This.
Ask a hot dog vendor how he feels about regulating business, and he pictures the government telling him how many of each type hot dog he can sell. He doesn’t picture preventing Wall Street from gambling with his retirement funds.
Just as a side-note, that sounds quite different from the Canadian process. Here, the statutes and the regs are drafted by the same drafting team, on instructions from the relevant department and Cabinet, so there’s a lot of internal consistency. The regs get revised regularly when there are major amendments to the statute, and if the statute is repealed and replaced, the regs get re-drafted or repealed/replaced at the same time. Often the amendments to the act (or a new act) won’t be proclaimed in force until the regs are ready as well, to ensure a seamless legislative document. (Regs here are legislation, not executive interpretations of the laws passed by Congress.)
It’s an organizational difference that flows from the different systems: in the US, the Acts are drafted by the legislative branch, but the regs by the executive departments. In the Westminster system that Canada uses, the acts and regs are drafted together, by the ministry that is responsible for the act.
It’s pretty easy to find examples of regulations that are generally agreed to be a net positive because they make society safer and more functional.
It’s also pretty easy to find regulations that are generally a net negative, the most obvious of which are the ones that provide barriers to entry to certain industries to keep out competition and maintain rents.
And of course there are a lot of regulations that have both positive and negative effects, and reasonable people can disagree on whether they’re a good idea and what the tradeoffs should be.
However, even if a given regulation is in general good, the net result of all of them can still result in sclerosis. The more regulations there are, the harder it is to accomplish anything without running afoul of some of them. At some point, in order to reasonably accomplish a task, it takes a sufficiently large company to have a team of people whose job is to make sure they comply with regulations, and probably another team of people whose job it is to fight legal battles with regulators, and (worst case) another team to make sure that when new regulations are being written, they favor your business.
If you are interested in a reasonable anti-regulation conservative voice, I recommend Coyote Blog’s posts tagged with “Regulation”.
I can hardly wait until the republicans de-regulate the healthcare industry so that we can make situations like this even more widespread:
A general principle that supports it in some cases is related to tax incidence. Increasing costs through regulation in many ways can operate like a tax. With the behavior being similar to a direct tax the notion of tax incidence comes into play. The situations where a change in tax rate affects only by one part of the market (just the business owners for example) are generally edge conditions. Usually the changes get spread through all those operating in the market affected - business owners, workers, and customers to varying extents. That notion of tax incidence and who truly bears the burden of a tax isn’t some wild unorthodox position that’s strictly partisan. It’s basic microeconomics. It’s included behind the scenes in the non-partisan CBOs analyses of tax changes. The real fights among economists on the issue are how much incidence to assume on each of the parties involved.
If ignoring tax incidence is a problem on the left my side has it’s own issues with ignoring pretty basic microeconomics related to the issue. Market failures like monopoly power and externalities can also produce inefficient solutions. Regulation is one way to address those issues and can help the economy perform more efficiently. Ignoring market failure corrections and blaming everything on government induced failures while worshipping at the altar of the free market is as anti-intellectual as ignoring the concept of tax incidence.
One of the (many) things Trump missed is that there were already processes in place to review old regs/rules and look at teh cost-benefit effects of changes in rules… There may be ways to improve the effectiveness if Congress or the administration wanted to actually do a deep dive into it. It wouldn’t provide much in the way of wildly partisan talking points for either side to do the hard work on an obscure process. There’s certainly no splashy EO in the first weeks of a new administration going that route.
Totally in agreement and I hope that a massive number of regulations get rolled back.
There is ample evidence that regulation hurts economic growth.
We introduce a new time series measure of the extent of federal regulation in the U.S. and use it to investigate the relationship between federal regulation and macroeconomic performance. We find that regulation has statistically and economically significant effects on aggregate output and the factors that produce it–total factor productivity (TFP), physical capital, and labor. Regulation has caused substantial reductions in the growth rates of both output and TFP and has had effects on the trends in capital and labor that vary over time in both sign and magnitude. Regulation also affects deviations about the trends in output and its factors of production, and the effects differ across dependent variables. Regulation changes the way output is produced by changing the mix of inputs. Changes in regulation offer a straightforward explanation for the productivity slowdown of the 1970s. Qualitatively and quantitatively, our results agree with those obtained from cross-section and panel measures of regulation using cross-country data.
Regulation is increasing at an increasing rate.
