Entries Tagged as 'regulation'

Would You Trust a Randian Banker?

December 5th, 2011 at 12:00 pm 42 Comments

Conservatives give a lot of deference to the opinions of business leaders and other ‘job creators’. The operating assumption is that their criticisms of White House policies are accurate and well informed. What if this assumption is largely off-base?

Consider this roundtable hosted on CNBC between Austan Goolsbee, the former Chairman of the Council of Economic Advisers, and several business executives. Pay close attention to the arguments made by John Allison, former CEO of the bank BB&T:

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Real Policy isn’t Done Through Taxes

November 2nd, 2011 at 4:20 pm 27 Comments

David Frum is right to attack the growing Republican orthodoxy that “nothing is wrong with this country that cannot be solved by abolishing the capital gains tax.” He should take the argument a little further: a fixation on taxes above everything else–regulatory policy and excellence in provision of necessary government services in particular–has done enormous damage to the conservative cause.

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‘Democracy Denied’ is the Guide to Fighting Over-Regulation

October 13th, 2011 at 12:50 am 63 Comments

Phil Kerpen’s Democracy Denied ($24.95 in hardcopy; $9.99 for Kindle) Is a none-too-long book that, if widely read (which it deserves to be) would provide something that’s absent from today’s politics: a coherent and useful agenda for the Tea Party and its fellow travelers. Kerpen’s manifesto-like book, more than anything else, aims to focus the Tea Party on the excesses of government regulation.

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At Least He Has a Job

August 21st, 2011 at 12:31 pm 21 Comments

Daniel Alexandre Protoraro has an awful summer job.  But at least he has a job. His American counterpart might not. Canada’s unemployment rate is 7.4 percent (it would be 6.2% if calculated with the American method)  America’s is 9.2 percent. And Protoraro’s own story, provides a case study as to why the U.S. unemployment rate is higher than Canada’s. Protoraro’s outbound telemarketing work doesn’t really exist in the United States.

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The GOP’s (Quiet) Wall Street Reg Rollback

March 17th, 2011 at 11:37 am 9 Comments

Republicans’ efforts to change the Dodd-Frank financial reform legislation should  offer the party a model for how it should deal with President Obama’s healthcare bill: rather than impractical, pharmacy unworkable political grandstanding, view House Republicans are offering real, substantive, and, yes, wonky, measures to fix what’s wrong with the bill.

Like the healthcare bill, Dodd-Frank attempts to confront some real problems but has serious flaws in its execution. Furthermore, as with healthcare, Congress “punted” on most specifics and has asked regulators to develop them. Unlike healthcare—where Democrats rammed their own preferred solutions down Republicans (and the nation’s) throat—perhaps 70 percent of the broad policies in Dodd-Frank represent common ground consensus measures. (The only person I have met that actually has promised to campaign for outright repeal of the bill is a Tea Party leader who also told me that the Federal Reserve is a private company owned by the Swiss. Oh.)

Thus, the legislative package Republicans are moving forward takes a serious look at the bill and aims to change its bad parts rather than taking a sledgehammer to it. Although some provisions that Republicans favor—the elimination of new credit card rules that simply transfer wealth from banks to merchants, repeal of burdensome data collection requirements—make a lot of sense, others (outright repeal of new derivatives rules) would probably cause more problems than they would solve.

Still, the overall approach of examining the law and trying to fix what’s wrong with it is a welcome move. It shows that House Republicans can, if prompted, actually get serious about governing.


New Obama Appointee Targets the SEC

September 17th, 2009 at 11:47 am 1 Comment

As President Obama gears up to increase regulation of the financial markets, online he may face opposition from an unlikely source: his own appointee to the Office of Information and Regulatory Affairs, Cass Sunstein. One of Sunstein’s big ideas is to force government agencies to extend the principle of cost-benefit analysis (CBA) in regulation to financial regulatory agencies like the SEC.

“Cass Sunstein is behind bringing the Securities and Exchange Commission under OIRA review,” stated Dr. Richard Williams, Director of the Regulatory Studies Program at the Mercatus Center, “they [the SEC] would then need to come in with cost-benefit analyses – evidence and proof that their regulations made sense, like the other executive agencies.”

The track record for cost-benefit analysis has shown that it can be devastatingly effective in cutting down inefficient and unnecessary regulations. “As CBA works out in practice, it is almost always skeptical of strong regulation,” remarked Sidney Shapiro, a Law Professor at Wake Forest University. “Cost-benefit analysis is a positive thing because without it there would be a systematic bias in favor of intervention,” added James Gattuso, a Senior Fellow in Regulatory Policy at the Heritage Foundation. In the assessment of Peter Van Doren, editor of Cato’s Regulation magazine: “If you look at the literature in economics, the things that have the highest costs in CBA are things like EPA and worker-safety regulations.”

Consequently, certain liberal groups are unhappy about the possibility that non-independent executive agencies will be made to undergo a thorough review before implementing restrictions on human activity. “The appointment [of Cass Sunstein] means that those of us expecting a revival of the protector agencies — EPA, FDA, OSHA, CPSC, and NHTSA — have reason to worry that “yes, we can” will become “no, we won’t,” remarked Rena Steinzor, the president of the Center of Progressive Reform, on the announcement of Sunstein’s nomination.

Indeed, those of the left have always tended to frown upon the use of cost-benefit analysis. Cost-benefit analysis “is an idiotic way to set standards,” asserted Frank O’Donnell, president of Clean Air Watch, “historically, the cost estimates have been too high.”

But the primary reason may be that liberals are concerned about the potential roadblock CBA poses to regulations they’d like to see passed in future. “In the past, CBA has been a tool that has been used or manipulated in a way that biases it against approving regulation,” noted Rick Melbert, Director of Federal Regulatory Policy at OMB Watch.

For economists, however, CBA is the first step toward any kind of rational decisionmaking. “People with economics training automatically think of CBA as an appropriate tool. Critiques of CBA often come from activists without formal training,” commented Peter Van Doren, “cost-benefit analysis is an exercise in everyday economic decisions. Say you go to the store to buy some orange juice. If the benefits of drinking orange juice are greater than the cost of buying it, then you’ll do it.” Similarly, executive agencies that propose regulations must weigh the costs and benefits of a regulation before OIRA approves it.

“It is an essential part of public policy,” opined James Gattuso, a Senior Fellow in Regulatory Policy at the Heritage Foundation, “You can’t make intelligent decisions as to whether a policy is good or bad until you have all the available information as to what the costs and the benefits are.”