Published: Fri, 24 Mar 2017 00:00:00 -0400
Last Build Date: Fri, 24 Mar 2017 13:34:14 -0400
Tue, 21 Mar 2017 14:35:00 -0400President Donald Trump's proposed cuts in the Environmental Protection Agency's budget "will not 'Make America Great Again', " asserted Conrad Schneider, the advocacy director at Clean Air Task Force activist group. "It will 'Make America Gag Again.'" Schneider and other alarmed activists are conjuring the bad old days of the mid-20th century when America's cities were blanketed with smog and its streams clotted with filth. In his new budget blueprint, Trump wants to cut back Environmental Protection Agency funding by 31 percent and fire 3,200 of agency's bureaucrats. But would such steep EPA budget cuts really unleash polluters to pump out more smoke and sewage? To get a handle on this question, let's take an amble down memory lane to assess the evolution of pollution trends in the United States since President Richard Nixon cobbled together the Environmental Protection Agency in 1970. First, with regard to air pollution, air pollution in most American cities had been declining over the course of the 20th century. Why? Many American cities had recognized the problem of air pollution in the late 19th century. Consequently they passed ordinances that aimed to abate and control the clouds of smoke emitted from burning coal in industry, heating, and cooking. For example, Chicago and Cincinnati adopted smoke abatement ordinances in 1881. American Enterprise Institute scholars Joel Schwartz and Steven Hayward document in their 2007 book, Air Quality in America, that emissions of smoke, soot, ozone and sulfur dioxide had been falling for decades before the creation the EPA and the adoption of the Clean Air Act. For example, ambient sulfur dioxide had fallen by 58 percent in New York City during the seven years preceding the adoption of the Clean Air Act. "Air quality has indeed improved since the 1970 passage of the" Clean Air Act, they claim. "But it was improving at about the same pace for decades before the act was passed, and without the unnecessary collateral damage caused by our modern regulatory system." They attribute a lot of the pre-EPA improvement in air quality to market-driven technological progress and increases in wealth that enabled households to switch from coal to cleaner natural gas for heating and cooking; railroads to replace coal-fired locomotives with diesels; more efficient industrial combustion that reduced the emissions of particulates; and improvements in the electrical grid that allowed power plants to be situated closer to coal mines and further from cities. Even if the Clean Air Act did not noticeably speed up the rate of air pollution abatement, the air is nevertheless much cleaner than it used to be. How clean? Since 1980 the index for six major pollutants, carbon monoxide, ozone, particulates, sulfur dioxide, nitrogen dioxide and lead has dropped by 65 percent since 1980. In the meantime, the economy grew more than 150 percent, vehicle miles increased by more 100 percent, population grew by more than 40 percent and energy consumption rose by 25 percent. And yet, a 2016 Gallup poll found that 43 percent of Americans say that they worry about air pollution a great deal. Schwartz and Hayward persuasively argue, "The public's interest lies in sufficiently clean air, achieved at the lowest possible cost. But federal air quality regulation suffers from incentives to create requirements that are unnecessarily stringent, intrusive, bureaucratic, and costly." Basically, the costs of ever tightening federal air pollution controls are now exceeding their benefits. Since most remaining air pollution (except for greenhouse gases which we will set aside for a discussion at another time) is now concentrated in discrete regions rather than crossing jurisdictional lines, cities, counties and states can be reasonably expected to monitor and regulate those pollutants without much federal oversight. The EPA also regulates water pollution under the Clean Water Act of 1972. That act prohibits anybody from discharging "pollutants" through a "point source" into a "water of the United States" unless they have a permit[...]