There were more than 90,000 pages added the Federal Register, that behemoth of a book that annually tracks the growth of the federal leviathan, during 2016, making last year’s list of federal rules and regulations a full 10,000 pages longer than the previous record. Including last year’s record-breaker, 13 of the 15 longest registers in American history have been authored by the past two presidential administrations
So the George W. Bush and Obama administrations gave us far more regulations than any other administrations, and economic growth stank during their administrations. Maybe it’s just a coincidence.
Most people simply don’t know about most of the regulations that exist. If they did, they’d be angry. Dishwashers don’t wash nearly as well as the used to. The reason is government regulation. How many people would support rules that outlaw effective dishwashers and require ineffective ones, if they knew that such rules existed?
Or maybe, just maybe, it’s because the federal government does actually take a ridiculously long time to make decisions, preventing Americans from buying and using good things for decades. Ever heard the story of the genetically modified salmon?
Back in the previous millennium, scientists added a growth hormone gene to ordinary salmon. This modification would allow salmon to reach full size much quicker, meaning that salmon could be produced at a much lower cost with less environmental impact. The added gene was not the leas bit dangerous. Everyone should be happy about that, right?
Well the government delayed the use of genetically modified salmon for almost 20 years. Specifically the FDA. There were fights about who exactly had the authority to regulate it, and how it should be classified. Obama administration officials leaned on FDA officials to not approve it for several years, for political reasons–some voters have unjustified fear of GMOs. So poor people were denied affordable salmon, and the environment was damaged, because of pointless bureaucracy.
Think that only happens to salmon? I rather suspect it’s happened to a lot of other useful genetically modified products as well.
I tend to be a supporter of law-and-order. I’m glad that there are laws against robbery, burglary, etc. Yes, there are silly laws: If the Internet is to be believed, in Rhode Island it is illegal in sell toothpaste and a toothbrush to the same customer on a Sunday. But these silly laws tend not to be enforced. More important than eradicating such silly laws, I think more crimes need to be defined!
For example, it was only recently that it was made illegal for a licensed financial adviser to give deliberately bad advice in order to profit from his client’s gullibility. (And now, ***repealing that Obama-era law is high on the list of priorities for our 115th Congress. ***:smack:)
Regulations are just laws. Like laws, the purpose is to reduce bad behavior and encourage good behavior. We eat food with confidence — because of government food safety regulations. Dams and bridges are less likely to collapse because of regulations. Corporations cannot generally be trusted to “do the right thing” without laws. Recently an insider at Big Pharma posted at SDMB explaining that drug regulations are needed to keep drug companies honest.
People who support regulations are people who want the world to be safer, the air and water to be cleaner; who want the rights of the underdog upheld. People opposed to regulations are those who want to profit by selling slipshod products, by polluting, by not running thorough studies on their new pharmaceuticals.
It really is almost that simple. People who want long healthy lives should favor regulations. People who want higher dividends from their stocks at the expense of the environment, at the expense of their customers, oppose regulations. There are two kinds of legislators — those who represent people, and those who represent corporations.
Or is there a third kind? –
I agree wholeheartedly. Bad regulations should be repealed, revised, or left unenforced. It might be useful to take a small sample of regulations being repealed and classify them carefully.
But should we believe that some legislatures and regulatory agencies are sadistic? That they are happy to develop contradictory regulations without ever streamlining them? Whenever they can impact Acme Corporation’s profits by pretending some stupid banana slug is an endangered species they are delighted to do so? They make drug companies run through hoops, because the government bureaucrats are busy selling the drug companies’ shares short for personal profit? Corporations are basically benevolent, but legislatures and government agencies attract malicious sadists eager to create a maze of twisty regulations all contradicting each other?
If you believe that, then yes, government regulations should be rolled back.
Sorry, XT. I’m sure you don’t believe this — I have constructed a caricature just so that my point is clear. To a first approximation we should assume that regulations are to protect consumers and the environment from corporate profiteers. Yes, some regulations are an over-reach but to assume this applies to many of them, or that wholesale reduction of regulations is a good policy, is just propaganda from corporate rent-seekers and profiteers.
Just based on my first and second hand knowledge of government bureaucracy, I’m sure there are regulations that are redundant, not effective at addressing the issue, cause more harm than good, etc.
That said, the way they are going about choosing which regulations to take away doesn’t strike me as being particularly based on any hard knowledge of the regulations and their impacts, and thus imprudent.