Getting rid of old regulations is much too hard

by on November 17, 2013 at 7:31 am in Economics, Law, Political Science | Permalink

That is the topic of my latest New York Times column, which is entitled “More Freedom on the Airplane, if Nowhere Else.”  It opens with this example:

It is sometimes the small events that reveal the really big problems lurking beneath the surface. That’s the case with the Federal Aviation Administration’s recent decision to grant airlines the liberty of allowing the use of electronic devices during takeoff and landing.

You still won’t be able to call on your cellphone during those times, but, if the airline allows it, you will be able to read on your Kindle or play Angry Birds throughout the flight.

That’s the good news. What’s the deeper problem? Our new Kindle freedoms, however minor they may seem, show how hard it is to clear away the old, unnecessary regulations that are impeding the economy.

After all, the previous restriction on electronics during flights was broadly unpopular in a way that cut across partisan lines. Yet, for many years, the public’s complaints did not bring concrete change, mostly because of regulatory inertia. (If you’re worried about safety, by the way, the airlines can still, at their discretion, demand that these devices be turned off when deemed necessary.)

Here is another bit from the piece:

Many regulations, when initially presented, can sound desirable.  The problem is that, taken in their entirety, excess rules divert attention from pressing issues like the need for innovation and new jobs.

Michael Mandel, an economist at the Progressive Policy Institute, compares many regulations to “pebbles in a stream.” Individually, they may not have a big impact. But if there are too many pebbles, a river’s flow can be thwarted. Similarly, too many regulations can limit business activity. When the number of rules mounts, it can become hard for a business to know whether it is operating within the law’s confines. The issue is all the more problematic when federal, state and local constraints all apply.

Our public sector is overregulated, too. For instance, the tangle known as government procurement has exacerbated problems with the Affordable Care Act’s health insurance exchanges. The required formal processes made it difficult to hire the best possible talent, led to nightmare organizational charts and resulted in blurred lines of accountability. It’s hard to turn on a dime and fix such problems overnight, no matter how pressing the need.

Read the whole thing.

dearieme November 17, 2013 at 7:56 am

“Getting rid of old regulations is much too hard”: just like amending the Constitution, really.

mike November 17, 2013 at 10:54 am

The Constitution required much more than a slim majority to ratify, and therefore requires more than a slim majority to amend. The statutes enacted pursuant to the Constitution require less and (in principle) are no harder to repeal than to enact.

The real problem IMO is this nasty little thing called stare decisis, which is a made up doctrine that makes bad decisions (e.g. Wickard) much “harder” to overturn than they originally were to create.

Ken November 18, 2013 at 10:27 am

Since the constitution applies to 100% of the country, it’s reasonable to say that at least 75% of the people need to be on board to change it. At least at the state a local level, it’s relatively easy to move, which is not the case at the federal level (US citizens are subject to US regulation regardless of where in the world they live). If you can only convince a slim majority, you are setting yourself up for mob rule, often mislabelled “populist”, and very bad regulation. To claim that 50.1% of voters should be able to successfully take from or oppress the other 49.9% is to not clearly think through your position.

Government action, by definition, is oppressive and starts with the violent act of taking in order to finance itself. Knowing this, it’s only reasonable to make it very hard for politicians and bureaucrats to gather more power (i.e., more reasons to oppress and take from others in order to finance themselves). There are some reasons, though VERY few, to accept this oppression and taking, but to think it should be used for every whim the majority has really is to think lazily. I’d say it’s unreasonable to require ONLY 75% to change the constitution. You should have to convince a HIGHER percentage of people to change the constitution. In other words, it’s too EASY to amend the constitution.

Adrian Ratnapala November 17, 2013 at 7:59 am

One possible step forward would be to require agencies to submit plans for retiring some fraction of their regulations over the next few years, and to reward these agencies for seeing this process through.

Have laws them sunset. Then there needs to be an active effort to renew and review old ones. And if no political consensus can be found on the renewal, then let it slide into oblivion.

Adrian Ratnapala November 17, 2013 at 8:05 am

I really need to fix my grammar problem. My sentence should read:

Have laws sunset. Then there needs to be an active effort to renew and review old ones. And if no political consensus can NOT be found on the renewal, then let it slide into oblivion.

whatever November 17, 2013 at 8:08 pm

You corrected the first typo, and then introduced a double-negative where there was no error.

It’s usually best not to correct errors. It’s distracting. Your post was clear enough. Your posts in general are pretty clear and interesting, IMHO.

whatever November 17, 2013 at 8:10 pm

Oh, I confused you with someone else. Doesn’t matter.

Foobarista November 18, 2013 at 12:27 am

Ratnapala for President has a nice ring to it :)

Adrian Ratnapala November 17, 2013 at 7:59 am

Because old constitutional limitations are routinely getting in the way of the citizens freedoms and preventing them from doing business?

Rahul November 17, 2013 at 8:04 am

Sad part is, often there are laws and provisions that don’t really have any strong lobby that wants them any more. There ought to be more efforts dedicated to just pruning away obsolete laws or clauses that now conflict with other newer laws etc.

Claudia November 17, 2013 at 8:18 am

There are many good points in the column (you got a mental-hallelujah in the 2nd to last paragraph) but one important issue seems missing to me … how did we get to this point? Anyone who has worked in a large organization knows how hard it is to roll back the written and unwritten rules of conduct. Sometimes it is almost comical, except that it is not. It is much easier to add and kluge together than to subtract. There seems to be something very basic about our desire (or at least the desire of many) for regulation … and with it (the illusion of) safety and control.

For example, you say: “The core problem is that the system is not geared for an efficiency-oriented regulatory review.” But what if our drive to have more efficient interactions is the deeper problem? In the perfect world of policy setting, rules clarify, they promote the desirable over the undesirable, they shine light into the dark corners of discretion … in the real world, it’s kind of a mess sometimes, but there are certain efficiency gains to regulating behavior vis-a-vis existing resources (not necessarily future resources).

