Regulation play.

• Author: Gearino, G.D.
• Position: FINEPRINT

If anyone decides to compile a list of the most unsettling sentences ever found in a news report, I'll nominate this candidate, culled from my local daily newspaper a few weeks ago: "A battle is shaping up over 101 new hospital beds that state regulators say are needed to meet the surging demand for health care in Wake County." Who knew that through those 27 simple words the unhappy state of our modern regulatory apparatus could be unwittingly revealed?

There are people, of course, who believe there is not enough regulation in life, that all economic ills could be cured by imposing more rules and exercising more oversight upon the business world. The problem with that belief is that it runs contrary to everything we know about human behavior. After all, we've been refining, updating and expanding history's most famous set of formal regulations--the Ten Commandments--for thousands of years. In hindsight, it's all been for naught. Can anyone make the case that we've eliminated, or even significantly reduced, adultery, theft, murder, idol worship and taking that name in vain during the millennia since Moses brought the tablets down the mountain?

But belief in the power of regulation is hard to shake. That's how we find ourselves at a moment in time when anonymous state bureaucrats can claim to know the exact number of hospital beds fast-growing greater Raleigh will need in the future. Ninety-eight will be too few; 103 will be too many. We'll need exactly, specifically, precisely 101 of them.

Lest you lump me in with the crowd of hard-core regulation haters, please understand that I think some (and maybe even most) regulatory agencies have a place in the world. I'll go even further and say that most regulators, if given the flexibility to exercise judgment, probably would turn out to have good sense. Problem is, what once was a clear line separating the regulated from the regulators is now blurred. The federal government is both a securities regulator (through the Securities and Exchange Commission) and an investor in a global public company (General Motors Corp.)--which issues securities. Similarly, the government was an investor in hundreds of banking companies, through the Troubled Asset Relief Program, and a regulator of the banking industry by way of the SEC, Federal Deposit Insurance Corp., Office of Thrift Supervision and the Federal Reserve. Needless to say, you shouldn't be an investor and a regulator. When it comes to the medical...