Mon, 13 Mar 2017 14:32:00 -0400Products regulated by the Food and Drug Administration (FDA) account for about 20 cents of every dollar of annual spending by U.S. consumers, amounting to more than $2.4 trillion in annual consumption that includes medical products, food and tobacco. The agency regulates medicines, diagnostic tests, medical devices, food safety including those made from modern biotech crops and livestock, food labeling, and tobacco and nicotine products. What the agency's bureaucrats decide has signifcant impact on U.S. economic growth and the livelihoods of Americans. President Donald Trump has nominated physician and American Enterprise Institute scholar Scott Gottlieb to become commissioner of the agency. Gottlieb earlier served as deputy commissioner during the Bush administration. Gottlieb has long been a critic of FDA's increasingly risk-averse culture that is slowing down the approval of new medicines. Defenders of the agency often cite data suggesting that the agency approves new medicines faster than other drug approval agencies abroad. That is true if only the period of time after a drug maker has submitted its New Drug Application (NDA) for approval is taken into account. More consequentially, increasing FDA requirements for longer and more extensive clinical trials before the NDA is submitted has substantially lengthened the periods and raised the costs of getting new treatments from petri dishes to patients' bedsides. Consider that researchers at the Tufts University Center for the Study of Drug Development have estimated that in 1991 it cost $412 million (2013 dollars) to develop and obtain approval for a new pharmaceutical. Last year, they calculated that it now takes more than $2.5 billion, a six-fold increase. Gottlieb, who has been associated with venture capital side of medical innovation, will seek to change the agency's culture from the current highly precautionary approach to one that more readily recognizes that benefits always come with risks. Under his direction, the agency would likely exercise a lighter regulatory hand over the development of new medical apps and diagnostics while seeking to work out the best way to speed up the approval of novel therapeutics based on stem cells and gene-edting technologies like CRISPR. Gottlieb is keen to get generic drugs approved quickly in order to bring down prices for consumers. In an August 2016 op-ed in the Wall Street Journal, he noted it now takes more than 2 years for the agency to approve a generic drug application and that the costs had risen from $1 million in 2003 to over $15 million now. He added, "This means that a drug may not face brisk generic competition until it exceeds $25 million in annual revenue. Thanks to these changes, infrequently used generics—such as clomipramine for major depression—may now have only one competitor and cost as much as branded drugs." Gottlieb also cited research that estimated the FDA's proposed generic labeling rule would expose generic drug manufacturers, who supply 84 percent of all prescriptions, to failure-to-warn product liability lawsuits, costing more than $5 billion in 2017. That rule is supposed to be finalized in April. As commissioner, Gottlieb might be able to halt it. While not a radical reformer, Gottlieb clearly has a good understanding of how over-regulation has been slowing down innovation in medicines and foods.[...]
Sun, 12 Mar 2017 20:45:00 -0400
(image) "At heart I'm a libertarian," famous entrepreneur Mark Cuban said at a South by Southwest panel focused on disruption and government regulation.
But moments later, he said that while he believed many government regulations are bad, he had "evolved" on some healthcare issues and believed that America had taken on a liability and should guarantee that citizens have access for emergency or chronic medical problems.
"If a toilet falls out of a space lab and hits you on the head," Cuban joked, you should be guaranteed healthcare. But he also made it clear that healthcare shouldn't be guaranteed for every medical problem, and he thought the terms should be provided by a constitutional amendment.
Many libertarians may look askance at such a position, and perhaps also wonder why guaranteed government healthcare was even a topic of discussion for a panel titled "Is Government Disrupting Disruption?" In reality, talks about disruptive innovation and government regulation probably took up only a quarter of the conversation of the panel.
The panel's apparent actual function was to float the trial balloon of "Mark Cuban: 2020 Presidential Contender."
Interestingly, while Cuban is critical of Trump's mental acuity (diplomatically speaking), he made it clear that he is indeed in favor of much of Trump's deregulation hopes, though Cuban believes there are regulations that should be preserved (including federal water management) if they achieve a public safety goal. It was not pointed out to him that nearly every single regulation is claimed to preserve public health and safety even when they do not, but he's at least aware that there are other regulations that are designed to "protect moneyed interests" or to serve as a "source of revenue" for government agencies. (Also of interest, he told the SXSW crowd that net neutrality was "bad, scary" and the Federal Communications Commission "worse, worse, worse.")
Cuban was critical of Trump's economic growth strategy while accepting the reality of the tough lives of people in parts of the country. He, like many trade and economic analysts, doesn't believe the president can roll back the clock to give people their old jobs back. "Our current administration is not going to solve this problem by thinking they're bringing back factories," he said.
When moderator Michele Skelding, an entrepreneurial advisor with the University of Texas at Austin, suggested his comments were "a great platform to run on." Cuban wouldn't commit one way or the other as to whether he would consider a presidential run in 2020, but it seemed clear it was something he was thinking about.
"There's somebody who has to run that looks forward and not like it's 1975," he said. But while the former Trump-praiser-turned-critic ("I got to know him," he explained) could oppose Trump, he made it very clear there are parts of Trump's agenda (deregulation) that he actually supports.
"But I like presidents who read," he said, to the crowd's cheers.