All this is to say, the spread and zombie-like staying power of regulations may be feature not a bug of our modern society … so you are talking about a broad cultural shift not tweaking the pay incentives of some bureaucrats. This is not rain on the parade … just to get its marketing right.

Rahul November 17, 2013 at 8:21 am

I disagree that we have any inherent desire for snowballing increases in regulation.

Making new laws is glamorous. Getting rid of obscure old ones is not. That’s the crux of the problem.

Claudia November 17, 2013 at 8:36 am

Control is a very basic desire. Letting go of an old rule is akin to giving up control (or cutting ties to long-time albeit annoying companion). We can never foresee the counterfactual. Maybe that obscure old rule is actually doing something important. It surely has a constituency, all rules have their supporter. Of course, there are rules that should go and we should be MUCH more aware of this pruning problem when setting new rules, but I am saying the roots run deep.

Oh and this “Making new laws is glamorous.” got a chuckle, but honestly who enjoys weeding more than planting seeds? (Both are essential and we all know that.)

Ray Lopez November 17, 2013 at 9:09 am

Claudia is right, that democracy fosters red tape (‘of our own making’) and is in fact the central theme behind this classic book, which none of you save me have ever read. Maybe TC has read it too. — RL

Red Tape, Its Origins, Uses, and Abuses – Herbert Kaufman
Brookings Institution Press, 1977 – Political Science – 100 pages
Most people talk about red tape as thought it were some kind of loathsome disease or the deliberate product of a group of evil conspirators or the result of bureaucratic stupidity and inertia. It is rarely discussed rationally, dispassionately, and analytically; most of us rage about it when it comes up. In this book, Kaufman attempts a detached examination of the subject to find out why something so universally detested flourishes so widely and enjoys such powers of endurance

derek November 17, 2013 at 10:38 am

I work in one of the less rigorously regulated trades, and the code book is essentially a series of rules that each derive from an event. When I was taking my training, the instructor described an event that he had seen and reported, and showed us the regulation.

Other trades are more tightly regulated, and the primary working skill you need is knowing the code book in detail. Electricians for example have many of the small details of their work defined in a regulation.

This is fine, in response to safety issues. At one point however, the regulations become not the floor but the ceiling. No initiative, no innovation can happen at all outside of the strict and slow regulatory structure. In these situations the industry is defined by the regulator, it works as designed. The US FDA and pharmaceutical industry is working as designed; extremely expensive regulatory structure that drives the industry toward home run products and diminishes innovation. Maybe another regulation can be written to make them innovate!

The natural limit to the growth in regulation is the cost of compliance and the cost of enforcement. A funny story. The Quebec construction industry was regulated very tightly; if you needed even a small construction job (defined as such in regulation) you were to hire a regulated and certified contractor who employed workers based on a complicated structure of rules. It was illegal to hire the kid next door to paint your window frames. The result was that about 50% of construction activity was underground, meaning no permits pulled, payment under the table, safety regulations and fees not paid, etc. That meant the government was not seeing revenues from multiple sources. They were forced to loosen up the rules. In Ontario right now a compliant contractor (I love that language, compliant. Prone?) will cost 20-30% more for a job, so guess who gets the work.

I would look at the current decline in job prospects for lawyers that is happening in the US as a sign that the regulatory structure is teetering on collapse.

Lefty Feep November 18, 2013 at 1:50 pm

Very interesting.

The irony in the construction situation is that the existence of regulations would seem to actually diminish safety in a substantial number of instances. Personally, before I hire a contractor or the kid next door, I decide whether there is any safety reason for regulations. When there is – rewiring the electrical, for instance – I make sure to follow code. When there isn’t – replacing a light switch for instance – I don’t even think about it.

The problem we have with regulations is that our political system does not contemplate a 4th branch of government, so there are no limitations built into the system, either theoretically or practically. We can think of things like sunsetting regulations, but that’s not a systemic matter – it’s an ad hoc solution. What I mean is that the regulatory branch of government needs to be somehow defined and limited as to its authority, just as the other three branches are. Presently, the regulatory branch exercises some portion of the powers of the other three branches, nominally with some oversight, but practically, with very little.

Marie November 18, 2013 at 2:52 pm

It is basic — the more rules you have, the more likely people will be to avoid compliance. And when they avoid compliance, it’s usually across the board, not selective for the rules that are silly — all rules start to look silly, because you lose faith that the people making the rules know what they are doing when they make them.

So if I give my kids about 200 broad rules (“Try every food I put in front of you”, “Don’t be mean”, “Hands to yourself”, “Flush”) they will be more likely to obey me overall than if I nag them to follow 200,000 (“Eat that one forkful of spinach on your plate right there”, “Don’t call your sister a brat”, “No pinching, hitting, spitting, stepping on toes, poking eyes. . . . . . “, etc.).

People wind up following rules based not on the sense they make, but on factors like which ones have an audience or which ones gain them something if they follow them, or which ones allow them to be lazier. One of my kids’ schools was supposed to test the water regularly because it was well water, principal explained one day she got her test from a local jacuzzi place — not the kind of testing the regs meant, but there’s plausible deniability there; later, found damaging levels of environmental fluoride, etc. But the rule that you can’t give away extra cafeteria food was followed diligently, because all it took to do that one “right” was to throw away food.

chuck martel November 17, 2013 at 11:07 am

This subject has been intensively investigated for a long time and there are many studies on it. Henry Jacoby, Max Weber, Ludwig von Mises, Anthony Downs and many others have written extensively on it. The real subject isn’t rules or rule making, it’s bureaucracy.

