Tag: Red tape

Testing… Testing…

 

If I were a certain sort of woman, I’d blame it on The Patriarchy. If I were another sort, I’d blame it on A Culture Insufficiently Supportive of Life. (And, if I were a very specific sort, I’d do both.) Instead, it was the understandable result of The Powers That Be in our neighborhood hospital system not having leeway to make more fine-grained distinctions in a crisis. Which is how pregnant women, who aren’t permitted to receive any in-person prenatal care right now if they have the least little sniffle but no negative lab result for Covid-19, must go through a lengthy, frustrating, and high-exposure screening process to see if they qualify for Covid-19 testing, while the nonpregnant may simply waltz – or rather drive – through safer, low-exposure Covid-19 testing in about 15 minutes.

If you’re pregnant, though, the screening process might take hours, during which you hear, at each step along the way, that you may be ineligible for the lab anyhow – and that’s just your time spent at the walk-in screening center. It doesn’t count the hours (days) you may have spent trying to find a walk-in screening center that hasn’t run out of swabs for the day, and finding out whether you’re even eligible to visit it.

The NEPA Stranglehold

 

This month marks the 50-year anniversary of the National Environmental Policy Act (NEPA), which, when passed, was hailed as one of the key building blocks of the modern environmental movement. When speaking about NEPA recently, President Donald Trump denounced the law. Because of NEPA, many of “America’s most critical infrastructure projects have been tied up and bogged down by an outrageously slow and burdensome federal approval process.” The “endless delays” generated by this ongoing “regulatory nightmare,” he went on, snatch jobs from “our nation’s incredible workers,” who are unable “to build new roads, bridges, tunnels [and] highways bigger, better [and] faster.” He then offered a suite of regulatory reforms for NEPA that “will reduce traffic in our cities, connect our rural communities, and get Americans where they need to go more quickly and more safely.”

His Council on Environmental Quality (CEQ) just published in the Federal Register a detailed and lengthy report that proposes a mix of substantive and procedural reforms to break the logjam. What is most notable about Trump’s proposed reforms is that they are all incremental. They try to tweak through regulation a broken statute instead of working to replace it with a sounder remedial structure, which is the only way to fix the current unsatisfactory status quo.

The key substantive changes are found in obscurely worded provisions designed to streamline the regulatory process in cases where an agency must consider the potential impact on global warming—virtually always overstated, especially for pipelines—of a new project in conjunction with similar projects undertaken elsewhere. For example, the potential emission of greenhouse gases from one pipeline has to be considered together with the potential emissions from another. The procedural reforms stress expedited deadlines and the selection of a single program manager to guide the approval process in order to avoid duplication and confusion.

Member Post

 

“There comes a time in the history of all bureaucracies when they must inevitably parody their own functions.” — Roger Zelazny How often do we see a bureaucracy that seems to be (as one of Robert Conquest’s laws of politics states) being controlled by a cabal of its enemies? I was a safety bureaucrat in […]

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Is US Innovation Getting Stuck in a Thicket of Patents?

 

If technology is advancing crazy fast, why aren’t those advances showing up in the broader productivity and economic growth numbers? Or as economists Erik Brynjolfsson, Daniel Rock, and Chad Syverson describe this mystery in their 2017 paper “Artificial Intelligence and the Modern Productivity Paradox: A Clash of Expectations and Statistics:” “Systems using artificial intelligence match or surpass human-level performance in more and more domains, leveraging rapid advances in other technologies, and driving soaring stock prices. Yet measured productivity growth has declined by half over the past decade, and real income has stagnated since the late 1990s for a majority of Americans.”

But those researchers remain optimistic. “The breakthroughs of AI technologies already demonstrated are not yet affecting much of the economy, but they portend bigger effects as they diffuse.” And one possible role for policymakers is to remove barriers to the spread of productivity-enhancing technologies when possible. Which brings us to “What Happened to US Business Dynamism?” by Ufuk Akcigit and Sina Ates. From that paper:

Market economies are characterized by the so-called “creative destruction” where unproductive incumbents are pushed out of the market by new entrants or other more productive incumbents or both. A byproduct of this up-or-out process is the creation of higher-paying jobs and reallocation of workers from less to more productive firms. The US economy has been losing this business dynamism since the 1980s and, even more strikingly, since the 2000s.

The New York Times Covers Over-regulation

 

It may not be exactly the coming of the Messiah, but seeing a front-page story in the New York Times about over-regulation certainly feels like a breakthrough of note. Titled “One Apple Orchard and 5000 Government Rules,” the story focuses on the Indian Ladder Farms apple orchard in Altamont, NY. A small, family-run business owned by Peter Ten Eyck, the farm does the bulk of its business in the fall (naturally). Their busy season includes sales to supermarkets, direct sales to consumers, visits from busloads of schoolchildren, and “pick your own” days. That’s also the time, or it was last October, when government inspectors showed up demanding to see reams of paperwork to ensure that the farm was in compliance with immigration rules, OSHA guidelines, the Fair Labor Standards Act, and other laws and regulations.

