Gibson Guitar and the Regulatory Speed Trap

DrRich | September 19th, 2011 - 6:25 am

Podcast:

A couple of weeks ago, a swarm of Federal agents from the Fish and Wildlife Service, armed with automatic weapons, suddenly raided the Gibson Guitar Company and confiscated raw materials and finished guitars, apparently because Gibson allegedly violated the Lacey Act in their importation of exotic wood.  Spokespersons from Gibson insist that they purchased the wood legally, that the sale was approved by Indian authorities, and that they have the paperwork to prove it.

To DrRich, the interesting aspects of this episode are: a} The Jobs! Jobs! Jobs! Obama administration is happy to raid and disable a business – a manufacturing business at that – that has been hiring Americans, in order to enforce murky, difficult-to-interpret laws which require Americans to comply with even more difficult-to-interpret and even murkier laws in foreign lands. b) The administration is willing to enforce such laws in such a way as to induce maximum intimidation. And c), they are willing to do so selectively. (Several guitar companies, which have not been raided, also import the same wood from the same sources.)

DrRich stipulates that neither he – nor anyone else – knows all the facts of this case, and that perhaps Gibson really is guilty of imperfect compliance with the Lacey Act.  However, from what is known publicly, even if this were true, this episode would appear to be a case of selective enforcement. DrRich does not know whether the Administration would pick on Gibson because its CEO is a well-known Republican, or to teach a lesson to the people of Tennessee because at least one of their Senators has been seen consorting with the Tea Party, or because Gibson is non-unionized, or for some other reason.

The current version of the Lacey Act was arguably promulgated for good reasons, aimed as it was, ostensibly at least, at protecting rare species. But full compliance with the Lacey Act requires companies to document they are in full compliance with changeable, obscure and opaque laws in foreign lands, and in a fundmental sense is impracticable. America has many laws, rules, regulations, and guidelines that are just like this – for which it is, for all practical purposes, impossible to be in full compliance.

Such laws and regulations are very useful to the government, because it allows them to declare, at a time of their choosing, almost anyone who is functioning under those laws to be criminals. If Americans understand that the only thing standing between them and a raid by Federal agents armed with automatic weapons is the pleasure of the Central Authority, then smart Americans will do whatever they can to curry that pleasure.

DrRich calls it the Regulatory Speed Trap. The Regulatory Speed Trap can be recognized by its typical 5-step pattern;

1) Over a long period of time, regulators will promulgate a confusing array of disparate, vague, poorly worded, obscure and mutually incompatible rules, regulations and guidelines.
2) Individuals or companies which need to provide their products or services despite such hard-to-interpret regulations, will necessarily render their own interpretations (usually with the assitance of attorneys, consultants, and the regulators themselves), and will act according to those interpretations.
3) By their apparent concurrence with, or at least by their failure to object to, such interpretations of the rules, the regulators over time allow de facto standards of behavior to become established.
4) When it becomes to their advantage, the regulators will reinterpret the ambiguous regulations in such a way that the formerly tolerated de facto standards suddenly become grievous violations.
5) Regulators aggressively, but selectively, prosecute newly felonious providers of products or services.

Basic to the Regulatory Speed Trap is an underlying set of complicated and contradictory rules and regulations. In most instances, such as with the Medicare regulations that have evolved over the past several decades, the complexity and self-contradictions grow almost organically over time, and are not planned in any way.  In other instances – such as with the Lacey Act – some new regulations that cannot be complied with are created de novo. And in yet other circumstances – such as the Obamacare legislation or the Dodd-Frank legislation – an entire, massive, tangled web of impossible regulations is painstakingly created out of whole cloth. (This is likely why it is taking so long to render each of these new laws into their hundreds of thousands of pages of regulations.)

It is a rule of nature that bureaucracies evolve away from clarity and toward maximum complexity. But the resultant regulatory morass does not necessarily have to produce fatal paralysis. Societies have thrived for long periods of time despite such bureaucratic complexity. (The Byzantine Empire for instance, whose very name came to symbolize the bureaucratic tangle, lasted for a thousand years.) These societies have thrived, however, only because bureaucrats have allowed de facto interpretations and standards of behavior to develop under their watchful eyes. This sort of benign oversight permits societal commerce to continue to function within some reasonable bounds.

But the modus operendi of our Progressive leaders – in their perpetual attempt to establish the perfect society – is to control “everything” from the top down. And what they have discovered, to their unending delight, is that in a mature bureaucracy – one that has found a way to function despite a tangle of vague and contradictory regulations – is that Everyone Is Always Guilty Of Something.

And if everyone is always guilty of something, then the judicious use of the Regulatory Speed Trap, which is to say, the selective enforcement of inherently ambiguous regulations, becomes a useful tool for achieving Social Justice. By such selective enforcement they can punish their enemies (the enemies of the Progressive Program), reward their friends, and press their own agenda as they see fit.

This, DrRich submits, is what we see happening today to the Gibson Guitar Company, and for that matter, to Boeing.

