The problem with not having any regulation is that 'free markets' don't always take into account social net present value of projects – for e.g. Noise impact of Third London Airport . So sometimes (even a Chicago guy like me would admit) that Free Markets fail because they are applied in a very narrow scope. I do feel that we are over burdened with regulations. I think the problem today is not whether there are enough regulations, I think the problem is lack of consistent interpretation, resourcing of regulating bodies and enforcement with existing regulations.
On the flip side I as a CEO have rarely made an investment decision (or delayed one) because of excessive regulation or health care burden – I think the uncertainty in demand in the single largest factor in preventing people from hiring or adding additional capacity. This can be largely attributed to the slow recovery of the housing market which has been highly interfered with and distorted by politicians and regulators.
I do think Fracking needs to be carefully expanded after ensuring proper procedures are developed for casing/cementing of wells, making sure excessive water is not consumed and whatever is discharged is treated right to avoid ground water contamination. Given the glut of natural gas I think the fracking industry has some time to get it right and make it a sustainable energy source that abundant natural gas can be.
I am overall very bullish on America because of the following factors: 1) Great resource of energy in natural gas; 2) Competitive manufacturing which is going to bring manufacturing from the developed world to the US – Japan, Europe etc.; 3) Innovation and ability to bring new technologies to market; 4) The system infrastructure – rule of law, transperancy, overall low corruption, physical and information infrastructure etc. I do think it is time for a 2nd morning in America and it doesn't have to be at anyone else's expense.