Wed, 08 Mar 2017 14:30:00 -0500Two hallmarks of President Donald Trump's plans to revive the economy are lifting regulations on coalmining and forcing companies to bring manufacturing jobs back to the United States via protectionist policies. Neither is likely to work, for related reasons. Consider coal first. The Baker Institute writes at Forbes: Government regulations have very little to do with coal's problems. Repealing the CPP [Clean Power Plan, a regulation passed by President Obama] or opening federal lands to mining won't rescue King Coal from the drubbing it is receiving at the hands of cheaper, cleaner natural gas and wind power.... The challenge is as Sisyphean as it is undesirable. His plan represents a broadside against the market and climate forces that have made great strides in modernizing American power generation. Even Trump's stated grounds for his avowed goal, employment, would most likely be undermined by his intervention.... As my colleagues demonstrate, short of an improbable event that sends natural gas prices soaring, there is little chance of a coal renaissance in America. That's a good thing, for plenty of reasons. Natural gas and other forms of energy are more efficient and create less pollution. Coal mining employed just 66,000 in 2015, while newer methods of energy extraction, such as shale gas, employ more people. So anything that Trump does to stoke demand for coal in the current climate will have counterproductive impacts. When it comes to manufacturing, Trump (along with many other politicians, including Hillary Clinton and Bernie Sanders) similarly overpromises. Manufacturing jobs—factory work, essentially—has been declining as a share of employment since 1943. The red line, which runs left to right and captures the percentage of factory workers as a percentage of total employment, shows a straight-line decline from the 1940s until the 2010s, when it flattens out around 8 percent as it slowly approaches zero percent. Apart from relatively small artisanal manufacturing shops scattered around America, there is no reason to expect a large reversal in a trend that has been in place for around 70 years. Trump and other "economic nationalists" may well try to bully, tax, and otherwise discourage companies from moving jobs overseas, but the jobs saved will be rounding errors and simply forestall whatever developments might actually jack up the economy for real. Consider for instance the effects of occupational licensing rules and other certifications that create barriers to entry for new businessess, operators, and services. For all his talk about cutting regulations, Trump has had little to say about sharing economy ventures such as Uber or Lyft. Given his interests in conventional hoteling, I assume he is not predisposed toward Airbnb and other house-sharing services. But those are the sorts of come-from-nowhere services and companies the squeeze jobs and value out of otherwise dead assets. Economies function more efficiently when the actors in them—consumers and producers alike—are generally free to act how they want. Vested interests will always be trying to screw over competitors and customers so they can maintain or grow their market share. One of the things I like about Trump is his willingness to talk about deregulating vast aspects of the economy. Unfortunately, his deregulatory zeal seems to be less about creating a wide-open economy that is characterized by creative destruction which "incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one" and more about reviving some preferred industry from the past. Unless we really get lucky, deregulation informed by nostalgia isn't going to create a vibrant future.[...]
Tue, 07 Mar 2017 11:33:00 -0500The New York Times on Monday published a useful if context-lite front-page article on the Trump administration's plans to roll back some federal regulations. Before delving into the policy content of the push, linger for a moment on the Paper of Record's headline, since it reveals much about why the default setting of the regulatory state is to grow forever: "Leashes Come Off Wall Street, Gun Sellers, Miners and More." If I am understanding the metaphor correctly, financial companies, firearms merchants, and minerals-extractors, in addition to the headline's "more" as enumerated in the full article (telecoms, automakers, pharmaceutical companies, internet service providers, chicken farmers, hunters, and pretty much every corporation that pays salaries or owns property), are the equivalent of dogs, liable to wreak havoc—presumably by biting, pooping, or just roaming around in unsettling ways—unless restrained by a strap, preferably attached to a neck-collar, and controlled by the guiding hand of benevolent government. This from a paper known for being sensitive to the dehumanizing perils of comparing categories of human to animals. And to take figurative language even more literally, the implication of removing a leash is that the dog now runs free. Whatever one might think of either Donald Trump or Wall Street, the whiff of suggestion that the financial industry exists in a regulatory-free environment is flat bonkers. The unspoken default assumption of the Times article, wince-inducingly familiar to those of us who have either worked for or consumed too much of mainstream American journalism, is that regulations can be assessed not by effectiveness but by virtuous intent. And that intent can be intuited by a selectively curated roster of who's for and against. Here is a typical passage: Ajit Pai, a Republican whom Mr. Trump recently named as the F.C.C. chairman, has also made clear that he intends to push to roll back or abandon several other major rules, including the landmark net neutrality intended to ensure equal access to content on the internet, as well as efforts to keep prison phone rates down and a proposal to break open the cable box market. The efforts have been praised by telecommunications giants, like Comcast, but condemned by consumer advocates. Reading this you'd have no clue that there were consumer-oriented, non-self-interested arguments against net neutrality (neatly summarized in a whole Reason special issue, including a very interesting interview with Pai himself). Instead you're steered without subtlety to a conclusion that need not be troubled by further inquiry into cost and benefit. If evil Comcast is on one side, and "consumer advocates" are on the other, well, 'nuff said. So: Team Regulation in this article is described variously as "public interest groups," "environmentalists," "labor unions," "consumer watchdogs," "nonprofit groups," and "Democrats." The radicals threatening to rip things up are called "corporate lobbyists," "trade association executives," "industry executives," and "Republicans." The lone exception to this presumed white hat/black hat framing comes when acknowledging that the American Civil Liberties Union took sides with the National Rifle Association (ewww!) in rolling back a late-Obama reg instructing the Social Security Administration to cough up names of people it classifies as having a mental illness to the national gun database in order to deny them the right to purchase weapons. "The Obama-era rules under attack have drawn objections even from some liberal groups," the paper said. The "SMDH" is implied. At this point you may be asking, don't they have an opinion section for such editorializing? But as Scott Shackford pointed out one week ago, the paper's editorial board even more blatantly airbrushed not just the ACLU but also a bunch of non-conservative mental health groups who supported overturning this midnight regulation: the New York Times editori[...]
