Similarly, the Occupational Safety and Health Administration's controversial new ergonomics regulations will divert billions of dollars into redesigning work spaces and buying new equipment. If the law requires people to worry about ergonomics instead of sales or service, they will do so, but productivity will inevitably be hurt. Year-end wrangling between Congress and the White House has blocked the latest minimum wage hike, although several states have passed their own. Opponents are challenging the OSHA standards in court. It's possible, though unlikely, that neither will survive.
Economic downturns exercise a powerful check on regulatory overreach.
Already, Internet businesses have collided with state restrictions on competition in businesses from optometry to auto sales. The Federal Trade Commission is under increasing pressure to impose a single regulatory standard on data gathered online. And we can expect continued culture wars over biotechnology. Whether setting limits on growing new businesses or restricting struggling old ones, regulatory expansion poses the greatest long-term threat to economic prosperity. Despite rapid growth over the past five years, we are often told these days that the American economy is remarkably well balanced.