Economic Troubles Point Out Positives of Reasonable Regulation1 Nov, 2008 By: Thomas Haire Response
With the economic disaster that struck — full force — during late September and early October, the concept of governmental regulation regained the spotlight in a big way. During the final weeks of the presidential race, economic regulation was a hot-button topic, no matter what side you're on.
As usual, many of those to the left of the political center pointed the finger at the vast deregulation of the financial markets that has taken place during the past two-and-a-half decades as a main culprit for our economy's problems. And, as expected, most of those on the conservative side of the ledger tried to deflect the blame from the policy of deregulation and instead place it just about anywhere else — from governmental meddling to the hybrid government/private nature of Fannie Mae and Freddie Mac to even those who should have never been approved for home loans in the first place.
However, with all the finger pointing and political bickering, the answers — as usual — lay somewhere in the middle ground. This economic meltdown, though, does once again prove a fact that those in business tend to forget during boom times: as has been proven time and again in the United States, a completely unregulated market only works to a certain point. The point where it takes a turn for the worse is where corporate greed takes over. While businesses certainly suffer if they are over-regulated, a complete and total trust in the "wisdom of the market" is usually just as misguided, as you can always count greed to rear its ugly head.
For me, it's been an interesting case study and reminder while I have spent the past couple of months working on a story about regulation and government affairs in the direct response market. In numerous conversations with some of the top legal experts in our business, as well as the leaders of various trade associations, during the past year, it's become clear that new technology and an ever-changing consumer landscape are forcing direct response marketers to keep a closer eye on the halls of Washington.
As usual, the biggest government affairs issues in direct response marketing revolve around changing regulations and enforcement by Congress, the Federal Trade Commission (FTC), Federal Communications Commission (FCC) and state attorneys general. But how — and how much — they are regulating our business is changing.
For many years, during the "Wild West" days of the direct response TV market, the case for over-regulation was an easy one for the FTC to make. Now, with corporate marketers changing the face of direct response TV — and expanding direct response to all media — it seems there is more of an understanding between the business and regulators. Efforts by industry associations to promote self-regulation have been a huge positive in this area, as the regulators now see a business environment willing to help police itself and avoid the problems that bad marketers create for everyone.
As we've seen a groundswell of support for reasonable regulation with the economy in recent weeks, perhaps those involved in making choices in that area can look at how regulators and business owners in our space have created a balance that has minimized the problems that greed engenders, while allowing business to grow and succeed.
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