Archive for the ‘#administrativestate’ Tag

$3000 more income per year   Leave a comment

Regulation under the Last Six Presidents

That last figure represents reduced regulatory costs of $23 BILLION by eliminated hundreds of burdensome regulations.

This represents a fundamental change in the direction of the administrative state after decades of unchecked growth.

For contrast, the Obama administration imposed more than $245 billion in regulatory costs on American businesses and families during its first two years.

The benefits are lower consumer prices and more jobs.

But is it safe to reduce regulation like that?

The questions we should be asking are:

What is the problem this regulation is trying to fix?

The answer to that question should be

Unless otherwise required by law, we move forward with regulation only when we can identify a serious problem or market failure that would be best addressed by federal regulation. President Bill Clinton recognized that “the private sector and private markets are the best engine for economic growth.”

Let’s look at some new research from the Council of Economic Advisers, which estimates the added growth and the impact of that growth on household income.

  • Before 2017, the regulatory norm was the perennial addition of new regulations.
  • Between 2001 and 2016, the Federal government added an average of 53 economically-significant regulations each year.
  • During the Trump Administration, the average has been only 4.

Even if no old regulations were removed, freezing costly regulation would allow real incomes to grow more than they did in the past, when regulations were perennially added. The amount of extra income from a regulatory freeze depends on (1) the length of time that the freeze lasts and (2) the average annual cost of the new regulations that would have been added along the previous growth path.

…In other words, by the fifth year of a regulatory freeze, real incomes would be 0.8 percent (about $1,200 per household in the fifth year) above the previous growth path.

As shown by the red line, removing costly regulations allows for even more growth than freezing them. As explained above, the effect, relative to a regulatory freeze, of removing 20 costly Federal regulations has been to increase real incomes by 1.3 percent. In total, this is 2.1 percent more income—about $3,100 per household per year—relative to the previous growth path.

Even modest improvements in growth lead to meaningful income gains over time.

Posted July 5, 2019 by aurorawatcherak in economics

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Culture of Denial   Leave a comment

To address a problem requires the admission of a problem. That’s an AA maxim that has broad application in the world. Rick, my cousin who is a doctor, says you can’t really treat an illness until you’ve diagnosed it.

A second AA maxim is that if you keep doing the same thing over and over again while expecting different results, you’re making yourself crazy.

Image result for image of the regulatory stateStarting about 100 years ago – a little longer in Europe – western democracies bought into the idea that the private sector was bad. Left to its own devices, it would pillage the population – creating a privileged few who could set prices and wages for everyone else. The liberal order – whereby elected officials ran the government with the assistance of workers who left office when they did – made this all the more probable. What was needed, they insisted, was a professional bureaucracy of experts in various fields who were sheltered from political upheaval and would remain in place from one administration to the next. These enlightened nonpartisans could assure the health, safety, economic prosperity and general order of society and leave the private individual free to do whatever they could conceive … so long as what they conceived didn’t interfere with the functioning of the government bureaucracy, of course.

And, for a while, that worked. It took 50 years or so for budgets and work forces to grow to the place where they began to eat the private sector and leave us all frustrated with the size, scope and generally ineffectualness of the government.

Now, populists on both side of the political divide have grown frustrated with the political, economic and cultural status quo, frustrated with the policy choices that have made their lives less prosperous and less secure. The establishment keeps insisting that these people are wrong … just look at all the great government benefits you can apply for. Don’t worry that there are no jobs. You don’t need to even get out of bed in the morning.

And, the establishment wonders why people don’t want to listen to them? Really?

While that might sound like a great life style to a few people raised in a life of leisure, for most people that sounds like torture. There is nothing quite so undignified as an adult whose bills are being paid by someone else and we instinctively know that, which is why the most self-sufficient of us — rural dwellers — rail so loudly against welfare even when they qualify for it … because they don’t want to have their dignity stripped from them. They’d rather work hard for less money than sit on their butts waiting for their government check.

Plus, it turns out that being hard working actually improves our life expectancy.

The populists on both sides of the political divide are demanding change, but after a century of being educated to believe the private sector is bad and the public sector can fix that, they suffer from cognitive dissonance. They want to upend the elitist structure that doesn’t listen to them (noble goal), but then they demand programs that assure that government will continue growing and failing as it grows.

Under the progressive elite, the democratic countries asked too much of government while crowding out civil society and constraining market forces. Now we find ourselves in the inevitable doldrums inherent in a centrally planned society and we demand government “fix” that which it caused.

Unfortunately, while the populists have the right diagnosis, they believe the public school rhetoric that the private sector is bad and must be controlled by the public sector. So, upon finding they have been poisoned, they ask for more poison to counteract its effects.

The solution?

There are no easy answers for uprooting a Siberian pea hedge and, make no mistake, the US government is well-entrenched. To some degree, this can be addressed by us all engaging in rigorous comparative institutional analysis with a willingness to make substantive changes. The world won’t end if we go from 15 bureaucracies to oversee the “environment” that are all Congressionally-created non-Executive branch agencies that receive almost zero oversight to a single agency answerable to the President and cabinet. Yeah, some people will lose their jobs and budgets might be reduced … why is that a problem? I fail to see a downside for ordinary Americans.

Maybe we can look at the labyrinthine mess that is medical-care regulation and see if reducing some of the burden on providers might result in lower prices in the marketplace. No, people probably won’t die if they can buy insurance from Connecticut that is useable in Alaska … kind of like we do with car insurance now. I have better coverage now than I did 30 years ago for slightly less than my premium was in 1981 when Alaska had only two authorized car insurance dealers.