Claudia November 17, 2013 at 12:06 pm

sure it’s been studied but Hobsbawn, Engels, Polyani, Keynes, and many others have pointed out that unfettered individualism (as in unregulated markets/relationships) causes a lot of stress and suffering for people too. Bureaucracy is an endogenous outcome of the balancing act between the individual and the collective, that is, we got what we asked for (and maybe even what we wanted).

derek November 17, 2013 at 2:35 pm

Yes, and unlike other balancing systems that work reasonably well, there isn’t a natural limit or corrective that keeps things from getting out of hand. There is a limit, but it is broad and indirect. Manufacturing moving to other countries is one. Youth unemployment is another.

The perverse result is already apparent. There is no way for a business to follow all the rules. It is impossible to know them all, the often contradict, and none of your competitors are. And the regulators don’t have a clue, ultimately it is a matter of the inspector making known what he expects. As the US faces the choice of where they can spend money, the nonsense of the expensive and enormous regulatory state will lose funding. More rules will be written that will be ignored and not enforced, driving economic activity underground.

Rules that can be followed will end up being a protection and benefit. If they cannot, then they won’t, and the consumer or vulnerable person will not have protection yet be assured of it by the ones benefiting from the rule writing.

One result is that we have useless fools who didn’t accomplish anything as the only ones who can become president.

chuck martel November 17, 2013 at 6:18 pm

Is there such a thing as “unfettered individualism”? Man is, after all, a social animal. Unregulated markets are actually regulated by social dynamics, supply and demand, etc., they don’t need regulation imposed by some outside force. Stress and suffering? Isn’t there stress and suffering in parenthood, among other things? Or the educational process? Or holding down a job? Hobsbawn and Engels probably needed more stress and suffering since they both lived privileged lives. What would they have known about those two subjects?

Claudia November 17, 2013 at 7:40 pm

chuck, I was not so much as disagreeing with you as giving the alternate side of the story. of course, any human interaction, in markets or otherwise is social. sometimes unspoken rules or norms are less efficient (and equitable) than explicit rules and regulations .. and sometimes not. bureaucracy may be the enemy but it is us too.

ChrisA November 17, 2013 at 11:19 pm

Claudia
I would ask you to list the actual problems that “unfettered individualism” has caused versus the problems that “regulation”, otherwise known as Government has caused. On the Government side we have to put Stalinism, Nazis, Mao etc etc. Is there anything at all of the same magnitude on the “unfettered individualism” side? Government regulation is a very very large sledge hammer to crack some small nuts. You may argue that I am engaging in hyperbole, that American level of regulation is no-where near this level of damage. I submit otherwise; just taking a couple of minor examples, we have the heavily regulated drug trade, where is it illegal to voluntarily use drugs that haven’t been approved by the FDA, even if the user is fully aware of the fact. This has almost certainly caused millions of lives to be shortened earlier than they would have been otherwise. Secondly, let’s take the security enhancements that have been introduced in airports over the last few years. As well as making life significantly more unpleasant for a large section of the population, this has certainly pushed large numbers of people to drive instead of taking the car, again significantly increasing death rates. I could come up with many other examples. And actually the US is a place of low regulation overall. In my work I often interact with developing country governments. The regulations and rules they implement from a mixture of protectionism, stupidity and power-hungriness, are causing untold misery in their countries.

Claudia November 17, 2013 at 7:43 pm

thanks for the tip, Ray. the book is on its way to me … as a former Brookings research assistant, happy to support the press and gather some insights on the topic.

DouglasC November 17, 2013 at 10:45 am

“…… how did we get to this point ? ”

-

That’s the root issue here. What faulty social mechanism gave us this vast regulatory system — with so many unnecessary, obsolete, inefficient, foolish, and counter-productive government rules ?

The answer, of course, is the political ideology of economic and social control in all aspects of society — now embedded in American government. It has no limits and has no self-regulating method; it expands like a balloon, until it self-destructs at great human costs.

The main political divide of our time is between those who trust government with virtually unlimited power– and those who do not. We can argue endlessly about regulation, economics, healthcare,
trade, and war– but the core issue is always:
What is government and how much should we trust it, if at all ?

TommyVee November 17, 2013 at 2:29 pm

“The main political divide of our time is between those who trust government with virtually unlimited power– and those who do not. – ”

Straw Man Alert! I am unaware of any politician or public figure who is arguing for giving government “virtually unlimited power”. Certainly there may be many who prefer more government power than you do, but nobody sane argues for giving government “virtually unlimited power”. In reality, the constitutional system of checks and balances in the US provides very strong limits on government power, witness Roe vs. Wade limiting government power over women’s internal organs.
However, it is easy to find US politicians and public figures who argue for giving markets and corporations “virtually unlimited power ” (what else is a “free market” but a market without limits?).
On this very website, plenty of posters argue for capitalism with “virtually unlimited power”. If as in your post, we decide not to trust government “at all”, then there is no other realistic force with the power to prevent Love Canals, Three Mile Islands, thalidomide, human trafficking, lead/arsenic/DDT emissions, etc., with the realistic consequence that, absent government, corporations would have “virtually unlimited power” that history shows will be eventually be used to externalize costs and internalize profits.

derek November 17, 2013 at 2:37 pm

Love canals, thalidomide and human trafficking are now illegal. Justify writing more regulations.

I suggest that every regulation written in the last decade was to stop behavior that was directly or indirectly regulated into existence.

TMC November 17, 2013 at 4:17 pm

The difference between the two is that capitalism give you a choice between A and B, not between A and jail time.

TommyVee November 17, 2013 at 5:48 pm

Did capitalism give the Love Canal neighbors a choice about whether they wanted their kids poisoned?
Did capitalism give parents a choice about whether they wanted their children to have permanently reduced cognitive function from lead paint exposure?
Will capitalism give residents of planet earth a choice about whether we want sea level rise and climate change?

chuck martel November 17, 2013 at 6:23 pm

Maybe you should look a little more closely into the Love Canal affair. You obviously don’t know what you’re talking about.

srp November 18, 2013 at 8:49 pm

The classic expose of the true source of the problems at L.C:

http://reason.com/archives/1981/02/01/love-canal

HInt: It involved a school board unwisely exercising eminent domain, not an evil chemical company. Try to ignore any prejudices about the publication itself and look at the detailed evidence presented in the article. It’s never been rebutted to my knowledge.

