Aug. 23, 2011
It seems that many observers have come to the conclusion that the regulatory state is wildly out of control. Today, Senator John Barrasso pointed out in a Washington Times column that President Obamas regulatory review has only caused one regulation to nullified. It was an EPA rule that treated spilled milk like an oil spill. Barrasso also noted that since the start of the year, the administration has proposed 340 regulations at a cost of more than $65 billion to job creators. He then points to two rulemakings that will be incredibly costly: 1) the first is an EPA rule targeting utility companies; 2) the second is literally unprecedented and regulates mileage for medium- and heavy-duty trucks. Looming in the distance is EPAs ozone rule which will be the single most environmental regulation in history. Needless, to say jobs will be lost, businesses destroyed, wealth annihilated, and families crushed economically as no jobs are created.
Next to Barrassos is a column by Richard Rahn who offers a suggestion for a statutory change that might help. He argues that before any regulation (not just major ones) is promulgated by any government department (including theIRS) or independent agency, the department or agency must have done a competent, complete and independent cost-benefit study. His proposal also contains an innovative proposal for allowing the public to sue and stop a regulation if they can show that its costs exceed its benefits.
If we are going to curb the excesses of the regulatory state we are going to have to many more ideas like Rahns (i.e., aggressive, non-deferential to agencies), but the most important steps we can take are to repeal the statutes that give sweeping regulation-making powers to government.
Economic policy has been measured in terms of consumption, government spending, investment, and monetary policy for many years. We have reached the point where more precise measures of regulatory burden are going to need to be developed and added to this mix if we are to have an accurate idea of the nations true level of economic activity and potential for growth.