Economist Tyler Cowen On Why Too Much Regulation Is A Problem -- And Should Be For People Right And Left
George Mason econ prof Cowen writes in The New York Times:
Conservatives typically complain about too much regulation, but liberals should be concerned, too, because pruning away rules we don't need should help usher in an economy with more job creation and stronger economic growth.The total number of federal regulatory restrictions is now more than one million. And they're not all necessarily good ideas. For instance, the Food and Drug Administration has banned some useful asthma treatments because they have a slight negative impact on the ozone layer. The nation has medical-device regulations that take longer to satisfy than those of the European Union.
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.
...We don't really know the total regulatory burden in our economy today, in part because there are too many rules and side effects to add up all the costs. Nonetheless, we are continually increasing the obstacles to doing business. America has lost the robust productivity growth of much of the postwar era, and the share of start-ups in the economy has been falling each decade since the 1980s. Although overregulation is hardly the only culprit, it is very likely contributing to the problem.
The point isn't that we should eliminate all regulation or give up on clean air and water. In fact, we may need tougher guidelines -- albeit simpler ones -- to govern what is permissible for activities like financial risk-taking or burning coal. Still, a paring back of regulation in many areas, based on clearer priorities, seems in order.
"For instance, the Food and Drug Administration has banned some useful asthma treatments because they have a slight negative impact on the ozone layer"
Yes, that is part of the problem; many who favor "government oversight" think that they are helping - this ban because of the "slight" impact has a LARGE impact on me with controlling my asthma.
I'd love for any of those idiots to stop breathing for just a couple of seconds like they were having an asthma attack and see what they think then.
Charles at November 19, 2013 6:52 AM
Oh, but how to unravel what must be a real mare's nest of regulations, exceptions, favors, and penalties? Some observations and questions:
- Each regulation represents a quantum of power for some federal or state agency. Can these regulations be reviewed or eliminated without a fight?
- I would imagine (without having actually looked) that some regulations are redundant (being controlled by more than one agency), or contradictory. Somebody's fiefdom is going to be violated.
- Simplifying the regulatory scheme will result in somewhat smaller federal agencies, with personnel and facilities strewn throughout the Congressional districts losing their jobs. Remember, even the most anti-military representative will squawk like hell if you try to close an Army base in his or her district. How will our elected representatives react when their constituents are threatened?
- Trying to untangle or rationalize this mess will open one up to charges that he or she is against all regulation, which suggests that only a bipartisan approach will work. Can we get House and Senate Democrats and Republicans to work together on this? Will they even want to?
Just food for thought, anyway.
Old RPM Daddy (OldRPMDaddy at GMail dot com) at November 19, 2013 7:47 AM
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