Maurice de Sully November 18, 2013 at 12:55 pm

– I am unaware of any politician or public figure who is arguing for giving government “virtually unlimited power”. –

You should get out more.

While few people will style the statement as you have, the general tendency to (1) implement a government solution and (2) to insist that said solution be federalized whenever possible (and irrespective of the virtues of such) is the defining characteristic of the modern Democratic party.

The entire intellectual “justification” for PPACA- to the extent you can call any of those offered such- was that once we got the Feds involved, healthcare would be much more efficient. There was a constant drumbeat of progressives insisting that Federal involvement, in and of itself, would be of value to the nation as a whole. This fantasy underlies the attraction to Single Payer- and remains paramount even when the feds fail as spectacularly as they are now doing with PPACA or wholly whiff on providing the “savings” anticipated in the areas where the Feds do run health care (See Medicare spending charts.)

The belief that government protects people from the powerful- and is therefore good- is central to modern Democratic thinking. I have trouble seeing how someone can honestly disagree.

Alan November 17, 2013 at 8:23 am

Marketing: Sunshine always, sunset sooner.

Ray Lopez November 17, 2013 at 9:10 am

And moonshine forever!

BenK November 17, 2013 at 8:43 am

We probably are confusing different kinds of laws when the comments suddenly turn to constitutional matters.
It is likely that fundamental expressions of values (i.e. property laws, religious laws, and so on) are in a different category. Further, laws that govern the scope and scale of spheres in society (relative scope of the market, the government, families, religious institutions) may be put into a separate category. Procedural regulations (how the government negotiates with unions, for example), industry regulations and the like, should be considered separately.

Though there are plenty of people who would like to clear the values of others out of their way – conservatives, liberals, libertarians alike – this is fundamentally different, unlike reforming the tax code or the acquisition regulations. Similarly, though there are differing views of the legitimacy granted current federal laws under the Commerce Clause, and thus the need for Constitutional amendment, this is also separate.

As for the root of the issue: a well-known categorization taught in management classes places managers in 4 quadrants based on their proposed solutions to problems. One of the quadrants is bureaucrats, who identify mistakes/problems as a system failure, the result of inadequate rule making and enforcement, to be fixed with additional rules and/or enforcement. These people are naturally drawn to employment where rules and regulations are not only the purpose of the employment, but also the conditions under which one is employed and the mechanism of advancement. In short, large companies, the government, and regulated industry.

This form of problem solving will forever find a requirement for new rules; often patching holes in response to a violation or refining an existing regulation. With a relatively large fraction of the economy bound up in the federal government, people are conditioned to this method of problem solving and perpetuate it. There are strong structural motivations and behavioral conditioning supporting increased regulation. Eliminating the regulation would inevitably recreate the problem it had been designed to solve – with the blame and illogic that entails, so except in rare cases where the values underlying the rule changed radically, no rules are ever undone. In the silliest cases (i.e. regulation of industries that no longer exist) there is little motivation to clear away the regulations, after all.

RZ0 November 17, 2013 at 8:45 am

Interesting your article brings ACA into this, because one current problem with Obamacare, from an insurer’s perspective, is that regulations are changing too quickly.
As in:
- Law: That insurance policy needs to be canceled.
(Consumers complain.)
- President (as a regulator): That insurance policy needs to be brought back, pronto.

TMC November 17, 2013 at 10:02 am

Still adding regulation, ‘you can’t sell that’. Timinging an issue of course, but additional regulation is the problem. It would still be a crap law if it took three more years until enforcement.

derek November 17, 2013 at 10:40 am

The best and worst that can be said about that law is that it is working as designed.

ummm November 17, 2013 at 8:50 am

The problem is that, taken in their entirety, excess rules divert attention from pressing issues like the need for innovation and new jobs.
- See more at: http://marginalrevolution.com/marginalrevolution/2013/11/getting-rid-of-old-regulations-is-much-too-hard.html#comments

maybe it’s best to have more regulation and fewer jobs if constructive monetary policy can be prolonged. that seems to be hat the market wants

Marie November 17, 2013 at 8:53 am

Dog bites man, isn’t this?

As for pebbles in the stream, what makes anyone think the purpose of the pebbles isn’t the diversion of the whole stream bed? Some people use backhoes, some use pebbles.

Z November 17, 2013 at 9:07 am

The reason it is hard to roll back these laws, regulations and programs is we have the memory of a gnat. Within the lifetime of Tyler, a man got a little famous for repeatedly saying, “The closest thing to immortality is a government program.” That guy was Ronald Reagan. He had all sorts of pithy ways to make the exact same point Tyler is making three decades later.

The reason these laws, rules and program are tough to repeal is the people who pass them don’t want them repealed. It is their legacy. When you think about it, What ails us is not that it is too hard to change the rules. It is not hard enough. If the Founders had done a better job, none of this would have happened.

TommyVee November 17, 2013 at 2:40 pm

The reasons that regulations are tough to repeal is that almost all regulations have beneficiaries, who in many cases outnumber those who bear the costs of regulation.
I am quite happy that EPA regulations have cleaned the air that I breath, and I am quite untroubled that those same regulations might add a few hundred dollars to new car cost. The rule making process looked at the cost benefit (human health improvement versus increased cost) and the cost/benefit for air pollution regulations is overwhelming net positive, which is why pretty much every country, not just the US, has enacted air quality regulation.
Sure industrial emissions regulations cost the Koch brothers quite a bit, but they can well afford the cost, and in a democracy the millions who enjoy a cleaner environment will never allow themselves and their families to be sickened so the Koch brothers can make another billion. So the libertarian crusade against regulation is doomed to failure, as long as democracy survives.
Evaluating existing regulatory structure for cost/benefit is only common sense, but in many cases such an evaluation for optimum public benefit will result in more regulation and not less.
I worked as a design engineer for many years, and I question the whole right wing ideology that regulation is always bad for business. We preferred to design against a clear national standard (or even better international) (such as UL, CSA, NIOSH, etc.) since such standards clarify the rules of the game. And corporations frequently support regulations because they protect legitimate business from being undercut by unsafe and/or shoddy fly-by-night competitors.

