Missing the story of how regulations enrich companies

Pulitzer Prize-winning business journalist David Cay Johnston writes for American Journalism Review about how business reporters are missing the story about how new regulations are enriching companies at the cost of consumers.

Johnston writes, “The costs of these new rules are enormous. Take that railroad industry rule on monopoly pricing. It costs the people of Lafayette, Louisiana, $6.5 million more than if they paid competitive shipping prices for coal brought from Wyoming to their municipal electricity plant. Eliminating the monopoly overcharge would be the equivalent of a 10 percent cut in property taxes.

“In my book ‘Free Lunch,’ I explained how rules for new electricity markets actually tend to raise prices to levels almost as high as what an unregulated monopoly could charge. Those rules, not coincidentally, were written by Enron.

“The six untold or little-told stories cited at the beginning of this article are just examples of a multitude of pocketbook stories missed by reporters in our state capitals and Washington, on Main Street and on Wall Street, especially in the business section. We should be pursuing such stories with vigor.

“These changes get missed or misreported in part because, in the framing of the great newspaper editor Gene Roberts, instead of emerging in an official announcement, they ‘ooze.’

“Part of the problem is that far fewer reporters are covering important departments and agencies in Washington, D.C., as well as the 50 state capitals, according to detailed surveys by AJR.”

Read more here.