Over the course of the next several days, the family and staff had to devote about 40 hours to compiling 22 different kinds of records – everything from vehicle registrations to insurance certificates to employee time sheets. The federal rules on ladder safety alone amount to thousands of words. “It’s terribly disruptive,” Ten Eyck complains.

The accumulation of regulations year after year and decade after decade at some point breaks the camel’s back. As the Mercatus Center at George Mason University records, the sheer volume of federal regulations has more than tripled since 1970. When Nixon was president, the federal register contained 35.4 million words. By 2016, that had expanded to 104.6 million words. The King James Bible makes do with 783,137 words.

Taking a Look at the State of Trump’s Deregulation Efforts

 

When the Trump White House talks about boosting economic growth, it’s not all tax cuts, tax cuts, tax cuts. Officials also mention the administration’s ongoing deregulatory push as a big part of why Trumponomics will turn a Two Percent Economy into a Three Percent or Four Percent Economy. President Trump himself has cited deregulation as one of his biggest accomplishments so far.

But a new analysis by Bloomberg gives reason for skepticism, at least if you define “deregulation” as actually, you know, removing regulations currently in effect. Not much of that seems to be happening yet. “Only a handful of regulations have actually been taken off the books,” Bloomberg finds.

America’s Regulation Burden, in 5 Charts

 

The Obama Council of Economic Advisers ended strong, and the Trump CEA may be picking up right where they left off. The council is out with a report and literature review on regulation:

Excessive regulation is a tax on the economy, costing the U.S. an average of 0.8 percent of GDP growth per year since 1980. This taxation by regulation has increased sharply in recent years, with approximately 500 new economically significant regulations created over the last eight years alone. Through a thorough review of the literature, the Council of Economic Advisers (CEA) finds that deregulation will stimulate U.S. GDP growth.

In a Pickle Over Regulations

 

On my first trip to DC, an immigrant cabbie pointed out buildings to college-aged me. As he highlighted the Capitol, the Washington Monument, and every other building I already knew, we drove by an imposing monolith near the mall. “What’s that?” I asked. “Oh, that’s the Department of Agriculture,” he said.

As it turned out, it was just the south building of the USDA, the largest office building in the world until the Pentagon was built. Next door is the USDA’s massive Jamie L. Whitten Building, which covers four acres by itself. What on earth do they do in there? I wondered.

Well, now I know. Over the weekend, I read just one of their regulations — 23 pages dedicated to pickles. Your tax dollars paid bureaucrats to mandate that a “small gherkin” must be less than 2.4 cm in diameter, whereas a “large gherkin” can have a diameter of up to 2.7 cm.

Big Government, Public Health, and E-Cigarettes, Part III

 

This is the last in a three-part series on e-cigarettes. Part I is available here. Part II is available here.

E-cigarettes or vapor products aren’t specifically mentioned in the Tobacco Control Act. The FDA had no expressed mandate to do anything. But that isn’t stopping them from trying. If the FDA actions are not significantly changed by the administration, the Congress, and potentially the courts, FDA regulations will certainly do more to harm public health than benefit it. The nexus used by the FDA to sweep vapor products into its regulatory regime was that nicotine in the products was “tobacco derived.” Most, or all of it, is, just like the nicotine used in gums and patches. Frankly it’s cheaper to acquire nicotine from tobacco than it is to acquire it from other plants (it’s in tomatoes, eggplant, and other nightshades) or to create it in a lab. But, as regulatory agencies often do, the FDA has indicated that they will broadly exercise authority to regulate devices (that contain no nicotine and are not tobacco-derived) or zero nicotine liquids.

Most significantly, the FDA deeming rule related to these products creates an effective ban on tens (if not hundreds) of thousands of existing products. The Tobacco Control Act and subsequent FDA regulations allowed all cigarette products sold before 2007 to remain on the market so long as they complied with existing rules. Rather than allow existing vapor products to remain on the market upon publication of the deeming rule, the FDA immediately banned any new products from entering the market and will require all existing products to complete a prohibitively expensive and largely arbitrary application process, with no clear guidance from the FDA and little or no likelihood of approval.

Big Government, Public Health, and E-Cigarettes, Part II

 

This is the second in a three-part series on e-cigarettes. Part I is available here.

