CEI’s Battered Business Bureau: The Week in Regulation

New rules published in the last week include everything from the IRS and Executive Office of the President declaring themselves exempt from select transparency laws, to requirements for observing sea turtles.

On to the data:

  • Last week, 68 new final regulations were published in the Federal Register, after 60 new regulations the previous week.
  • That’s the equivalent of a new regulation every two hours and 28 minutes.
  • So far in 2015, 616 final regulations have been published in the Federal Register. At that pace, there will be a total of 2,852 new regulations this year, which would be nearly 1,000 fewer rules than the usual total.
  • Last week, 1,157 new pages were added to the Federal Register, after 1,242 pages the previous week.
  • Currently at 15,133 pages, the 2015 Federal Register is on pace for 70,061 pages.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Six 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 ranges from $693 million to $746 million for the current year.
  • 59 final rules meeting the broader definition of “significant” have been published so far this year.
  • So far in 2015, 127 new rules affect small businesses; 21 of them are classified as significant.

Highlights from selected final rules published last week:

The Social Security Administration is revising its rules for providing evidence of disability for people seeking disability benefits.

For more data, see Ten Thousand Commandments and follow @10KC and @RegoftheDay on Twitter.

Slow News Day

Politico: Ted Cruz: I didn’t terrify 3-year-old girl

CEI’s Battered Business Bureau: The Week in Regulation

An otherwise slow week ended with a bang on Friday, with 27 new regulations, or nearly half the week’s total, covering everything from calorie counts to gas vapors.

On to the data:

  • Last week, 60 new final regulations were published in the Federal Register, after 72 new regulations the previous week.
  • That’s the equivalent of a new regulation every two hours and 48 minutes.
  • So far in 2015, 548 final regulations have been published in the Federal Register. At that pace, there will be a total of 2,796 new regulations this year, which would be nearly 1,000 fewer rules than the usual total.
  • Last week, 1,157 new pages were added to the Federal Register, after 1,242 pages the previous week.
  • Currently at 13,467 pages, the 2015 Federal Register is on pace for 68,710 pages.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Five 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 ranges from $647 million to $700 million for the current year.
  • 55 final rules meeting the broader definition of “significant” have been published so far this year.
  • So far in 2015, 111 new rules affect small businesses; 19 of them are classified as significant.

Highlights from selected final rules published last week:

For more data, see Ten Thousand Commandments and follow @10KC and @RegoftheDay on Twitter.

CEI’s Battered Business Bureau: The Week in Regulation

The Supreme Court heard oral arguments on the King v. Burwell case last week. The decision, likely to appear in June, will determine in part whether regulatory agencies are allowed to rewrite legislation passed by Congress. Other than that, it was business as usual, with new regulations covering everything from 15 EPA rules to school lunches.

On to the data:

  • Last week, 72 new final regulations were published in the Federal Register, after 65 new regulations the previous week.
  • That’s the equivalent of a new regulation every two hours and 20 minutes.
  • So far in 2015, 488 final regulations have been published in the Federal Register. At that pace, there will be a total of 2,542 new regulations this year, which would be roughly 1,000 fewer rules than the usual total.
  • Last week, 1,242 new pages were added to the Federal Register, after 1,715 pages the previous week.
  • Currently at 12,310 pages, the 2015 Federal Register is on pace for 69,944 pages.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Five 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 ranges from $647 million to $700 million for the current year.
  • 48 final rules meeting the broader definition of “significant” have been published so far this year.
  • So far in 2015, 108 new rules affect small businesses; 17 of them are classified as significant.

Highlights from selected final rules published last week:

For more data, see Ten Thousand Commandments and follow @10KC and @RegoftheDay on Twitter.

CEI’s Battered Business Bureau: The Week in Regulation

The FCC, inspired by a law passed in 1934, unveiled its controversial plan to regulate the Internet as a public utility. Beyond that it was a week like any other, with new regulations covering everything from biomass crops to walk-in freezers.

On to the data:

  • Last week, 65 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 28 minutes.
  • So far in 2015, 416 final regulations have been published in the Federal Register. At that pace, there will be a total of 2,667 new regulations this year, which would be roughly 1,000 fewer rules than the usual total.
  • Last week, 1,715 new pages were added to the Federal Register, after 1,118 pages the previous week.
  • Currently at 11,068 pages, the 2015 Federal Register is on pace for 70,949 pages.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Five 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 ranges from $647 million to $700 million for the current year.
  • 42 final rules meeting the broader definition of “significant” have been published so far this year.
  • So far in 2015, 97 new rules affect small businesses; 15 of them are classified as significant.

Highlights from selected final rules published last week:

For more data, see Ten Thousand Commandments and follow @10KC and @RegoftheDay on Twitter.

NFL Trivia

From p. 65 of Peter King’s Monday Morning Quarterback book:

At one point the same lawyer represented Barry Switzer, Jerry Jones[,] and Larry Lacewell of the Cowboys. The lawyer’s name was Larry Derryberry. They once dined together. At the table: Barry, Jerry, Larry[,] and Larry Derryberry.

Does Regulation Hurt Innovation?

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.

For example, regulations tend to help incumbent firms, and give newcomers an artificial disadvantage. Tabarrok and Goldschlag agree with this point, finding that “job creation appears slightly positively correlated with regulation at the industry level (p.10).” And every worker who gets a job at an established firm is one who isn’t working at a startup. The labor force is fluid enough that this isn’t a zero-sum game, but regulations helping incumbent firms still have a crowding-out effect on startups. Regulations still hurt dynamism.

There are two points in Goldschlag and Tabarrok’s favor. One is big, and one is small. The small one is that federal regulations are only part of the story. They also acknowledge “other sources of regulation such as state legislation and judicial regulation through the common law (p.21).” We can add to this local-level and international-level regulations, as well as other countries’ domestic-level regulations that affect U.S. businesses.

Innovation does not necessarily respect boundaries. No doubt some companies offshore many R&D activities when domestic regulations make them too difficult. The companies then bring the fruits of those innovations to the U.S. later, so consumers still  benefit, if more slowly. In these cases, the amount of innovation occurring inside the United States decreases, but the overall amount of innovation is only lightly affected, if at all.

The big point is barely alluded to in the paper. It is that the underlying institutions of social cooperation, market exchange, and dynamism are strong enough that federal regulation has, according to Goldschlag and Tabarrok’s analysis, so far been unable to squelch them. Just as a balloon pressed on one end pushes air to the other end, people will still find ways to cooperate and exchange with each other even when regulations push down on them. This inner strength of human cooperation is my great source of optimism, and Tabarrok draws on similar themes in his excellent 2011 e-book Launching the Innovation Renaissance.

Goldschlag and Tabarrok’s coda is less sensationalist than their lede, but probably more accurate: “global dynamism… may be increasing even as measured national dynamism decreases.” We shall see how things go, but on balance, look for human lives to continue to improve in the future. This will happen despite growing federal regulations, not because of them.