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OpenMarket: Regulatory Reform

  • CEI's Battered Business Bureau: The Week in Regulation

    February 23, 2015 7:26 AM

    In a very cold, holiday-shortened week, federal agencies issued 40 final and 33 proposed regulations covering everything from lithium-ion batteries to small fish in Oregon.

    On to the data:

    • Last week, 40 new final regulations were published in the Federal Register, after 57 new regulations the previous week.
    • That’s the equivalent of a new regulation every four hours and 12 minutes.
    • So far in 2015, 351 final regulations have been published in the Federal Register. At that pace, there will be a total of 2,581 new regulations this year, which would be roughly 1,000 fewer rules than the usual total.
    • Last week, 1,118 new pages were added to the Federal Register, after 1,341 pages the previous week.
    • Currently at 9,353 pages, the 2015 Federal Register is on pace for 68,772 pages, which would be the lowest page count since 1992.
    • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Three such rules have been published so far this year, none in the past week.
    • The total estimated compliance cost of 2015’s economically significant regulations is $630 million for the current year.
    • Twenty-nine final rules meeting the broader definition of “significant” have been published so far this year.
    • So far in 2015, 75 new rules affect small businesses; nine of them are classified as significant. 
  • How to Help Tesla and Taxpayers

    February 20, 2015 12:59 PM

    Policies aimed at reducing auto emissions in California and 10 other states are having a troubling set of unintended consequences, according to a recent editorial at Bloomberg View. Editors point out that the “zero-emissions” credits program ends up amounting to a subsidy for electric carmaker Tesla Motors of up to $30,000 per car sold, penalizing the buyers of nonelectric vehicles who end up underwriting the purchase of someone else’s $100,000 Model S. In addition, electric cars may not even be much “greener” than their nonelectric counterparts, when one considers the time of day these cars are charged as well as the source of the electricity—in many parts of the country, exchanging a conventional vehicle for an electric one means trading a gasoline-powered car for one powered by coal.

    The Bloomberg editors, unfortunately, suggest solving the problem with two even worse policies: stricter fuel economy standards and a carbon tax. Perhaps if they had read this post by my colleague Richard Morrison, they might also consider a free market approach to the auto industry. Richard suggests treating Tesla fairly by ending both the apparent war against their retail strategy of selling directly to consumers (or owning their own dealerships), as well as eliminating the huge tax subsidies being offered by states like Nevada and New York. If Tesla makes cars that are as awesome as they are made out to be, then surely the company will find consumers who want to drive them—without having to pick their neighbors’ pockets.

  • Does Regulation Hurt Innovation?

    February 19, 2015 2:12 PM

    How much does regulation crimp innovation? Not very much, according to a new study from the U.S. Census Bureau’s Nathan Goldschlag and George Mason University’s Alex Tabarrok. They find that “Federal regulation has had little to no effect on declining dynamism.” In other words, fewer businesses are starting up today than in previous years, but the authors don’t think federal regulations are among the major causes (see also Tabarrok’s summary over at Marginal Revolution).

    That said, the authors are unsure of what else might be responsible: “The subsequent analysis will be unable to address the declining share of employment for young firms as evidence for the secular decline in dynamism and entrepreneurship (p.9).”

    They base their regulation exoneration on a dataset called RegData, put together by analysts at the Mercatus Center (disclosure: one of whom is a former professor of mine). It is the best dataset yet devised for quantifying federal regulatory burdens. I’ve cited it before in some of my own work, and will very likely do so again. RegData works by counting the number of times the terms “shall,” “must,” “may not,” “prohibited,” and “required” appear in the Code of Federal Regulations. These individual restrictions are then broken down by industry and over time, going back to 1997. The total number of such restrictions currently in effect is more than one million.

    But RegData has limits, and Goldschlag and Tabarrok have exceeded them. RegData counts the number of burdens, but does not estimate how much each one costs. These costs are over the map. One “shall” burden may be nearly costless, such as requiring a business to post a notice of local labor practices in the break room. Given the cost of printing posters and the minute or two of staff time required to hang it up every year, this may or may not cost a business a dollar per year. Another “shall” requiring power plant scrubbers may cost billions of dollars per year. Even though those rules both count as one restriction, they have very different costs.