Wed, 22 Feb 2017 15:15:00 -0500
Three Reason editors-in-chief arrived at the International Students for Liberty Conference to discuss four decades of reporting. Marty Zupan, who edited Reason in the 1980s; Nick Gillespie, editor in the aughts; and current magazine editor Katherine Mangu-Ward have all covered world events from a libertarian perspective.
Produced by Todd Krainin. Cameras by Josh Swain and Krainin.
Sat, 18 Feb 2017 08:00:00 -0500Newly proposed legislation in Montana and California could loosen restrictions on millions of small food entrepreneurs in those states. In Montana, the Local Food Choice Act would "allow for the sale and consumption of homemade food and food products and... encourage the expansion of agricultural sales by ranches, farms, and home-based producers" in the state. The law would exempt those who make and sell such foods directly to consumers from mandatory licensing, permitting, packaging, labeling, inspection, and other requirements. The law doesn't exempt those who don't sell food directly to consumers—as in the case of those who sell to restaurants or grocers—or to those who sell food across state lines. "Eating what we choose should never be a crime," said State Rep. Greg Hertz (R), as he introduced the bill last month. Indeed, Hertz's bill would effectively legalize in Montana what is now a crime there and in almost every state: the act of selling something as basic as homemade cheese dip or pickles to your neighbor. Hertz's Local Food Choice Act is fashioned after Wyoming's groundbreaking Food Freedom Act, first-in-the-nation legislation passed two years ago that deregulated many direct-to-consumer food sales within the state. As I detailed here, Colorado passed a similar law last year. Other states have also considered similar measures. In California, a bill introduced this week by Assemblyman Eduardo Garcia (D), the Homemade Food Operations Act, "would allow home cooks to sell hot, prepared foods directly to customers." The California bill isn't as ambitious as those adopted in Wyoming and Colorado or that proposed in Montana—it still contains requirements for sanitation, training, and permitting—but it's a giant leap in the right direction. "Many of my constituents have expressed their concerns and frustrations trying to work in compliance with the existing, overly complicated cottage food laws," said Assemblyman Garcia in a statement announcing the bill, referencing the state's overly restrictive cottage food laws. Not surprisingly, all this talk of deregulating local food sales has some people nervous. State and local health officials in Montana, for example, have spoken out against the state bill, claiming it could lead to a rise in cases of foodborne illness. "Every state that looks at setting their local food economy free inevitably finds food police lining up with statistics on how freedom of choice is a danger," said Wyoming State Rep. Lindholm (R), who sponsored the Food Freedom Act in his state, in an email to me this week. "These individuals, bureaucrats, and industry associations all espouse their merits as to being defenders of ignorant consumers that cannot be trusted to make their own decisions as to what is best for their family." I asked Lindholm if there's been any uptick in foodborne illnesses in Wyoming since the law's passage. "Wyoming has seen the exact opposite that these do gooders predict," Lindholm tells me. "Wyoming[']s local food options have exploded and we still have had 0 foodborne illness outbreaks due to this Act passing into law." I've chuckled while hearing more than one overly cautious eater tell me they'd never eat food that was prepared in an uninspected home kitchen. Everyone should be free to avoid such food if they want, of course. But keep in mind that your own home kitchen isn't inspected. Your parents' kitchen and your grandparents' kitchen weren't inspected, either. Your friends' and relatives' kitchens aren't inspected. The baked goods you took to school to sell to other kids as part of a bake sale (or that you send with your own kids to school today) haven't earned any government seal of approval. Avoiding all foods save for those prepared in an inspected kitchen means dining out at every meal or not eating at all. If one or both of these are your choice, then so be it. But Montana and California have m[...]
