Consumers vs. Corporations, Who Wins With Lower Regulations?
It’s no secret that President Trump sees government regulations as the enemy of business. On the campaign trail he regularly hammered government imposed constraints as expensive, unnecessary, and part of the reason companies fail, or fail to grow. Now that he’s officially taken office, we can begin to sort out the campaign rhetoric from Trump’s true intentions—and there doesn’t seem to be much difference.
“I will ask each and every federal agency to prepare a list of all of the regulations they impose on Americans which are not necessary, do not improve public safety, and which needlessly kill jobs. Those regulations will be eliminated.” — President Donald Trump
He has already taken aim at the FDA, stating that farmers and food companies have to deal with too many safety regulations governing everything from food temperatures and soil contamination levels to “inspection overkill.” While there’s no question that food safety regulations do encumber efficiency and profit margins for farmers and businesses, it’s important to remember that they are in place to protect consumers.
According to the CDC, each year roughly 1 in 6 Americans (or 48 million people) gets sick, 128,000 are hospitalized, and 3,000 die of foodborne diseases. In 2010 we saw a salmonella outbreak linked to peanuts that caused over 700 people across 46 states to get sick, and resulted in 9 deaths. This incident also marks the first federal felony conviction for a company executive in a food safety case. Stewart Parnell and Michael Parnell, were charged with 76 federal counts linked to intentionally shipping out salmonella-laced peanut products. This may not have happened if stricter regulations had been in place at the time.
But consumer protections are not limited to food safety. There are just as many regulations governing drugs, medical devices and products—including what chemicals are banned from products, and how age appropriateness and warning labels are determined. These constraints are not meant to help business, so the complaint that they hurt profits and growth is not surprising. It may be true that businesses could potentially grow more quickly without oversight, but as a result of deregulation, consumers would get the short end of the stick.
Safety risks aside, government laws are also designed to protect consumers’ legal rights by allowing them to seek damages from companies and manufacturers selling products that have caused them harm. It’s the ability for consumers to sue large corporations that forces them to add warning labels to seriously harmful products. Fines don’t mean much to billion dollar companies, but a public lawsuit resulting in hundreds of millions in damages can be enough to force action.The most powerful examples include asbestos, once touted as a miracle material, now the subject of lawsuits linking it to a deadly form of lung cancer called
Mesothelioma. Then, the tobacco industry refused to admit that smoking caused lung cancer for decades. Even though the first studies suggesting a link between tobacco and lung cancer emerged in 1950, it took over 33 years for the first lawsuit to be filed, and another decade before any damages were awarded.
We’re now seeing an eerily similar situation unfold with the possible connection between talcum powder and ovarian cancer. Evidence has been around since the early 1970’s, and yet the first guilty verdict was only handed out to Johnson and Johnson in 2013. Three more talc lawsuit victories followed in 2016, resulting in over $200 million in damages to be paid by J&J.
These are the protections that have been built for consumers. Government regulations are a safety net to keep corporations in check, and they provide people with a means to force compliance when companies put profits before safety. But safety isn’t the whole picture. While deregulation would most likely result in a rise in injuries and deaths from products, the greater risk would be removing consumers’ rights to sue, and this is a real possibility under Trump’s watch. Thankfully, there are checks and balances in the government that will most likely stand in opposition to anything that drastic.