A tough liability system does more than provide compensation for serious harms after the fact. It also sorts out the wheat from the chaff—so that in this case companies with weak safety profiles don’t get within a mile of an oil derrick. Solid insurance underwriting is likely to do a better job in pricing risk than any program of direct government oversight. Only strong players, highly incentivized and fully bonded, need apply for a permit to operate.

In an environment of unlimited liabilities for harmful externalities, insurance would be a must, and insurance companies will be far better regulators than the government.  After all, the government employee gets paid the same amount of money with the same amount of (never-ending) job security whether he actually assesses risk correctly or not.  The insurance company?  One wrong risk assessment, and it’s in the breadline.

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Be proud, small-business owners! You’re now the most trusted group in America. Listen up, federal government! You’re neglecting small business — and most people think so.

According to the just-released study by the highly respected Pew Research Center, small business is the most trusted institution in America. More than churches. More than colleges. More than technology companies. And certainly more than labor unions or large corporations.

However, that little part of the federal government neglecting us . . . we can take care of ourselves, thanks.  Just stop giving away our money to your corporate cronies, your dirty banksters, your union thugs and your GSEs.  And get out of our way.

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Tim Carney’s book Obamanomics does a great job spelling out how and why. We highly recommend this book to you.  Carney also spoke on a Cato panel about his findings. The video of his speech is at fora.tv – definitely worth the watch.

If you think that the current Goldman Sachs SEC probe is a sign of Big Government taking on Big Business, then I’ve got some beachfront land in Iowa to sell you.  Goldman will get a “slap on the wrist” (if anything at all, since it looks like the charges are extremely overblown and may be without merit) while – wink wink – the resulting financial regulation encouraged by their public castigation will ensure that the new and onerous compliance costs hurt Goldman’s smaller competitors.

Big Government gets more power, Big Business gets less competition from smaller competitors.

It’s a familiar story.  Watch it unfold, yet again, in the coming months and years.

Read that Carney book.  Free your mind.

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