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When the regulator became the regulated

SOUTH Dakota's George McGovern flew 35 missions in World War II, was awarded a Distinguished Flying Cross, became a history professor, won election to the House of Representatives in 1956, and to the U.S. Senate in 1962.

In 1972, he "helped engineer a turn to the left by the Democratic Party that turned away many of its traditional members in organized labor and big-city political machines," as Stephen Miller of the Wall Street Journal put it.

McGovern, who died Sunday at 90, took only one state and 17 Electoral College votes in that contest.

But he continued to make valuable observations, a couple of which loom large in the election before us.

In 1988, McGovern invested most of his earnings from the lecture circuit into the Stratford Inn in Connecticut. Thus, the regulator became the regulated.

He wrote from this new vantage point in a 1992 column for the Journal.

"In retrospect, I wish I had known more about the hazards and difficulties of such a business . . . "I also wish that during the years I was in public office, I had had this firsthand experience about the difficulties business people face every day," McGovern wrote.

"That knowledge would have made me a better U.S. senator and a more understanding presidential contender."

Among the findings: Regulation and litigation are costly.

"My business associates and I . . . lived with federal, state and local rules that were all passed with the objective of helping employees, protecting the environment, raising tax dollars for schools, protecting our customers from fire hazards, etc.

"While I never have doubted the worthiness of any of these goals, the concept that eludes most legislators is: 'Can we make consumers pay the higher prices for the increased operating costs that accompany public regulation and government requirements with reams of red tape.' It is a simple concern that is nonetheless often ignored by legislators."

As for legal climate, McGovern attributed part of the rise in medical costs to malpractice suits. And even after the business went into bankruptcy, he noted, it was still in litigation with people who sued the restaurant.

"While the business owner may prevail in the end, the endless exposure to frivolous claims and high legal fees is frightening," he wrote.

"In short, 'one-size-fits-all' rules for business ignore the reality of the marketplace," McGovern wrote.

"The problem we face as legislators is: Where do we set the bar so that it is not too high to clear . . . we need to start raising these questions more often."

Twenty-four years after McGovern wrote, it is even more relevant advice.


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