Marie November 17, 2013 at 3:13 pm

Nope.
I couldn’t care two figs if the Koch brothers have higher costs when producing or you have higher costs when purchasing.

What I care about is a guy I know who is a rancher, who has a state licensed butcher come out to his ranch and butcher his pastured cattle on grounds; he doesn’t have to fill them with antibiotics, they aren’t covered with E. Coli, they aren’t in a feed lot eating grain, they are healthy animals and they are butchered and packaged in a safe manner. The inspector who inspects for the state also inspects for the USDA. He prefers the state butcher because he doesn’t get hair and bone in the ground beef.

But if he wants to sell by piece, he has to sell through the USDA approved butcher, who is USDA approved because his outfit is large enough to be able to have a designated bathroom JUST for the USDA inspector, that sort of necessary thing. He can only sell shares of the cow otherwise.

He cannot label his product organic (as another couple I know who grew crops almost entirely without pesticides, and used only organic when they used at all) because he can’t afford the kind of verification process necessary to be able to label that way. He can’t call his food natural. But Walmart can package their feed lot beef, I believe washed in ammonia and packed in nitrogen, as having “all natural ingredients”.

No, it’s not a matter of regulations protecting the little guy from the big guys. The big guys always win with bureaucracy. The rancher goes out of business.

mike November 17, 2013 at 3:19 pm

This is a powerful testimonial

mike November 17, 2013 at 3:20 pm

But I should add, anyone who is raising or cutting up animals is the wrong kind of white people and therefore has zero sway among the tastemakers in the modern USA

Marie November 17, 2013 at 7:07 pm

Thanks, and I’ll assume you mean metaphorical “wrong kind of white people” since I didn’t say the rancher was white. ;)

TommyVee November 17, 2013 at 4:01 pm

Actually your rancher case is a perfect example of the real world trade-offs with regulation that make repeal vanishingly unlikely.
Clearly the USDA requirements hurt this one rancher (and many others), but the US public overwhelmingly benefits by having USDA-inspected food, given the history of unsafe, unclean, and unhealthy food processing that lead to the creation of the USDA. Given the choice between abolishing the USDA and measurably increasing the risk that family members will get sick or dead from E. Coli, melamine, other adulterants,etc., but protecting small ranchers, the public in every wealthy country will vote to continue food inspection and regulation. Libertarians and small ranchers who want to avoid USDA inspection can cry all they want, but their cause will lose politically for obvious reasons of public cost/benefit.
A very few people want ranch-raised USDA-inspection free beef, but hundreds of millions want to be sure that their family can buy safe food at the supermarket.

Marie November 17, 2013 at 4:18 pm

Heavens no. There was at least one recall of E. Coli infected hamburger from Walmart while we were eating healthy meat raised by this rancher.

I’m not sure how you are misunderstanding me — the regulations are no longer preventing “The Jungle”, they are protecting it.

Z November 17, 2013 at 6:24 pm

You are correct that the welfare barnacles are held onto the leviathan by the regulatory state. Scraping them off is impossible. Well, until the ship begins to sink and then things change. Whether or not those barnacles are a majority is debatable. I also suspect you do not hold the same romantic views of regulations and laws you don’t like, but that’s just a hunch. Still, there are many example where a well connected minority gets enormous benefits from some change in policy. The liberal plutocrats pushing amnesty is a good example the counters your dewy-eyed recollection of regulations past.

Claudia November 17, 2013 at 7:08 pm

“the regulations are no longer preventing “The Jungle”, they are protecting it.”

I gotta disagree with you Marie. I grew up on a hog farm and I get a regular earful from my little brother who now runs the farm about the regulatory hoops he faces. He was also a manager at a packing plant for a while (that is a world few know) and he talked a lot about the safety procedures there. I can assure you we have come a long, long way in terms of food safety since The Jungle. We may have gone past diminishing returns but let’s not forget the real, hard-won benefits of regulation.

Marie November 17, 2013 at 9:13 pm

Claudia,
Your family farm is now one of the large corporate farms that provides much of the supply for chains like Walmart?

I will certainly defer to first hand knowledge, but your description inclines me to think your brother’s situation is more like the rancher I reference than the large suppliers I feel are being given an unfair market advantage because of counterproductive regulation.

I knew a family that grew crops on land new to agriculture, never sprayed non-organic pesticides, and kept pests down generally by covering and picking bugs. They could not label their food organic. But General Mills can call a cereal Blueberry Whatever and put pictures of blueberries on the box without actually having any blueberry at all in the package. This is the kind of regulation I’m talking about.

I’m glad we don’t have the harbor slaughterhouses selling rotten meat any more, but I don’t think that’s the kind of regulation you’re seeing any more. You don’t think your brother would agree with me?

Claudia November 17, 2013 at 9:36 pm

Nah, Marie it still is considered a small family farm. My brother might well agree with you but I don’t.

Squarely Rooted November 17, 2013 at 9:24 am

OIRA requires CBA on all regulations with a certain minimum impact, but as the pebble-river metaphor illustrates, this doesn’t really capture the general equilibrium – CBA focuses narrowly on the ceteris paribus impact of the question at hand.

