Norm Ornstein on the need for regulations

In an earlier posting on regulations, I talked about the Agricultural Department’s Food Safety and Inspection Service implementing a new program on regulating mobile slaughter facilities. This was note worth because, as the Ag Department noted, “approval of a mobile slaughter facility required a great deal of stakeholder involvement, creative thinking, and problem solving.” Thus it was an example of new smart regulations.
In that piece I tossed out as an aside that “No one would want slaughter houses to be deregulated — for obvious reasons of public health.” Turns out, that is not the case. Recently, the House passed a farm bill that cuts food safety funding, arguing that safety in the food supply is self-regulated (i.e. the private sector can handle this just fine without government intervention).
Norm Ornstein of the American Enterprise Institute has written a piece on how foolish these cuts are (Mindless Cuts Can Have Dangerous Results). In it he details what the consequences of the cuts might be.

. . . the cuts in meat inspection would mean serious furloughs among meat inspectors and their support staff, who account for more than 90 percent of the agency budget.
That in turn could be extrapolated to mean about a million pounds of tainted meat and poultry being put on the shelves in supermarkets and butcher shops and on the menu in restaurants.
Given the statistics we have on the number of foodborne illnesses that hit Americans each year–48 million–that result in 128,000 hospitalized and 3,000 killed, those cuts would surely mean more hospitalizations and more deaths.
Cuts in the FDA mean fewer inspections of plants in China that provide food additives, many of which have included toxic substances.
Cuts in the CDC mean a lesser capacity to deal with an epidemic if and when one arises.

He dismisses the argument made during the House debate that the private sector is already handling this because of fear of lawsuits:

Of course, no food supplier wants to get sued. But if the private sector could self-manage this problem, we would not have seen the meat inspectors pull 9 million pounds of tainted meat and poultry from the system last year.

Parenthetically, I have to say I found the argument about how we can rely on the private lawsuit to protect the food supply especially ironic coming from a group of policymakers who are dedicated to the principle of reigning in private lawsuits (aka tort reform).
Ornstein goes on to note:

Whether it is offshore drilling, building construction, airline travel or sausage production, stuff happens and corners are cut to reduce costs or make bigger profits. Independent inspections are mandatory. Regulators can be captured by interests, as happened for decades at the Interior Department when it comes to oil drilling, or can be slothful or inefficient. But they are necessary for both public safety and public confidence.

And I would point out, regulations can be spurs to innovation — as companies use them to create innovative processes and/or use compliance with the regulation to build brand reputation. So in this new rush to deregulate, I how we don’t end up making matters worse — not only jeopardizing health and safety, but in the name of economics worsen our innovative economy.

3 thoughts on “Norm Ornstein on the need for regulations”

  1. Good question — and opens up a whole other conversation on labels, vocabulary, definitions and taxonomies. I often use both terms interchangeably and I probably shouldn’t. However, I don’t think that state-of-the-art in the field has yet coalesced around one specific way of differentiating between the terms. So for now, please pardon my definitional ambiguity.


  2. I’ll introduce a third phrase: intangible capital. The technical meaning is the same as intellectual capital (human + structural + relationship capital) but it avoids the misunderstandings that arise out of the word intellectual:
    -people immediately think of intellectual property and miss the point of the broad reach of IC
    -also, intellectual makes it sound like the knowledge has to be high-end when the real power of IC is that the everyday shared knowledge of an organization has power
    Why not intangible assets? IC is clearly an asset. But, in my experience, this phrase takes people immediately to the definitions used by accountants. Since accountants can only explain a small percentage of the value of companies today, that can be a dangerous track to take.
    If you are interested in this vocabulary dilemma, join us at We are getting ready to start a wiki for the IC field.


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