    RegData is state-of-the-art. But the art needs to improve its state before one can convincingly argue that the Code of Federal Regulations doesn’t harm economic dynamism.

  • CEI's Battered Business Bureau: The Week in Regulation

    February 16, 2015 9:42 AM

    In a week like any other, regulatory agencies issued more than 50 new rules covering everything from from rockfish to wine.

    On to the data:

    • Last week, 57 new final regulations were published in the Federal Register, after 59 new regulations the previous week.
    • That’s the equivalent of a new regulation every two hours and 57 minutes.
    • So far in 2015, 311 final regulations have been published in the Federal Register. At that pace, there will be a total of 2,592 new regulations this year, which would be roughly 1,000 fewer rules than the usual total.
    • Last week, 1,341 new pages were added to the Federal Register, after 1,445 pages the previous week.
    • Currently at 6,885 pages, the 2015 Federal Register is on pace for 68,850 pages, which would be the lowest page count since 1992.
    • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Three such rules have been published so far this year, one in the past week.
    • The total estimated compliance cost of 2015’s economically significant regulations is $630 million for the current year.
    • Twenty-seven final rules meeting the broader definition of “significant” have been published so far this year.
    • So far in 2015, 67 new rules affect small businesses; seven of them are classified as significant. 
  • CEI's Battered Business Bureau: The Week in Regulation

    February 9, 2015 10:39 AM

    Last week’s batch of new rules covered everything from fluorescent lights to postage rates.

    On to the data:

    • Last week, 59 new final regulations were published in the Federal Register, after 77 new regulations the previous week.
    • That’s the equivalent of a new regulation every two hours and 51 minutes.
    • So far in 2015, 254 final regulations have been published in the Federal Register. At that pace, there will be a total of 2,540 new regulations this year, which would be roughly 1,000 fewer rules than the usual total.
    • Last week, 1,445 new pages were added to the Federal Register, after 1,583 pages the previous week.
    • Currently at 6,885 pages, the 2015 Federal Register is on pace for 68,850 pages, which would be the lowest page count since 1992.
    • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Two such rules have been published so far this year, none in the past week.
    • The total estimated compliance cost of 2015’s economically significant regulations is $630 million for the current year.
    • Twenty-one final rules meeting the broader definition of “significant” have been published so far this year.
    • So far in 2015, 54 new rules affect small businesses; five of them are classified as significant. 
  • CEI's Battered Business Bureau: The Week in Regulation

    February 2, 2015 6:49 AM

    Regulators stepped up their pace last week, with nearly 80 regulations covering everything from defibrillators to Korean oranges.

    On to the data:

    • Last week, 77 new final regulations were published in the Federal Register, after 40 new regulations the previous week.
    • That’s the equivalent of a new regulation every two hours and 11 minutes.
    • So far in 2015, 195 final regulations have been published in the Federal Register. At that pace, there will be a total of 2,438 new regulations this year, which would be far less than the usual total.
    • Last week, 1,583 new pages were added to the Federal Register, after 1,271 pages the previous week.
    • Currently at 5,440 pages, the 2015 Federal Register is on pace for 64,284 pages, which would be the lowest page count since 1992.
    • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Two such rules has been published so far this year, one in the past week.
    • The total estimated compliance cost of 2015’s economically significant regulations is $630 million for the current year.
    • Nineteen final rules meeting the broader definition of “significant” have been published so far this year.
    • So far in 2015, 41 new rules affect small businesses; five of them are classified as significant. 
  • CEI's Battered Business Bureau: The Week in Regulation

    January 26, 2015 7:22 AM

    Even in a shortened work week due to Martin Luther King Day, federal agencies still put out 40 final regulations and more than 50 proposed regulations, covering everything from pet stores to drywall.

