Costs of A Regulatory Bell That Tolls for All. While the lucky may dodge direct regulation for a time, every company has business suppliers and business customers, and effects propagate sooner or later. Fixed, difficult-to-change regulations bind all of society—not just the target firm(s) and the market wealth-creating process—to suboptimal conditions. Eventually, given the interconnectedness of business (supply chains, business customer networks) the regulatory bell tolls for all, apart from other indirect effects of specific rules. Airline regulation affects companies other than airlines; pulling strings in one sector can entangle partners and other sectors, sideline entrepreneurship, and impoverish. At unpredictable times, it may become apparent that regulation affecting rivals will eventually boomerang, and that may be the impetus for reform.
Again, see part one of the two-part “Administrative Procedure Act Limitations” series on cost measurement and disclosure” here. Watch for updates of this “Rule of Flaw and Costs of Coercion” theme and the accompanying chart/outline. Time permitting, these will explore further undisclosed costs of regulation and intervention beyond APA operations.