- Regulatory Diminishing Returns

You’ll frequently find me saying that because they contribute nothing to the cumulative wealth of America, those in government don’t “make” anything, but that’s not exactly true. What they do make, and they make them in abundance, is rules. They make simple rules, complex rules, and rules which simultaneously contradict each other. Sometimes they make rules and then craft ‘exceptions’ to them, to make sure the rules don’t harm their political allies as much as their enemies.

But eventually you hit a point of diminishing returns where rules are concerned. The bureaucracy loves self-perpetuation, but regulatory overreach has consequences which can be measured concretely. As an example, the Obama administration has so intruded into the economic freedom of Americans, that the unemployment has stagnated above 9%. No one is willing to take a risk on new hiring when Washington is likely to change the terms of the employment contract after the fact. Government will add new healthcare costs, new compliance costs, and other new mandatory payments and fees, all at their whim. So instead, businesses are learning to make do with what they have, and hiring new staff only as an absolute last resort.

Anyway – like any idea, adding new regulation will eventually be taken too far, and you’ll know that it’s reached that point when it falls apart due to the common human failings of those who try to enforce them. When the law becomes impossible to obey, then everyone will simply be a criminal. But even before that, the bureaucracy will grow so rapidly that the standards will have to be lowered in order to have the staffing to attempt enforcement. That’s a common point of diminishing returns. When you’re hiring people who don’t understand anything about banking to run and regulate banks for instance, then the bureaucracy has become too big and should be shut down, it’s staffing slashed, and its bureaucratic rules greatly simplified.

The story of operation “fast and furious’, the ATF's monumentally botched ‘gunrunning’ investigation, reveals the kind of self glorifying tactics of a bureaucracy in the choke hold of vast regulatory overreach. Their incompetent leadership, rather than addressing the small crimes that were perfectly within their charter, instead decided to enable the Mexican border gangs. And in the process they cost several Americans their lives. The media bias against firearms ownership is trying to frame this as a case where more regulation (or at least more regulation enforcement) would have been a help. But it’s really a case of the guard dogs importing criminals, so they could be viewed as heroes by saving us from them.

Read some of the commentary from ATF officials and this becomes clear:

"Both line agents and gun dealers who co-operated with the ATF repeatedly expressed concerns", about the operation, the report says. "But ATF supervisors did not heed those warnings. Instead, they told agents to follow orders because this was sanctioned from above."

In total, agents watched at least 1,730 guns flood on to the black market, knowing they would be used to commit murders and other violent crimes. Their concerns about the policy were ignored. In one email to field staff printed in the report, ATF supervisor David Voth suggested that staff who objected to his orders would be fired.
"I will be damned if this case is going to suffer due to petty arguing, rumours, or other adolescent behavior," he wrote. "We are all adults, we are all professionals, and we have an exciting opportunity to use the biggest tool in our law-enforcement tool box. If you don't think this is fun, you are in the wrong line of work, period!"

John Dodson, a special agent from Phoenix who eventually blew the whistle on the "flawed" operation, told congressmen his superiors would be "giddy" with delight when "their" guns were found at a crime scene in Mexico, because they believed it "validated" their tactic. With regard to potential loss of life, an ATF boss told him: "if you are going to make an omelette, you need to scramble some eggs."

And the subsequent attempted cover-up supports that view:

Rather than admit to any mistake, the ATF embarked on a cover-up. William Newell, the special agent in charge of the operation, ordered the arrest of 20 of the people agents had been watching buy weapons for months. Then, although not one senior cartel member was arrested, he held a press conference declaring the operation a success.

Newell was then asked if any weapons had been deliberately allowed to end up in the hands of criminals. He replied, "Hell no!" The report describes that statement as untrue and "shocking." It alleges that the Department of Justice continued to attempt a cover-up for several months.

The media view will be that we should have more gun laws and more ways in which we restrict the rights of the law abiding. But that view can only be taken if you intentionally misunderstand the problem. The law abiding firearms community isn’t guilty of anything in this case. The Mexican gangs are, and the ATF is. So we shouldn’t punish the law abiding firearms community for their misdeads.

What we really need to do is recognize that this was a department that had grown so large and so powerful that it needed to invent crimes to solve. And it should serve as a warning to the regulation-happy Democrats in Washington. If we're not careful all the other bureaucracies that are being expanded under Obama will end up with the same level of incompetence, arrogance and ineptitude as the ATF.

Sometimes it's simply better to assume that government can't do something, than to empower it arbitrarily and hope that it remains competent.