The Republican Party has ong been an opponent of overregulation, and rightly so. But I believe some people in my part are overly fond of bashing regulation as the constant enemy of growth and competition. They are certainly right about some regulations, but there are wrong when it comes to others. The rule of law and the establishment of regulations that are clear, fair, and relevant to contemporary circumstances provide the predictability and stability that is needed for investment and risk-taking.
Back when I was at Bain Capital, one of our first venture capital investments was in a technology that allowed machining companies to reuse their cutting oil--the cooling lubricants that are used in drilling, routing, and cutting metals. New government regulations had just been established to prevent companies from simply throwing used oils down the drain. The regulations ultimately led to better machining industry practices, but because they weren't enforced for almost a decade, we lost our investment. Michael Porter is convinced that, far from being a drag on the economy, "National advantage is enhanced by stringent standards that are rapidly, efficiently, and consistently applied." I wish more Republicans and Democrats alike understood that important fact. [emphasis his]It looks like Mitt is two for two thus far on the economy this week. While some regulations needlessly distort markets, others rightfully force our companies to innovate, which results not only in a cleaner and safer planet, but also one in which American firms can compete with those abroad. One of these days I'll post something he gets wrong regarding the economy, but for now I'm not seeing it.