    On to the data:

    • Last week, 40 new final regulations were published in the Federal Register, the same number as the previous week.
    • That’s the equivalent of a new regulation every four hours and 12 minutes.
    • So far in 2015, 118 final regulations have been published in the Federal Register. At that pace, there will be a total of 1,967 new regulations this year, which would be far less than the usual total.
    • Last week, 1,271 new pages were added to the Federal Register.
    • Currently at 3,857 pages, the 2015 Federal Register is on pace for 64,284 pages, which would be the lowest page count since 1992.
    • Rules are called “economically significant” if they have costs of $100 million or more in a given year. One such rule has been published so far this year, none in the past week.
    • The total estimated compliance cost of 2015’s economically significant regulations is $477 million for the current year.
    • Twelve final rules meeting the broader definition of “significant” have been published so far this year.
    • So far in 2015, 21 new rules affect small businesses; four of them are classified as significant. 
  • President Obama Says We’ve “Turned the Page” – Really?

    January 23, 2015 12:12 PM

    In previewing his 2015 State of the Union Address, President Obama said … "2014 was the fastest year for job growth since the 1990s. Unemployment fell faster than any year since 1984."

    In fact, the President opened the 2015 Address, asserting that America was “turn[ing] the page.”

    Others see things very differently. Growth emerging from a painfully low baseline is not turning a page. Unemployment is “down” because statistics omit those who’ve given up looking for work. Over 92 million Americans are not working.

    Labor force participation sits at a 36 year low, with nearly 12 million having dropped out during the Obama administration. Data point to high debt per capita, the highest part-time and temporary-job creation rates. A popular blog laments the “slow death of American entrepreneurship

    Headlines tell painful tales. Investor’s Business Daily in January 2015 reports on businesses dying faster than they’re being created, something the Washington Post had noted in 2014. Likewise a Brookings study on small business formation noted declining rates, as did a Wall Street Journal report on business ownership rates among the young.

    And if businesses aren’t being created, neither are jobs. One recruiter described to the Wall Street Journal how regulations impact jobs, while others point to an inverse correlation between regulation and innovation. And the anecdotes parallel the statistics. In food service, regulations are driving restaurants out of business and even sending them abroad.

  • CEI’s Battered Business Bureau: The Week in Regulation

    January 19, 2015 1:00 PM

    It was another slow week with just 40 new final regulations and 37 proposed regulations, but new rules still cover everything from solid waste to washing machines.

    On to the data:

    • Last week, 40 new final regulations were published in the Federal Register.
    • That’s the equivalent of a new regulation every four hours and 12 minutes.
    • So far in 2015, 78 final regulations have been published in the Federal Register. At that pace, there will be a total of 1,773 new regulations this year, roughly half the usual total.
    • Last week, 1,119 new pages were added to the Federal Register.
    • Currently at 2,586 pages, the 2015 Federal Register is on pace for 58,773 pages, which would be the lowest page count since 1992.
    • Rules are called “economically significant” if they have costs of $100 million or more in a given year. One such rule has been published so far this year, none in the past week.
    • The total estimated compliance cost of 2015’s economically significant regulations is $477 million for the current year.
    • 8 final rules meeting the broader definition of “significant” have been published so far this year.
    • So far in 2015, 13 new rules affect small businesses; 4 of them are classified as significant.

    Highlights from selected final rules published last week:

  • Free to Prosper: Top Priorities for the 114th Congress

    January 14, 2015 9:29 AM

    With the start of the 114th Congress comes a fresh opportunity to address the challenges created by a broken government. To kick off this new congressional session, the Competitive Enterprise Institute (CEI) recommends numerous reform proposals to strengthen the U.S. economy, increase transparency, and foster fair and open competition instead of favoring special interests.

    CEI’s top policy proposals center on substantive regulatory reforms needed to improve America’s economic health. In 2014 alone, 3,541 new regulations hit the books, and the burden is constantly growing. If federal regulations were a country, their cost would amount to the world’s 10th largest economy.  

    In addition to reining in burdensome regulations, CEI recommends that Congress continue to conduct fundamental oversight to protect Americans from executive overreach. Over the last six years, federal agencies have sought to usurp power from the legislative branch. Congress has a responsibility to demand honesty and accountability from our leaders and defend the rule of law.

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