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How to Spot a #NeverNeeded Regulation

Not every regulation on the books is directly harming the COVID-19 response. There are a lot of other regulations that need reform, but the #NeverNeeded set deserves urgent action. To help policy makers identify which regulations are the most pressing, the Competitive Enterprise Institute has prepared the following guide:

A regulation is #NeverNeeded if:

It slows distribution of proven medical diagnostic tests and devices. Regulations such as trade barriers and Buy American provisions raise prices at a time of distress and keep needed equipment out of the country. At the same time, lengthy permits and approvals for factories switching over to making medical equipment such as masks, ventilators, and tests mean that first responders sometimes have to make do without lifesaving equipment or personal protection.

It blocks patients’ remote access to medical providers. Telemedicine was highly restricted until regulators realized how serious the coronavirus pandemic would become. Medical professionals have also traditionally been banned from practicing across state borders—even though human anatomy does not vary from state to state. Such rules keep doctors out of virus hotspots where they are most needed. Many such regulations have already been eased. They must now be permanently repealed.

It increases the cost of energy at a time when Americans can least afford it. People have bills to pay, and with unemployment potentially reaching record levels, not everyone can afford green mandates and other regulations that raise people’s energy bills. A recent easing of fuel economy standards is a good start.

It makes it more difficult to hire employees. A new National Bureau of Economic Research study finds that the higher a minimum wage is, the more often people dodge it. Virginia Governor Ralph Northam is also seeking to delay a minimum wage increase in that state. California should repeal its AB5 bill that makes it harder for people to work as independent contractors. Not only are many such jobs readily available during a time of social distancing, but many contractors can work from home and away from contagion. Many occupational licenses at the state and local level keep willing workers out of work so incumbents can limit the number of their competitors.

It adds another layer of bureaucracy or complexity to legal compliance. A good rule of thumb for public policy is that simplicity is beautiful. If regulators are after a certain result, they should give people as much flexibility as they can in how they achieve that result. During the current crisis, complexity and bureaucracy also cost time. Time is a luxury we do not have. If someone has a way to help, they should be allowed to do so. Factories around the country are retooling as fast as possible to make emergency supplies. Distilleries are making sanitizer. Clothing companies are making masks. The Evans drumhead company is making face shields. The Gates Foundation is spending billions of dollars to speed up coronavirus vaccine development and mass distribution. In many cases, regulations are stopping these helpers from doing all that they could. These range from denaturing requirements for sanitizer alcohol to state and local permit regimes to the Food and Drug Administration’s lengthy approval process.

It blocks access to capital for consumers or businesses. Crowdfunding is a useful tool for keeping small businesses afloat. Due to regulations, many such campaigns have to be done informally, in person, or via a social media campaign. Crowdfunding through more formal channels, such as banks or financial institutions, could be cheaper in many cases for the business and less risky for the investors. Regulations should not prevent this. Other regulatory caps and conditions on loans are just as harmful, as are other regulations similar to the Obama-era Operation Chokepoint, which prevent many small businesses from even having bank accounts, let alone access to loans and other capital. John Berlau has more on this.

If a regulation fits any of these categories, it was probably #NeverNeeded in the first place. Quickly removing these rules would help keep people safe, and make virus-related economic distress less painful. Going forward, it is also important to reform the regulatory process itself. If that system remains in place, new #NeverNeeded rules will continue to be enacted indefinitely, harming future crisis responses. CEI has some ideas for that, too. For more, see neverneeded.cei.org, our recent #NeverNeeded paper, and the #NeverNeeded hashtag on Twitter.