Here’s an idea – Congress should mandate the establishment and maintenance of a “Cost of Doing Business Index” by an independent agency (CBO is a good example) that would calculate the total average regulatory burden on business. New regulations over a certain size (like those targeted by OIRA) or at a certain level of generality must be submitted to the CDBI agency for review, and its impact calculated and added to the index. Congress could then statutorily cap the total level of the index, requiring new regulations that would cause the index to exceed the cap to be “offset” in some manner.

Unlike other, stupid rules (like “one in, one out”) this would allow for transparent, independently-adjudicated debate over the idea of regulatory burden, its nature, and its acceptable costs.

Rich Berger November 17, 2013 at 9:40 am

Most of the public is unaware of the regulatory noose around their necks until something blatant happens like the cancellation of HC policies (first individual but then employer-provided to come). How about freezing regulations first, sunsetting them next and giving the agencies a budget on how many regulations they can issue. Failing that, reduce their budgets. How about getting rid of the Departments of Education, Transportation, Energy and Labor while we’re at it?

It seems like Obamacare may have a silver lining.

william November 17, 2013 at 9:41 am

Seriously, how much impediment to the economy is actually caused by not using cellphones on planes? Or reading your Kindle on takeoff? The reason _these_ regulations were hard to clear away is because the only people that wanted rid of them were those that cannot take their hands off their phone. And, of course, the phone companies. No-one else benefits.

TMC November 17, 2013 at 10:07 am

So you want to push people to read magazines I bet. In the pocket of Big Magazine?
Seriously, what do you care if someone surfs the internet, streams some music, or checks his email.
MYOB.

TommyVee November 17, 2013 at 2:48 pm

While I don’t support continuation of the cell phone air travel restrictions, there is no doubt that many travelers will see negative impacts from unavoidable noise. And handheld electronic devices will become missiles in some cases too.
I travel by bus frequently, and most buses now have at least one loud cell phone conversation, benefiting one person and annoying many more. Regular commuters mostly have headphones to screen out unwanted cell talk, but I suspect a passenger vote would limit cell phone volume and duration if it could be conducted.
Like almost all regulations, there are costs and benefits spread across many people that need to be evaluated and nobody but a zealot thinks that less regulation is always better.

TMC November 17, 2013 at 4:27 pm

Nothing stopping the attendant telling the passenger to quiet down. They have no issue with that today.

I agree there is a cost and benefit to every move we make, but many of the ‘costs’ already have moderators in place.
The burden of proof really should be on those wishing to impose on people’s freedoms.

chuck martel November 17, 2013 at 6:34 pm

Is there some constitutional right to quiet? In what locations would it be specified? On an airplane? At an NBA basketball game? Outside a firehouse? If you’re offended by the decibels of modern life you might want to move to northern Saskatchewan, it’s pretty quiet there.

Tununak November 17, 2013 at 10:44 am

I see – we should keep all unnecessary regulations because you like to control other people’s activities.

For some people the Nanny State is a feature, not a bug.

mike November 17, 2013 at 11:12 am

It is an interesting example of how the law informs morality. People rationalize these petty tyrannies by assuming they must have some benevolent purpose and that only bad people want to violate them, turning a law’s victims into its staunchest defenders.

Tracy W November 17, 2013 at 2:44 pm

I take it that you’re not in the habit of reading addictive page-turners on your kindle.

Yancey Ward November 17, 2013 at 10:33 am

Every law should come with a sunset provision that requires Congress and the Executive to re=pass and re-sign.

Craig November 17, 2013 at 10:47 am

It would be worth it to watch the current congress try to re-pass the Federal Aid Highway Act of 1956, which created the interstate highway system. Or is that an example of a good law that should live forever?

Adrian Ratnapala November 17, 2013 at 12:01 pm

If the law sunsets does someone have to take a sledgehammer to the highways? It’s not like you need to sunset the in order to neglect their maintenance — that’s already happening just find.

Z November 17, 2013 at 12:49 pm

That bill had a sunset provision. The road building was expected to last a decade and the trust fund would expire in 1972.

mulp November 17, 2013 at 2:38 pm

But the regulation set in place by the Eisenhower Defense Highway Network limits trucks to 60 tons gross on ten axles and 18 tires (16 load carrying tires) with minimum height clearances, and minimum widths, and minimum turning radius and grades.

Basically, the capability to carry missiles and tanks to any part of the nation and to ports.

And anything bigger and heavier would be carried by the robust rail network that had been constructed by Republican policies and under regulations driven by Republicans.

In both cases, the biggest customers, the corporations, the engineers of the rail and road builders, and the pols who both wanted the service and did not want the costs in money and society costs, were heavily involved.

Today, the railroad network is no longer robust and thus the assumptions and compromises and division of traffic that set the regulations is seen as bad regulation.

So, why can’t trucks carry 250 tons gross, 150 tons in cargo, on the highways? The rail service no longer exists to provide that service? The government is hindering business by preventing economic activity that was common in 1960. Back then, massive steel castings were being created for nuclear reactor vessels in Ohio and then shipped all over the US. Back in the 60s, huge power transformers were being constructed and shipped all over the country. Today regulations makes what was easy in 1960 extremely hard today, not because of regulation on highway loads because in 1960 no highways could have carried these loads, but because regulations to upgrade the roads assumed that the rail network would remain and thus did not require the Interstates match the railway cargo capacity.

Removing the highway vehicle restriction regulations would lead to bridge failures quickly plus lots of accidents and deteriorating roads very quickly. The Seattle bridge collapse was caused by a trucker driving cargo that violates regulations over the wrong route. Procedures exist to move oversize loads, and his cargo had the permits, but he took the wrong route.

You can’t change the way the roads were designed and built since 1956 by eliminating the regulations on roads that trucking companies have been fighting for decades.

David Brown November 17, 2013 at 6:55 pm

I think what you are missing here is that road costs do not scale linearly with weight. They go as the fourth power of axle load:
http://www.nvfnorden.org/lisalib/getfile.aspx?itemid=261
Increasing allowed axle load by factor of 2-4 will increase road damage per weight transported by 8 to 24. And who is going to pay for that?