Wed, 08 Feb 2017 13:40:00 -0500The Climate Leadership Council, a group of conservative stalwarts, has just released its carbon dividends proposal as a way to address the man-made climate change problem. They accept that man-made global warming could become a significant problem for humanity later in this century. In order to mitigate that risk, they propose a carbon dividends plan that rests upon four pillars: (1) a gradually increasing carbon tax, (2) carbon dividends for all Americans, (3) border carbon tax adjustments, and (4) the elimination of all current top-down climate change regulations. The CLC folks envision the carbon dividend plan as collecting a carbon tax beginning at about $40 per ton at the wellhead, minehead, or import terminal. The tax would gradually and predictably increase over time enabling innovators, businesses and consumers to take future energy prices into account as they make their plans. The CLC group calculates that the tax would initially garner $200 and $300 billion which they estimate would yield about $2,000 annually in dividends for a family of four. All of the tax proceeds would be distributed on an equal and quarterly basis via dividend checks, direct deposits or contributions to their individual retirement accounts. The CLC cites a Treasury Department estimate that the bottom 70 percent of Americans would come out ahead under their proposal. "Carbon dividends would increase the disposable income of the majority of Americans while disproportionately helping those struggling to make ends meet," they calculate. Border adjustments to prevent free-riding would be made to goods imported from countries without comparable carbon taxes and rebates made to American exporters whose goods are subject to comparable foreign carbon taxes. Border adjustment proceeds would be added to the quarterly carbon dividends paid to Americans. The carbon tax and dividend program would entirely replace the EPA's current tangle of intrusive, burdensome, and expensive regulations on carbon emissions. Specifically what regulations would be eliminated? The CLC group argues for getting rid of the Obama Administration's Clean Power Plan that would have required electric power generation companies to cut their carbon dioxide emissions an average 30 percent by 2030. Adopting the carbon dividend proposal would also justify eliminating all green energy subsidies and tax preferences and all energy efficiency standards. In addition, the Corporate Average Fuel Economy Standards (CAFE) and state renewable energy portfolio standards could be dumped. As result, the CLC folks argue that their carbon dividend proposal will shrink the overall size of government and steamline the regulatory state. Recognizing the vexed politics concerning climate change, the CLC folks note that all four pillars of their proposal must be adopted. They state: For the elimination of heavy-handed climate regulations to withstand the test of time and not prove highly divisive, they must be replaced by a market-based alternative. Our policy is uniquely suited to building bipartisan and public support for a significant regulatory rollback. It is essential that the one-to-one relationship between carbon tax revenue and dividends be maintained as the plan's longevity, popularity and transparency all hinge on this. Allocating carbon tax proceeds to other purposes would undermine popular support for a gradually rising carbon tax and the broader rationale for far-reaching regulatory reductions. According to The New York Times, CLC member James Baker who served as Reagan's Treasury Secretary is scheduled to discuss the plan today with Vice President Mike Pence, Jared Kushner, the senior adviser to the president, and Gary D. Cohn, director of the National Economic Council, as well as Ivanka Trump.[...]
Wed, 25 Jan 2017 11:46:00 -0500President Donald Trump will announce plans to build a wall on Wednesday, but the things his administration are trying to tear down might end up being more important. It's no secret that Trump wants to hack away at the federal regulatory state—during the campaign, he promised to repeal two regulations for every new one approved; on Monday, during a meeting with several business executives, Trump promised to cut 75 percent of all federal regulations, "and maybe more." Those claims seem more like campaign trail promises and typical Trump bluster than achievable goals, but give Trump credit for getting straight to work on the issue. Axios, citing an unnamed "senior transition source," reported Wednesday that Trump plans a deconstructing of the regulatory state that will target the Environmental Protection Agency and the departments of Education, Energy, and Interior during his first 100 days in office. "President Trump plans to attack the regulatory state from every angle," the source told Axios. "The government has been captured by elites, which gets to the very core of what animates the president." Citing a different source, the same report says Trump plans to undermine the regulatory powers of various federal agencies by executive order, rather than going through Congress in an effort to dismantle the agencies' authority. If true, that would mean Trump could move more quickly to curtail the EPA and other agencies that he sees as holding back businesses and the economy as a whole. On the other hand, using executive orders to implement his agenda of deregulation would mean the next president could undo many of those changes—in the same way that Trump is now unwinding some of President Barack Obama's "pen and phone" policies. Trump's inclination to act quickly certainly is understandable, but the way to reform America's regulatory state permanently, as I've written before, will require working with Congress. On that front, there might be more good news. In an op-ed published Wednesday in The Wall Street Journal, House Majority Leader Kevin McCarthy (R-California) outlined a series of regulatory reforms that take aim at the federal bureaucracy. The first step, McCarthy says, is passage of the REINS Act, which would require any new regulations that cost $100 million or more to be approved by Congress before taking effect. As I wrote last week, the REINS Act would only apply to about 3 percent of all federal regulations, but it would be a meaningful reform because it gives Congress a way to check executive rules with the potential to be particularly harmful. House Republicans also plan to pass the Regulatory Accountability Act, which would undermine the so-called "Chevron deference" within the legal system. The Chevron doctrine grants federal agencies wide leeway when challenged in court, essentially instructing judges to defer to an agency's own interpretation when determining whether a rule is necessary or proper. McCarthy's plans for the House seem to follow Trump's outline. The majority leader says the House will vote to repeal the Department of the Interior's Stream Protection Rule, which has limited access to the nation's coal supply, and will trim the Obama administration's methane regulations that limit oil and gas production. Other federal rules that limit energy production, like the Securities and Exchange Commission's disclosure rules for American drilling firms, will also be axed, McCarthy writes. There are still many, many reasons to worry about Trump's presidency, but regulatory reform could be a silver lining.[...]
