How Regulation Really Works

In the media's fantasy land of candy cane forests and soda pop oceans regulations are rationally implemented by dispassionate, far seeing public servants. The truth is they are usually implemented at the behest of market leading companies seeking to suppress smaller, more creative competitors. A good example here.

Mark Ernst, in December 2007, was chief executive officer of H&R Block, the nation's largest tax-preparation company. Thirteen months later, once President Obama took office, Ernst was named a deputy commissioner at the Internal Revenue Service, where he would spend his first year drafting new regulations for tax preparers--regulations that H&R Block welcomes and market analysts say will benefit the company.

With Ernst in mind, recall Barack Obama's campaign pledge: "No political appointees in an Obama administration will be permitted to work on regulations or contracts directly and substantially related to their prior employer for two years."