Vapor products contain no tobacco. They produce no smoke. Most contain nicotine and it’s the same nicotine used in FDA-approved gums and patches. While the devices look different, they all operate by heating a liquid solution (propylene glycol and/or vegetable glycerin, nicotine and flavor) to produce an aerosol. Importantly, the products allow users to replicate the act of smoking. Like smokers, vapers engage hands and mouths in a ritual similar to the one they practiced every day for many years as a smoker. Like a smoker, the vaper inhales and exhales and can both feel and see the vapor produced. But unlike cigarette smoke, the aerosol dissipates quickly. There’s no smoke, no tar, and no carbon monoxide – the things that cause half of all smokers to get sick and some to die. Nicotine doesn’t cause lung cancer or make smokers sick. As far as its heath impact, it’s comparable to caffeine. As long as you don’t consume caffeine or nicotine through smoking, most people can use it without incident for an entire adult lifetime. Nicotine also seems to bring health benefits for some.

There is little doubt that part of the consternation of tobacco control groups and regulators simply arose from the fact that products are called e-cigarettes and using them resembles smoking. That reaction is emotional, not rational. Perhaps we can appreciate that it motivates tobacco controllers to investigate further. Rather than investigate and try to understand, however, the FDA initially stepped in and attempted to shut the industry down by banning the importation of e-cigarettes as unapproved medical devices. And electronic cigarette company, NJOY (previously Sottera), was targeted by the FDA and had imported products seized at the US border. NJOY fought the federal government, ultimately winning in court.

Big Government, Public Health, and E-Cigarettes, Part I

 

Since the US Surgeon General’s report on smoking and health in 1964, governments (local, state, federal) and tobacco control groups have waged a comprehensive campaign to encourage smokers to quit and discourage non-smokers from starting. They have used every tool available with cost being of little concern.

They’ve educated about the harms associated with smoking. When that didn’t do the trick, they attempted to shock and scare smokers away from the habit with graphic images. They’re in a half-century cycle to fight for increased taxes. They’ve banned smoking anywhere people congregate. They’ve filed individual lawsuits, class action lawsuits, and lawsuits from state attorneys general (resulting in the tobacco master settlement agreement that forced tobacco companies to pay billions to the states, all costs passed on to consumers via increased prices).

They’ve restricted the ability of companies to sell and market products, restricted use of brand-name advertising and eventually they decided scaring children might discourage them from becoming smokers. They also thought sending terrified kids home to shame their smoking parents could only benefit their cause.

Ross: Trump Team Is “Up to Our Eyeballs” Finding Red Tape to Cut

 

Newly confirmed Commerce Secretary Wilbur Ross told CNBC’s “Squawk Box” that Trump’s economic advisors “are up to our eyeballs” looking for government regulations to be scrapped. From Politico:

Trump, who campaigned on an economic message of growth and job creation, has made reducing government regulation a priority in the opening weeks of his presidency. Just 10 days into his administration, the president signed an executive order mandating that for each new regulation put into effect, two others must be removed. And last week, Trump signed an order requiring federal agencies to create regulatory reform task forces.

Speaking on CNBC Friday morning, Ross said he would seek the input of business groups including the National Association of Manufacturers, the U.S. Chamber of Commerce, the National Federation of Small Businesses and others. He estimated that the Trump administration may ultimately save U.S. businesses “way into the tens of billions of dollars and very possibly approaching a hundred odd billions of dollars.”

Regulatory Reform as One Piece of the Growth Puzzle

 

I’ve grown increasingly skeptical of magic bullets, or silver bullets, or big-bang ideas to charge up the American growth machine. More likely it’s going to take lots of smaller-but-smart ideas all doing their bit to make the US more productive. That said, one area with potential is regulatory reform, as I pointed out yesterday with some encouraging comments about President Trump’s “one in, two out” executive order.

Still, just how much growth impact can be expected from regulatory reform on a number of fronts? What’s the potential here? The WSJ’s Josh Zumbrun offers a cautious, balanced take.

Broadly speaking, there are two approaches to estimating costs and benefits. A “bottom up” approach aggregates estimates for each individual regulation. A “top down” approach relies on economic modeling to show the overall effect of regulations on growth. The Office of Management and Budget already estimates the cumulative cost-benefits via an annual report to Congress. In its most recent report, OMB estimated regulatory costs of between $74 billion and $110 billion. The benefits of the regulations, however, were significantly higher: $269 billion to $872 billion. …

Trump’s “One in, Two out” Regulatory Reform Could Help Economic Growth

 

President Trump is employing what you might call the “Mad Max: Beyond Thunderdome approach” — “Two men enter, one man leaves!” — to regulatory reform, except sort of in reverse. If a new regulation is to enter the regulatory code, two must leave. Following through on a campaign pledge, Trump today signed an executive order requiring, as Reuters puts it, “that for every new federal regulation proposed, two must be revoked.”

A bit of typical Trump color on this:

This will be the biggest such act that our country has ever seen. There will be regulation, there will be control, but it will be a normalized control where you can open your business and expand your business very easily. And that’s what our country has been all about.… If you have a regulation you want, number one, we’re not gonna approve it because it’s already been approved probably in 17 different forms. But if we do, the only way you have a chance is we have to knock out two regulations for every new regulation. So if there’s a new regulation, they have to knock out two.