As currently devised, the Federal Highways are an incredible subsidy to freight hauling by road instead of rail. To capture these negative externalities, use taxes for trucks should substantially increase.

Alan November 17, 2013 at 10:49 am

Yancey will keep em busy. Too busy to pass new ones. Isn’t that a big part of the problem? Not every good idea makes a good law.

save_the_rustbelt November 17, 2013 at 11:13 am

I rue the day when half-witted salesmen and vile financial engineers will be jabbering into their smart phones during an entire flight.

Micha Elyi November 19, 2013 at 3:49 am

It’s time to bring back the phone booth as the BYOD booth. Not so the caller can have some privacy but so the rest of us don’t have to be unwilling third parties to the caller’s cell phone conversations.

And maybe there’s a market for a real-world version of the Get Smart cone of silence.

Kaleb November 17, 2013 at 11:17 am

If it makes you feel better, getting rid of an old lack of regulations seems to be quite difficult as well

Adrian Ratnapala November 17, 2013 at 12:03 pm

By which I suppose you mean getting the particular regulation that you wanted. Or more generously, getting the system to produce the *correct* regulation. Or are there big areas of the economy just devoid of regulation altogether?

Kaleb November 17, 2013 at 10:02 pm

Just like I’m sure tyler meant getting rid of the old regulation he didn’t want. Or getting the system to dismantle the *incorrect* regulation. Come on.

mulp November 17, 2013 at 2:04 pm

While some things seem simple, like allowing cell phone use on planes, the problem is the FCC and the cell phone industry and the technologists have assumed that a given cellphone can only “reach” at most a dozen cell sites. It is known that line of sight limits the number of cell sites a cell phone will be negotiating with to establish a channel.

Put the cell phone in the air and now hundreds of cell sites can be reached, violating the design assumptions.

The correct solution is making the plane a cell site, and then it establishes a link to ground stations designed for that situation using high power transmitters.

Of course, the technical solution requires equipment on the plane, and that puts the flier at the mercy of the air carrier who gets to charge higher fees for providing out of network cell service.

Thus it seems that the regulations are backed by crony capitalists to keep out competitors. Its a conspiracy of physics and capitalists that is the crony capitalism.

Boonton November 18, 2013 at 4:44 pm

The correct solution is making the plane a cell site, and then it establishes a link to ground stations designed for that situation using high power transmitters.

How is that ‘correct’ from an economic POV? The cell phone companies do not own the plane. I recall hearing that every pound on a plane costs $100,000 in lifetime fuel costs.

If this is the ‘right’ solution then why wouldn’t phone companies pay the airlines an amount sufficient to ‘rent’ space on every plane so they could provide their users with uninterupted reception?

Micha Elyi November 19, 2013 at 3:52 am

If this (make the plane a cell site) is the ‘right’ solution then why wouldn’t phone companies pay the airlines an amount sufficient to ‘rent’ space on every plane so they could provide their users with uninterupted reception?
–Boonton

Remember Airphone, the free market solution?

Try again.

Boonton November 17, 2013 at 3:40 pm

A good piece but what’s missing is a theory for how regulations die. Yes in some cases pressure causes the regulation to be abolished in a formal way, but this is rare and I suspect it always has been rare.

A theory here should consider that regulations live in a type of ecosystem. Like a species in an ecosystem, it will suffer from entropy which will result in decay and eventual extinction unless forces are alligned against it. Forces that align against a regulation include:

* Innovation that makes older regulations moot (railroads, roads, planes didn’t void regulations about canals, but made many of them either moot or irrelevant).

* Regulations need to be enforced, enforcement is a scarce good so a society must decide how much they should allocate to enforcement and which regulations should get the larger share of that enforcement.

* Regulations need to be protected from other regulations. New regulations issued by new authorities can declare any older regulation that contradicts the new ones as void. A new department or new officer charged with an exciting new mission (clean up the stock industry, make food safe, some pollution by ‘big oil’ etc) can demand and get power to overrule the previous regulator authorities.

For any given regulation, all these ‘natural forces’ are aligned against it. In order for the regulation to survive, it must find support to balance itself against the forces that would see it either eliminated or made irrelevant. Pebbles in a stream are a useful but somewhat misleading analogy. If you put a pebble in a stream it will take the stream a very long time to wear that pebble down. Issue some obscure regulation today that no one pays attention too and I suspect there’s a good chance you will have a hard time finding it decades or centuries later…even though there may never be any specific democratic movement to repeal or reform the regulation.

These lead to some counter-intuitive possibilities:

* A huge swath of new regulation may be good. Older regulations that no one cares to make an effort to protect will be killed off faster by being pushed into the shadows.

* Worrying too much about the written regulations may not be very helpful, instead worry about who has enforcement and writing authority. Suddenly yanking the regulation writing authority from one department and giving it to another may be a better way to prune old regulations. The new authority will care more about creating and defending their regulations and care little to help protect the regulations from the previous authority.

* Do cost benefit analysis on enforcement, not the regulation. Does anyone make house paint with lead anymore? Probably not. Hence random spot checks of paint factories is unlikely to eliminate any new cases of children eating lead tainted paint chips.

* Looking at regulations as a unit (like pebbles) makes little sense. In the above example, what would be the effect of ‘abolishing’ the hypothetical regulation against using lead in house paint? Since no factory would want the liability of putting out lead tainted paint, it wouldn’t provide any ‘regulatory relief’ to anyone yet a dumb metric like “# of pages of regulation” would pick it up as an improvement.

