is entirely their
fault. Big Businesses, such as corporations, that play a huge role in shaping the economy
are allowed to freely chase their own objectives in the market instead of cooperating with
the government in stabilizing the economy. This is due to the flawed economic regulatory
system the government currently has in place, which does not allocate enough power to
the government to control the market. I believe that in order to bring the economy back to
a stable state, a new and stronger regulatory system must be created.
The current regulatory system employed by the United States government is
flawed due to its inability to control what large corporations are doing in the economy,
which in result damage small, local businesses. In an article by Brian Shaffer, he
discusses the different methods used by businesses in response to government regulation
(498). One method utilized by businesses is incorporating the use of political influence on
economic legislation passed by the government in order to side step government
regulations and gain a competitive edge in the market (498). The government can attempt
to pass new economic polices to stabilize the economy, but if these policies aid
corporations in gaining an advantage in the market then it will remain unbalanced. This
would lead to more economic disparity for local businesses, thus destroying the economy
of the communities where they reside.
The government is not regulating the economy in the correct way either. Big
businesses are allowed leeway to pursue their own goals because of the weak regulation
placed towards them meanwhile small businesses are given the burden of meeting
regulatory requirements. This is causing local economies to crumble and weaken. An
article on USA Today uses examples such as an local butcher shop shutting down to give
us an idea of what regulations are doing to small businesses (Keene). This misuse of
regulation will become a significant problem because it will rob the people the
opportunity to own their own business. The American dream is crumbling and the future
seems dim, as tyrannical corporations will eventually rule the economy if no action is
taken.
The solution to this economic problem is simple. The government must construct
a stricter and more effective regulatory system if they are to bring the economy back to a
stable state. Strict regulations on big businesses must be emphasized so the government
can increase its hold on the market. However, Public opinion is against the government
enacting more regulation because the misinformed believe that regulations harm the
market and hinder economic growth. This is not true. Statistics show that regulation
benefits outweigh the cost. An article on EPI.org reports that out of 106 regulations, the
benefits created were around 136-651 billion dollars and the costs centered around 44-62
billion dollars annually (Irons and Shapiro). Regulations are a positive force in the
economy.
The reason the economy is currently in poor shape is due to deregulation. If you
think about it, regulations are just like rules to keep us out of trouble. School rules bring
order to a mass of children in classes and allow the faculty to carry out academic
learning. This concept applies to regulations and the economy. Regulations allow the
economy to operate smoothly and prevent disasters from occurring. The government
before the recession believed that corporations could govern themselves and began
deregulating the market. Deregulation summed up by a quote “ stripped away key
safeguards which could have helped avoid the financial catastrophe” (Irons and Shapiro).
This move by the government allowed the effects of the housing bubble bursting to be
more devastating than it should have. The economy fell through and there was no bottom
filled with pillows to break its fall.
I believe I have developed the ideal solution to solve this regulatory problem. I
will break this into two parts. The first part of the solution is to enact a three-branched
regulatory system similar to the checks & balances of the United States government. The
branches each will play a role in governing the economy and setting up regulations. The
most important branch will create a regulatory code such as the Ten Commandments that
affect all businesses and the regulations cannot be broken. This allows the government to
draw a line where businesses cannot pass. The second branch of my system concentrates
on setting strict regulations specific to only big businesses which will keep them in check
and makes sure that while they pursue their own agenda, that they comply with the
government’s economic vision. It will still allow businesses the freedom to expand in the
market, but prevents their influence on economic legislature to effect the stability of the
market overall. The final branch will enact regulations that must be followed by small
businesses. These regulations will be more lenient towards them so that it will spurn the
growth of small businesses and local economies. Small businesses will comply with these
regulations until they have grown to the status of a big business. My solution allows
everyone a fair opportunity in the market because not one entity will be dominating the
market and government will have stronger hold of the economy so no one business can
gain too much of an advantage.
The second part of my two-part solution is to coordinate a system of governance
between government regulatory agencies and self-regulatory agencies. The system would
allow private self-regulatory agencies to act as an overseer in the market and govern on a
small scale. They would be given power to enforce and punish businesses for minor
transgressions against the regulatory code. If any major transgressions were made by a
business, the self-regulatory agency would make a report to the government because they
do not hold the power to punish on a larger scale. The government would review the
issue and decide what the just punishment would be for such a transgression. This will
allow a clear entity for enforcement to be created, which would save us resources because
we will not be deciding who will give out the punishment. The government now can
concentrate on major goals instead of wasting time dealing with minor issues.
For every problem there is always multiple answers to solve it. I believe my
solution is the best, but I will give examples of others to prove this. An obvious solution I
can think of would be to give the government full control of the economy and restore it
with their hands. I would argue against this solution because it is a totalitarian approach
to economics and it clashes with America’s idea of capitalism. We the people would
rather keep our economic rights and solve this issue without such drastic measures. It
would also seem skeptical that the American government known for its freedom would
be taking it away from its people. One solution that is mouthed by most misinformed
people seems to be reverting our economy back to a Laissez-faire system. I would
disagree on this choice as mentioned earlier that deregulation was one of the reason why
our economy took such a huge blow in the first place. It would lead to more chaos, as the
resource abundant corporations would be given the chance to monopolize and dominate
the economy without competition. My solution trumps its competition because of its
ability to provide fairness in the market while giving strong regulations to act as
safeguards for future issues.
Logically my solution has taken a safe and sound approach to this issue since it
does not bring a drastic change to the economy because the current system has everything
needed to solve this problem, but they are not being utilized in the correct way. Let us
reevaluate my solution in Sandelian ethics. Sandel believes that any solution to a problem
will fall into one of the three categories of ethics/justices, which are Welfare, Freedom,
and Virtue (6). He also believes that if a solution falls into one ethical category then it
will clash with at least one of the two other ethical ideas. Sandel uses an example of
sacrificing the life of an overweight man to save the lives of workers in the path of a
rolling cart (21-22). The concept of giving up individual freedom for the overall good of
the society completely describes how my solution works, just not as drastic. I emphasize
big businesses must give up a small amount of freedom for the good of the economy. For
such a tremendous gain, one must see that the small sacrifice made simply cannot
compete with the benefits we would all gain.
I believe my solution can flawlessly solve the economic issue if it were to be
utilized. My solution is logical and ethical because the sacrifices made simply does not
outweigh all the benefits we can gain. The economy can be brought back to its feet so our
nation can continue to prosper for the years to come. We can pass down the idea of the
American dream to the future generations.