The Environmental Permit Menace

 

Government Red TapeThere is wide bipartisan support to take immediate steps at all levels of government to improve America’s aging and dilapidated infrastructure. The challenge of infrastructure design is to move people and goods rapidly and efficiently from one place to another, while minimizing adverse environmental impacts.

Private firms can, of course, do a great deal of the legwork in putting this infrastructure together. But private enterprise cannot do the job alone. Long and skinny infrastructure elements, like railroads, highways, and pipelines, typically require the use of the government power of eminent domain to assemble the needed parcels of land. In addition, much infrastructure has to be built across government-owned land. The cooperation of government is thus needed for the completion of these projects. And there is always the risk that any major construction project could cause serious physical damage to the larger environment.

There is a need, therefore, to balance environmental protection with efficient and cost-effective infrastructure development. But it is at this critical juncture that the environmental movement has run off the rails. The passage of the National Environmental Protection Act (NEPA) in 1969 signaled the dawn of a new era in environmental law—the age of non-stop permit-process. NEPA itself contains no substantive requirements intended to enhance overall environmental protection; but it does introduce an elaborate system of “permitting” that must be satisfied before any particular project can proceed.

Banning Hamburger: Housing Codes in America

 
shutterstock_242818684

Mulberry Street in New York City’s Little Italy, ca. 1900.

If a liberal observes that rich people are eating steak, while poor people are eating hamburgers, the obvious solution is to ban the hamburger. It sounds silly, but if you apply this rule, for example, to the minimum wage for teenagers, it all comes into focus. It is “obvious” that people should not be underpaid — and so we must forbid low-paying jobs. Steak or bust.

Tennessee Is Criminalizing Shampooing

 

shutterstock_281446382In a new column over at Forbes, Nick Sibilla from the Institute for Justice (IJ) details the case of Tammy Pritchard, whose attempt to earn a better living as a part-time shampooer in a friend’s beauty salon in Tennessee has been stymied by the state’s restrictive occupational licensing laws.

“Unfortunately for Tammy, unlicensed shampooing is a crime, punishable by up to six months in jail. The Tennessee Board of Cosmetology and Barber Examiners can also impose civil penalties as high as $1,000 for those who dare to lather, rinse and repeat without a license…

“Before she can legally wash hair at a salon, Tammy must finish 300 hours of training on “the practice and theory of shampooing.” In a course more fitting for Greendale Community College, prospective shampooers learn about the “chemistry and composition of shampoos and conditioners,” “shampooing and rinsing foreign material from hair,” and “shop management,” which covers remedial skills like “answering phone, scheduling appointments, ordering supplies.” After completing the class, shampooers then have to pass two exams, one on “theory,” the other practical, to obtain their license.”

Worried about Income Inequality? Get Government Out of the Way.

 

bureaucracyRent-seeking comes in many shapes and forms. From “Make elites compete: Why the 1% earn so much and what to do about it” by Jonathan Rothwell at Brookings:

For lawyers, doctors, and dentists— three of the most over-represented occupations in the top 1%—state-level lobbying from professional associations has blocked efforts to expand the supply of qualified workers who could do many of the “professional” job tasks for less pay. Here are three illustrations:

— The most common legal functions—including document preparation—could be performed by licensed legal technicians rather than lawyers, as the Washington State Supreme Court decided in 2012. These workers could perform most lawyer-like tasks for roughly half the cost. Unsurprisingly, legal groups opposed it. A few brave souls from the Washington State Bar Association board resigned in protest, and issued this statement:  “The Washington State Bar Association has a long record of opposing efforts that threaten to undermine its monopoly on the delivery of legal services.” Proportion of lawyers in the top 1%? 15%.

Laws Are Not Force Fields

 

shutterstock_344065673It would seem a self-evident truth that laws are not force fields. Simply creating a rule does not in and of itself change anyone’s behavior. Unenforced laws are useless. This would seem to be a strong argument in favor of only passing laws whose enforcement can be done in a practical manner, and which do not duplicate existing law.

Not so, says the Democratic Party. Whether it be their desire to emote about how much they care, even when they are powerless to do anything of consequence, or a genuine belief that they can bend human nature to their will with words alone, the result is the same. There are problems in the United States, and regardless of the specifics, the Democrats have a law ready to solve it.

The most obvious examples are gun free school zones. In order for such laws to have value, one would need to station guards at all entrances to schools, and check all who enter for weapons. Some government buildings do this, and such laws can be rational under such circumstances. Yet the notion that schools are safer when only the law abiding citizens have been disarmed is laughable. A man who has already decided to violate the most sacred of all prohibitions against murder, is certainly willing to violate your petty gun carrying laws.