Fri, 20 Jan 2017 11:20:00 -0500
(image) Lots of activists are gnashing teeth and rending garments over the passage in the House of Representatives of the Regulations from the Executive in Need of Scrutiny (REINS) Act which would require both houses of Congress to vote on any new regulations issued by federal agencies that have an economic impact exceeding $100 million. The Union of Concerned Scientists asserts the REINS Act exists "to 'rein in' public health, safety, and environmental protections, and nothing more. They have been written and drafted by corporate lobbyists not to improve the federal regulatory process, but to stymy it, and add yet another roadblock for implementing sensible safeguards."
Over at The New Scientist, physical sciences editor Lisa Grossman dismisses the REINS Act supporters' claim that its purpose is "increase accountability for and transparency in the Federal regulatory process." Instead she sees a darker motive: "In practice, [passage of the REINS Act] could mean that years of painstaking research that go into writing regulations can simply be ditched, replaced with simple political whims....the fact that Congress seems eager to strip science out of the rule-making process is part of a larger trend: replacing scientific expertise with the vagaries of politics."
As necessary and valuable as scientific expertise is, scientists and federal bureaucrats are not experts at evaluating and making benefit-risk tradeoffs. If members of Congress get those tradeoffs wrong, voters can fire those whom they believe are not acting in ways that adequately protect their health, safety, and livelihoods.
As my colleague Eric Boehm has reported the federal regulatory state is out of control with new rules proliferating under President Obama at near light speed. As Case Western University law professor Jonathan Adler points out the Constitution vests the power to make laws in Congress, not in federal executive agencies. Adler concludes:
Federal regulation reaches nearly all aspects of modern life and is pervasive in the modern economy. Much of this regulation may be necessary or advisable, and nothing in the REINS Act would hinder a sympathetic Congress from approving new federal regulations. In all likelihood, however, the REINS Act's congressional approval process would prevent the implementation of particularly unpopular or controversial regulatory initiatives. The primary effect of the legislation would be to make Congress more responsible for federal regulatory activity by forcing legislators to voice their opinion on the desirability of significant regulatory changes.
It is past time for Congress to take responsibility to reassert its authority to make the rules that affect the health and livelihoods of millions of Americans.
Thu, 29 Dec 2016 00:01:00 -0500The new year is a time to make resolutions to improve your life over the next 12 months. This time around, there's a new boss in the White House and the Republicans have control of Congress. So though I usually don't feel I can realistically add big sweeping changes to my list—a tactic often likelier to yield failure and frustration than success—I am going to dream a little and call for boldness on top of no-brainer reforms. -- Reform the corporate income tax. It's been a few decades since Congress engaged in real tax reform. As a result, the corporate income tax rate is the highest of all developed nations—35 percent at the federal level alone. We also have a worldwide tax system, which means that if it weren't for an ability to defer paying taxes at the U.S. rate as long as overseas income stays abroad, corporations would be subjected to Uncle Sam's insatiable appetite no matter where they make money. An easy fix would be to lower the rate as much as possible and move to an origin-based territorial regime—all paid for by cutting spending and reforming entitlements. (I told you I would dare to dream.) -- Repeal the Affordable Care Act. From the "if you like your plan, you can keep it" fiasco to soaring Medicaid costs to exponentially rising premiums, Obamacare needs to go. Friends and foes of the repeal believe that the reconciliation process would be a logical pathway to achieving this goal. After the repeal, Republicans would have an opportunity to replace Obamacare with a plan that is much closer to a real market solution. I certainly hope they would try to use health savings accounts rather than tax credits, which would have a mandate problem and could be described as "Obamacare Light." Though the health insurance system is important, lawmakers should not overlook another issue that's just as important, if not more so: how to unleash waves of disruptive innovation that can bring health care costs down and increase quality. To foster such change, we need to give health care providers and innovators wide leeway to innovate and experiment. This requires us to loosen the coercive grip of government agencies (Food and Drug Administration, I am thinking of you) and special interests. Currently, our laws, regulations and institutions constantly get in the way of unleashing the kind of technological revolution that transformed other industries, such as information technology. In his "Fortress and Frontier in American Health Care" and other writings, my colleague Robert Graboyes makes a passionate case for permissionless innovation in health care. Lawmakers should listen to him. -- Deregulate. The burden of regulation on our personal and business lives has made us run sore for decades. Economists have documented how the large accumulation of regulations has serious impact on our economy. Economists John Dawson and John Seater estimated, for instance, that federal regulations from 1949 to 2005 caused the gross domestic product to be $38.8 trillion less in 2011 than it would have been. They figured that this loss amounted to $129,300 per person. Also, the World Bank found that a 10 percent increase in regulatory burden is associated with a loss of half a percentage point in the overall world economic growth rate. That's thousands of dollars in lower income per person. But things have gotten worse since President Barack Obama took office. As documented by Diane Katz and James Gattuso of the Heritage Foundation, the unparalleled increase in regulatory burdens since 2009 brings the regulatory costs to an astonishing $108 billion a year. Imagine the incredible decline in economic freedom and individual liberty that resulted from this regulation spree. -- Drain the swamp by ending all subsidies to private businesses. Cronyism—the unhealthy marriage betw[...]