Jimmy November 17, 2013 at 4:34 pm

I am Jimmy and I am an economics major at Chapman University. I have a blog called “Stay in the Loop” and it deals with similar topics as this blog. Please take a look and comment. http://langn102.wordpress.com/

David Brown November 17, 2013 at 6:42 pm

I think the ACA is indeed an interesting window into the failures of our civil service. Our gov’t has no internal function for doing quality analysis on contracts. It also put limits on both pay to direct employees and to anybody paid out of a contract. ($670k). The result is contracts that go to the lowest bidder who don’t bother assigning there best people to it.

Our civil service is in need of reform.

anon November 17, 2013 at 8:21 pm

do not go after the civil service … leadership comes from the TOP.

George Purcell November 18, 2013 at 10:30 am

Fundamentally it boils down to a question of the role of process on outcomes. What’s missing is an appreciation that process can only go so far in preventing bad things and that process runs the risk of keeping good things from occurring.

Servius November 18, 2013 at 10:36 am

I would support a Constitutional Amendment that sunset all laws and regulations 7 years from enactment and required all regulations promulgated by an agency of the Federal Government be passed by the Congress and signed by the President like normal legislation.

If the law is a good idea, then pass it again.

Kevin P. November 18, 2013 at 11:01 am

I generally agree with this, although 7 years may be too short a time period. I would suggest 13 years for legislation passed by Congress and 7 years for regulations passed by federal agencies.

In addition, legislation passed by a 2/3rds majority could be exempted from the sunset, or have a longer sunset period.

Boonton November 18, 2013 at 11:06 am

unfortunately I think that would create a huge ‘regulatory uncertainity’ problem. Don’t assume good regulations would be re-upped. Look at the debt ceiling train wreck. Good regulations could be held hostage by interest groups who will either demand their own favorite regulatins be passed with them or other agendas be adopted as the price for the good regulations being re-upped. Even worse, the better the regulation the more valuable it will be as a hostage.

Amazon Owns Obama November 18, 2013 at 10:37 am

What do you mean it’s hard to get rid of rules?!

It’s super easy to get rid of regulations when a major campaign bundler like Jeff Bezos tells the President to get rid of a rule!

(Seriously, did you think FAA would have been in a hurry to de-regulate unless Amazon stood to make a bunch more money on Kindles? Even when the de-regulate, Obama does things the Chicago Way.)

beachrat November 18, 2013 at 10:38 am

Over-regulation was not the problem in the Obamacare contracts. Abdication of oversight, accountability, and quality assurance minimum standards is the (ongoing) problem. Those contracts need to be cancelled, new solicitations issued, and appropriate processes installed and followed rigorously. Until they do that (not that I’m holding my breath), there is no way those deliverables will do anything but get more bloated, inefficient, and unworkable.

TMLutas November 18, 2013 at 10:49 am

The problem of regulation effectiveness is an information problem. How many regulations are increasing costs and/or decreasing safety over non-regulatory solution alternatives? Nobody knows the answer to this because nobody actually grabs copies of all these regulations and does the analysis. We don’t even have the prerequisites down, an accurate count of all of our governments. The US keeps a census of the things every 5 years but states have their own definitions and the state lists don’t necessarily agree with the federal lists. If you don’t have an accurate listing of regulation issuing organizations, how can you possibly do anything rigorous about regulations? I am currently working up a methodology to at least get the list of governments done and create a web service so you can type in an address and get back a list of the governments that have jurisdiction there.

I would suggest that if it were easier to nominate regulations for repeal and organize communities devoted to their repeal we would get more repeals. This is a programming problem and not a particularly hard one but nobody has gone on to do the work yet.

Boonton November 18, 2013 at 1:05 pm

Nobody knows the answer to this because nobody actually grabs copies of all these regulations and does the analysis

If someone is following a regulation they either grabbed a copy of it, read it and altered their behavior to comply with it or they were following it anyway.

If it’s the former then the cost should be computable. The business had to pay someone to read the regulation, advise them on how to comply, and then incur costs to move into compliance. If it’s the latter then the regulation is merely signalling a consensus on how business is done and effectively has zero cost (possibly even has a benefit if it provides new entrants to the business an easy way to find out what the ‘normal business practices’ are in a particular industry).

Here’s an example, I was listening to NPR one day and they were talking about restaurant regulations. In a restaurant, the bathrooms have to have a door on them to prevent flies from possibly moving from waste in the bathroom to the kitchen thereby spreading disease. Let’s say that’s $500. Furthermore, the doors have to have a spring hing so they will automatically close should someone forget to close the door behind them (say $1200). How much does this regulation cost?

Certainly not $500. I find it hard to believe if the regulation was dropped tomorrow upscale restaurants would allow diners to sit watching people use the toilet in full view! Perhaps the difference between a regular door and the automatic door ($700)? Perhaps but I again find it hard to believe many restaurants would want to let diners see the toilets while ordering their food. On the other hand I could see a fly-by-night operation opting for a non-door solution to the bathroom (curtain of beads or whatnot).

Hard to say what the cost is but whatever it is it most certainly is not possible to derive it by simply grabbing the rule book and adding up the cost of each line.

Kurtis Fechtmeyer November 18, 2013 at 11:30 am

I’ve always thought that every law and every agency of the US government (except the military) should sunset after 20 years. In 20 years, you have either solved the problem OR the institution you put in place is ineffective and should be swapped for a new effort.

Harun November 18, 2013 at 12:09 pm

House of Repeal idea has been around.

Duracomm November 18, 2013 at 12:28 pm

Low information, “rationally” ignorant voters like TommyVee are another reason it is difficult to get rid of damaging regulations.

The fact that regulations cause vast amounts of damage (documented once again by this month’s AP story on federal regulations and how they cause wide ranging environmental destruction) is a foreign concept to him.

If there is no understanding of the damages regulations cause there is no political support for ending these regulations.

Ellsworth Hawse December 4, 2013 at 3:59 pm

Welcome Steinbach! We’re so enthusiastic to welcome you into the Fruit Share friends and family we know you are likely to like it!

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