A serious effort to reach out to job-creating businesses and stimulate economic growth or a political move now that the road to change in Congress is much less friendly? Reactions to President Obama’s call for reviewing federal health and safety regulations that might be too burdensome on business vary from those two camps to a few areas in between.
Two different perspectives, first from the Competitive Enterprise Institute, which has its doubts; second a CNBC analysis, which indicates the results might be surprising. As always, we’re interested in your take.
This executive order is hardly a war on red tape, and no affected businesses or consumers are going to be able to sue anybody to force compliance — it’s just an “order” to agencies to behave, says CEI’s Wayne Crews.
Actually confronting regulation, the crippling extent of which remains unappreciated by both parties, requires going far beyond the words of an executive order. Some options include:
- Implement a bi-partisan “Regulatory Reduction Commission” to vote up or down annually on a package of rules to eliminate.
- Institute a moratorium or freeze on regulatory rulemaking now.
- Hold hearings on Sen. Mark Warner’s (D-VA) “one-in, one-out” requirement for any new rule.
- Rediscover federalism, that is, circumscribe the federal regulatory role regarding health and safety matters best left to states.
- Enlarge regulatory flexibility and exemptions for small business.
- Establish an annual Presidential address or statement on the state of regulation and its impact on productivity and GDP.
- Sunset regulations after fixed period unless explicit reauthorization is made.
- Implement a supermajority requirement for extraordinarily costly mandates.
As for CNBC.com, Senior Editor John Carney writes:
NBC news reports that the efforts will be run out of Cass Sunstein’s office inside the Office of Management and Budget. That’s hardly surprising. The entire op-ed reads as if Sunstein had a large role in authoring it. He’s long been an advocate of cost-benefit analysis of government regulation.
It’s important to note that in Sunstein’s interpretation, cost-benefit analysis does not have the implicitly libertarian outcomes that the leftist critics and some free market types expect. Indeed, it could be that both the critics and friends of this new executive order will be surprised.
Sunstein’s cost-benefit analysis, for instance, could well be used to support greater regulation of hedge funds or a stronger version of the Volcker Rule by pointing to the relatively modest costs involved and the potential costs of possible systemic risks. In advance of actually doing the cost-benefit analysis, we cannot know if any particular regulation will pass muster.
I suspect that in actual operation, we’ll discover that Sunstein-ian cost-benefit analysis is modestly pro-regulation. Especially when regulators are allowed to include vague things such as how a regulation impacts on equity, this kind of “watch the consequences” analysis is pretty open-ended and far more subjective than it might seem.