Less obvious to the average citizen, but very obvious to individuals and organizations working within it, is that the same thing holds for the American healthcare system. Even before all the Obamacare regulations are published, the morass of already-existing rules, regulations and “guidelines” means that, at any given time, the Central Authority can suddenly construe some rule in such a way that virtually any worker or any institution dealing with the healthcare system becomes a criminal. The Central Authority has already exercised its awesome and arbitrary power to do so, in selected and circumscribed cases, and to good effect. Today, healthcare workers and institutions – and especially the medical profession – know that staying on the good side of the Feds is Job One.

Which means that doing what’s best for your patient can be no higher than Job Two*. It is not only “ethical” to act for the good of the collective instead of the individual patient, it is also the only way to optimize your chances of staying on the right side of the law – whichever law, that is, the Feds choose to reinterpret at any given time.

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*For doctors, doing what’s best for patients is actually Job Three. The top priority is maintaining your professional viability (by keeping the Feds happy); the second priority is protecting your turf against encroaching physicians from other specialties; and the third priority is the patients. This order of priorities does not mean that doctors are evil; if they ignore the first two priorities, they will not be able to do anything at all for their patients.
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Most doctors are very smart and can adjust to these or any other rules of engagement. It is the patients who are well and truly screwed by the Regulatory Speed Trap.

10 Responses to “Gibson Guitar and the Regulatory Speed Trap”

  1. FWM says:

    O/T: Dr. Rich will be pleased that the ACP is now codifying covert rationing as the seventh of the competencies to be essential to Internal Medicine Residency training. To Wit:

    (Abstract)

    “There is general agreement that the U.S. economy cannot sustain the staggering economic burden imposed by the current and projected costs of health care. Whereas governmental approaches are focused primarily on decreasing spending for medical care, it is the responsibility of the medical profession to become cost-conscious and decrease unnecessary care that does not benefit patients but represents a substantial percentage of health care costs. At present, the 6 general competencies of the Accreditation Council for Graduate Medical Education (ACGME) and the American Board of Medical Specialties (ABMS) that drive residency training place relatively little emphasis on residents’ understanding of the need for stewardship of resources or for practicing in a cost-conscious fashion. Given the importance in today’s health care system, the author proposes that cost-consciousness and stewardship of resources be elevated by the ACGME and the ABMS to the level of a new, seventh general competency. This will hopefully provide the necessary impetus to change the culture of the training environment and the practice patterns of both residents and their supervising faculty.”

    ANNALS OF INT. MED; September 20, 2011 vol. 155 no. 6 386-388.

    Your a man before your time, if it is any consolation.

    Mike

  2. Matt says:

    So, just to summarize: first we destroy the natural checks and balances that would otherwise put downward pressures on costs by creating a universal 3rd party payer system, then we demand that the providers, not the consumers (as it is in all other markets) must now become the source of cost-consciousness in health care, out of the goodness of their hearts.

    We have seen how well this works, as health care remains one of the few industries that continues to be more expensive over time for the same level of service (much like the post office, which — as it happens — is also run by a 3rd party). In all other fields, with the simple checks and balances of the market, more services have become available for less money over time. But medicine, we are told, is different. It could never work. Never mind that the path we are taking doesn’t work, and has never worked, we are damn sure that what works for all other markets couldn’t possibly work in medicine…because…well, I said so.

    • DrRich says:

      Matt,

      You are absolutely right. Those aspects of medical care that are not under the Federal cost control structure (e.g., Lasik, Botox) have behaved like any other consumer product, and have become much cheaper. (By the way, you have an interesting blog.)

      Rich

  3. pj says:

    The “Regulatory Speed Trap” is precisely what occured in Mammography accreditation/ (thank you GHW Bush) MQSA in 1995. I would only add that the provider was required to hire a FTE to keep up with the inane paperwork and had to pay for the priviledge of being “inspected”– ($1200/ yr)the “inspections” based upon the flimsiest science and worst inspection practices. (and you thought it couldn’t happen to you—surprise!)

  4. pj says:

    The “Regulatory Speed Trap” is precisely what occured in Mammography accreditation/ (thank you GHW Bush) MQSA in 1992. I would only add that the provider was required to hire a FTE to keep up with the inane paperwork and had to pay for the priviledge of being “inspected”– ($1200/ yr) the “inspections” based upon the flimsiest science and worst inspection practices. (and you thought it couldn’t happen to you—surprise!)

    • DrRich says:

      pj,

      The RST is bipartisan. While Progressives use it to further the cause of Social Justice, all political persuasions will use it to demonstrate they are serious about rooting out “fraud and abuse.” Since we are all guilty of something, we are all potential victims of the RST. And when it is used against us to root out fraud, we can expect no sympathy or understanding from anyone when the RST is sprung on us.

      Rich

      • pj says:

        Thank you for raising the bar in medical blogging and tackling the “uncomfortable” truths about the increasingly difficult (toxic) environment in which physicians attempt to make an honest living.

  5. pj says:

    re: the “RST is bipartisan”:
    I give you full credit for exposing the philosphical underpinnigs of RST and other anti-physician oppression some time ago when you exposed the FTC Anti-Trust laws against physicians negotiating with health insurance companies, except based upon ever declining Medicare reimbursement rates– (also dating back to the G H W Bush era). The RST is not only a “fraud and abuse” bludgeon but has also served as the basis for the “quality”/”accreditation” protection racket industry which is yet another exploitation device aimed at extracting hard earned money from physcian practices for access to ins plan providership.

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