If someone with more time than I have was willing to go through the regulatory state and demand that each and every agency justify its existence and the efficacy of every one of its regulations, we might find that we could shrink government considerably with absolutely no loss of life quality.

So what are we afraid of? Oh, yeah — ourselves and the idea that we are the solutions we’ve been seeking.

 

A Reverse Legacy   Leave a comment

Every president since Jimmy Carter has promised to cut regulation. Carter lied and so did the others. Even President Obama’s early executive orders promising to cut red tape and improve the flow of the regulatory process sounded impressive until six of the seven all-time-high years for federal regulation occurred during his tenure. Obama lied too.

Image result for image of regulatory rollbackWe’ve experienced four decades of nonstop growth in federal regulation. The U.S. Code of Federal Regulations is more than 175,000 pages long, having grown steadily since the 1970s.

Understand that federal regulations aren’t just words on paper. Those 175,000+ pages include more than one million commandments from Washington in the form of restrictive words such as “must,” “cannot,” or “shall.”

Candidate Trump promised to change that and Prresident Trump’s first 100 days give us reason to hope this trend is about to change. President Trump has already issued two executive orders on regulatory reform that informed executive branch agencies that regulatory restrictions on businesses will not be able to keep growing on autopilot. Trump’s hiring freeze will also help lower the rate of new regulations. As research from the Mercatus Center has shown, there is a high correlation between the number of employees at an agency and the number of regulations issued by that agency. President Trump has also taken advantage of the Congressional Review Act, which gives Congress the power to overturn recently finalized regulations through a simple majority vote. He has signed at least 13 such repeals. (By the way, this tool had been successfully used only once in its 20-year history.)  I doubt he’ll be able to keep his lofty promise to cut regulation by 75% or more, but just halting the growth in federal regulations would be a massive achievement.

The president has several methods available to him to accomplish this. Moving into the next phase of his first term, there are three main legislative solutions that President Trump can use to follow through on his promises to cut regulation. These solutions address the accumulation of old regulations, the creation of costly new regulations, and the lack of public participation in the regulatory process.

Get rid of outdated, ineffective regulations.

Both the Regulatory Improvement Act and the SCRUB Act create a “Regulatory Improvement Commission” to come up with a package of older regulations to eliminate that would then go through Congress for an up-or-down vote. Focusing on older regulations would take some of the politics out of regulatory reform, and voting on a large package in this way would limit the ability of established interests to interfere with the process. Because figuring out what regulations to cut requires weighing costs and benefits, addressing regulatory accumulation also requires that proposed federal regulations undergo basic cost-benefit analyses. Currently, most regulations coming from Washington are never subjected to this commonsense test. Don’t believe me. In 2014, only 16 of the 3,500+ rules published in the Federal Register underwent cost analyses. Since 2001, fewer than three out of every 1,000 regulations have had an accompanying cost-benefit analysis. The resulting lack of information creates an incomplete picture of the total regulatory burden on the economy.

 

Slow the nonstop growth in new, costly regulations.

While a regulatory improvement commission would help lower the economic drag from decades of regulatory accumulation, we really need to reverse the destructive effects that the autopilot nature of federal regulation has on the economy. Federal regulations cost the economy $1.9 trillion each year, which comes out to about $15,000 per U.S. household. The Trump administration could begin to turn the tide by supporting the REINS Act, which would give Congress authorization for voice approval or override within 70 days if a major regulation with more than $100 million in annual economic costs is to take effect. This would invert the current system, under which regulations take effect unless Congress takes the time to stop them. To understand this dynamic, recognize that there have been 29 times more regulations issued by agencies than laws passed by Congress since 2009. The REINS Act has overwhelming support from Republicans, and it has already passed the House. President Trump could have a chance to sign it into law before the year is over.

 

Infuse unprecedented transparency into the regulatory process.

To further strengthen his opposition to runaway executive-agency powers, President Trump can encourage Congress to consider legislation such as the Regulatory Predictability for Business Growth Act, which was introduced in 2015 but did not pass. This bill would require agency interpretations that are in effect for longer than a year to go through the general notice and comment provisions required under the Administrative Procedure Act. Administrators’ interpretations are meant only to provide guidance for complying with existing regulations, so they are considered exempt from the full regulatory-review process required under the Administrative Procedure Act. Agencies increasingly use blog posts, press conferences, and guidance documents to substantially alter the meaning of existing regulations. Returning agency interpretation to its proper role as guidance rather than lawmaking would help reintroduce public participation and openness into the regulatory process. And, if President Trump is seeking a legacy, this change will last long after he has left office.

Excessive regulation holds back the United States’ economic potential. President Trump appears to understand that dramatic reforms to the regulatory state are required to overcome the sluggish economy he has inherited. Fixing the regulatory system so that it no longer drags on the economy will certainly take longer than 100 days, but President Trump is off to a nice start.

Obama Spying on Trump?   1 comment

Image result for image of edward snowdenUm, of course Trump Tower was wiretapped by the Obama administration. Thanks to Edward Snowden, we all know that we’ve all been wiretapped. Big Brother is watching us. Obama is responsible for that because he knew the program existed and, “constitutional scholar” that he isn’t, he did nothing to protect the people from this intrusive program that spies on all of us. Was candidate Trump specifically targeted? Well, he was Hillary Clinton’s opponent and Obama definitely wanted Clinton to win, so …. Once you start something like this, it becomes very easy to justify its extension in support of your own goals. Power corrupts. Absolutely power corrupts absolutely. Presidential power is absolute power.

When is President Trump going to announce the end of spying on Americans?

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