Tue, 22 Nov 2016 15:45:00 -0500
(image) During the presidential campaign Donald Trump suggested that man-made climate change was a "hoax" perpetrated by the Chinese.* In addition, he declared that he would "cancel" the Paris climate change agreement. Today during an luncheon interview at the New York Times, president-elect Trump seems to have backtracked bit with regard to the Paris Agreement. From the Times:
President-elect Donald J. Trump said on Tuesday that he would "keep an open mind" about whether to pull the United States out of a landmark multinational agreement on climate change.
During his presidential campaign, Mr. Trump repeatedly said he would withdraw from the Paris climate accord. But on Tuesday, he said, "I'm looking at it very closely. I have an open mind to it."
Just exactly how to square his climate change open-mindedness with his promises to somehow revive the coal industry and deregulate fossil fuel production is not clear.
Addendum: Apparently Trump also told the Times reporters and editors that with regard to climate change, "I think there is some connectivity. Some, something. It depends on how much."
*As astute commenters have pointed out the hoax line was from a 2012 tweet. I hope that my error did not unduly confuse readers.
Fri, 11 Nov 2016 17:00:00 -0500
(image) The Obama Administration imposed fuel efficiency standards on the automobile industry requiring them to increase fuel efficiency standards to 54.5 miles per gallon by 2025. Now carmakers are reportedly asking the incoming Trump administration for a "a pathway forward" on setting final fuel efficiency standards through 2025 and calling on the next administration to "harmonize and adjust" the rules.
Predictably, any hint that regulations might be rolled back brings forth howls of protest from activists. And so it has. Public Citizen, the self-styled "people's voice in the nation's capital" issued a press release decrying the notion that corporate average fuel economy (CAFE) standards might be loosened:
In 2009, in the aftermath of financial losses that stemmed from poor sales of inefficient fleets and higher oil prices, American taxpayers rescued the auto industry after it nearly went out of business. Now, this same industry sent a memo to Trump's lobbyist-staffed transition team asking for permission to ease off improved fuel economy standards.
Let's not forget that the reason the auto industry had to be bailed out was because automakers built a fleet of gas-guzzling sports utility vehicles that they could no longer sell. More fuel efficient cars would have saved them and taxpayers the trouble, but now it appears that the auto industry has learned nothing from its recent mistakes.
Federal regulators raised fuel efficiency standards because they save consumers money and are an important part of our effort to combat climate change.
Back in 2009, I criticized Obama's proposed CAFE standards as an inefficient stealth tax on driving. It's inefficient because drivers pay more, car companies make less money, and state and federal governments don't get any extra revenues. If activists and politicians want Americans to drive more fuel-efficient cars, the simple and honest thing to do would be to substantially raise gasoline taxes concluded a 2002 National Academy of Sciences report. Ultimately, I argued, setting CAFE standards is just a way for cowardly politicians to avoid telling their fellow citizens that they should pay more for the privilege of driving.
