July 17 is the anniversary of the 1790 death of Adam Smith, the Scottish philosopher and political economist who influenced the thinking of multiple early Americans. Smith’s warning about letting unelected or overly powerful elites regulate private industries is as relevant today as when he first wrote it.
Smith observed, “It is the highest impertinence and presumption… in kings and ministers, to pretend to watch over the economy of private people, and to restrain their expense... They are themselves always, and without any exception, the greatest spendthrifts in the society. Let them look well after their own expense, and they may safely trust private people with theirs. If their own extravagance does not ruin the state, that of their subjects never will.”
In America, we do not have kings, but we do have elites as wealthy and powerful as monarchs. And now as then, these politicians and bureaucrats are very irresponsible with money and ignorant of basic economic principles. Therefore, it is no surprise that government regulation usually does more to kill the private sector than improve it.
A 2017 Auburn University study estimated that every government regulator costs the U.S. economy $11 million and 138 private sector jobs a year. In January 2025, economic expert Peter St. Onge published his analysis with the updated number of each regulator costing America $16.5 million of economic output annually. For an overall number, we can look to The Regulatory Review in early 2024, which reported that government regulations cost U.S. businesses approximately $300 billion annually.
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In other words, we're talking about hundreds of thousands of jobs lost and billions of dollars down the drain over the decades thanks to government regulations. While some government regulations are necessary or helpful, the overwhelming majority of them are harmful or simply a stall without accomplishing measurable positives.
And yes, government officials are very irresponsible with money, which is hardly surprising, given that they’re always working with other people's money. It takes a man of great integrity not to overspend money that is not his, particularly if there are no dramatic consequences for so doing. The Trump administration's battle with the Newsom California administration over the high-speed rail project is a good illustration of how elites are spendthrift and never actually produce anything.
After spending $14 billion with no measurable progress, the boondoggle project spurred Donald Trump to reject more funding requests from Gov. Gavin Newsom, who sued the Trump administration. Newsom eventually dropped the lawsuit. But that project is just a microcosm or single sad example of the egregious misspending ongoing at both the state and federal levels in America.
Both California and New York Democrats have driven wealthy businessmen out of their jurisdictions with wealth taxes, excessive environmental regulation, and more. That’s what elites who have never had to build a career off responsibly handling their own money always end up doing. It is why they are so disastrous for private business.