Sat, 16 Jul 2016 07:36:00 -0400Every year, typically during the summer months, many state laws that were passed during earlier state legislative sessions take effect. Some repeal bad old laws. Others add to the mix. I've written about the impact of these state laws on beer brewers, sellers, and consumers, most recently here and here, where in the latter piece I noted that a new crop of laws demonstrated progress but showed just "how far we have to go to make sure brewers, restaurants, other sellers, and consumers alike have all the choices they want." This summer, with many changes on the books, seems as good a time as any for an update. Ohio recently lifted its ban on many sales of beers containing more than 12 percent alcohol. In Colorado, a new law, which went into effect this month but won't take effect until next year, will eliminate many restrictions on grocery sales of beer (along with wine and liquor). Currently, Colorado grocers may sell so-called "near beer," or beer that contains up to 3.2 percent alcohol, at each of their locations in the state. But they can only sell actual beer that people want to drink, along with wine and liquor, at one location each in the state. Under the new law, grocers will be able to sell beer, wine, and liquor at each of their stores in the state. If that were the end of it, this would be a great law. But the compromise law contains significant catches. The gradual deregulation under the law won't take full effect until 2037, when many Coloradans who haven't yet been born are old enough to drink. Until then, grocers will have to be content with a law that abolishes the 3.2 percent requirement in 2019, and allows for an increase from one location selling liquor to five immediately and to twenty locations in 2032. That means many consumers who frequent grocers like Safeway will be left with fewer choices for decades. The law, which is too much change for some and too little for others, is likely to be challenged, amended, or both in the coming years. The push to end the 3.2 percent requirement in Colorado, and a similar effort in Oklahoma, may also resonate in Utah, one of a few "near-beer" states remaining. With fewer and fewer states clinging to arcane near-beer rules, there's some belief brewers may choose to eliminate production of 3.2% beers altogether. Some fear that would leave Utah, which generally prohibits sales of beer greater than 3.2 oercent alcohol in groceries and convenience stores, with empty store shelves and thousands of lost jobs. Another state with changes underway is Missouri, which recently expanded retail options for beer sold in growlers. That's a good thing for craft brewers, consumer, and stores alike. The state also passed a law that lets brewers lease coolers to grocers. The law was supported by large brewers and opposed by craft brewers, who fear they'll be squeezed out of the beer aisle by larger brewers that can afford to buy the coolers and place them (stocked with their own beers) in stores. If the law proves as bad as the state's craft beer industry fears, the upside is that it sunsets in 2020, while the growler law, which should benefit craft brewers, contains no such provision. Two good laws also failed to pass in Missouri. Gov. Jay Nixon vetoed bills that would have "allow[ed] alcohol sales on smaller boats and one permitting people attending events in stadiums to order drinks on mobile apps." Change is also coming to some farmers markets. A new law in New Hampshire will allow beer sampling at farmers markets in the state beginning next month. But a Delaware bill that would have done largely the same in that state was defeated this month. Innumerable bad laws remain on the books, including North Carolina's cap on craft brew[...]
Sat, 12 Dec 2015 08:00:00 -0500Earlier this year, Wyoming became the first state in the nation to pass a groundbreaking Food Freedom Act. As I wrote after the law passed, the Food Freedom Act deregulates many direct-to-consumer food sales in the state. Wyoming State. Rep. Tyler Lindholm co-sponsored the law, which passed thanks to widespread bipartisan support in the state legislature. When I spoke with Lindholm earlier this year after the law took effect, he called it "a game changer for Agriculture in Wyoming" and predicted farmers markets in the state would immediately feel the impact of the law. The first growing season under the new law has drawn to a close. So how's the new law doing? It appears State Rep. Lindholm was right. "Wyoming's first season under the Wyoming Food Freedom Act was one of bounty without a doubt," Lindholm told me by email this week. "I've had the opportunity to crisscross this great state throughout the year and have perused more than my fair share of farmers markets, in addition to shopping directly at farms without having to worry about 'Big Brother' taking issue with my edibles, and the results have been exactly what we all knew already. The free market will thrive if given the chance." Lindholm tells me that many farmers market managers he's spoken with are thrilled with the new law. "I've talked with several Farmers Markets and their managers and have found the numbers being reported as doubling the number of consumers and producers in a multitude of products," he says. Farmers are also finding success under the law. "Lyle Williams and his wife Jana operate a small farm in the South West corner of the state and have taken the ball of Food Freedom and run with it," Lindholm tells me. "Lyle has worked a great deal of his life in the oil field and was working there still up until recently, but he didn't quit that field due to the downturn in oil; he quit because he can do just as well if not better selling his products at the farm directly to the consumers. He sells out of milk every day and has had to be constantly growing the size of his herd in order to keep up with demand." One of the chief concerns voiced by critics of the new law was that it would lead to an increase in foodborne illness. It's probably too early for any data on foodborne illness cases to have been tabulated. Still, I've searched for but have been unable to find reports of any uptick in foodborne illness in Wyoming since the law's passage. Celery that may have been contaminated with E. coli was recently recalled in Wyoming and other western states, for example, but that celery came from California. While food-safety issues do not appear to have arisen under the new law, one issue has made news. Farmers who want to expand their offerings to include on-farm sales of raw milk and other higher-risk foods have found it difficult to obtain insurance. That's hampering some from offering more food choices. Challenges aside, the law is big news in Wyoming. Earlier this year, after the Food Freedom Act took effect, Wyoming's PBS affiliate produced an excellent two-part series on the law's impact. You can watch it here and here.) As Wyoming Farmer's Market Association board member Bren Lieske told Wyoming Public Media last month, the state's farmers and other food producers operating under the new law "have the opportunity to model to other states that less regulation of locally-produced foods can be safe and good for local economies." The good news out of Wyoming appears to be spreading. Recent reports have indicated that a neighboring state, Utah, is also testing out the idea of adopting a food freedom law of its own. Like Wyoming's law, the Utah bill&n[...]