Trump’s Executive Order on #NeverNeeded Regulations

Over at National Review, I take a look at President Trump’s new Executive Order directing agencies to get rid of #NeverNeeded regulations:

Waiving regulations can take months or even years, even when they are clearly harmful. Trump’s new executive order is a start. It encourages agencies to use whatever emergency powers they have to speed along the cleanup process. Unfortunately, many drastic regulations are passed during emergencies, from unconstitutional national-security and surveillance policies to bailouts for favored big businesses. But fortunately, regulations can also be removed that way. We have a choice. The famous “ratchet effect” of government’s grabbing power during a crisis and keeping it afterward does not have to be an iron law.

Read the whole piece here. Kent Lassman and Wayne Crews made statements about the Executive Order here. Wayne Crews also wrote about it for Forbes. More reform ideas are at neverneeded.cei.org.

On the Radio: Deregulation Executive Order

Today at 2:30 PT, I will appear on the Lars Larson show to talk about President Trump’s recet Executive Order encouraging agencies to permanently repeal #NeverNeeded regulations waived during the coronavirus response.

This Week in Ridiculous Regulations

Retail sales declined 16.4 percent in April, setting a new record low for the second month in a row. Congress returned to Washington, putting the economy in further danger. Meanwhile, regulatory agencies issued new final regulations ranging from foreign journalists to dog licenses.

On to the data:

  • Last week, 47 new final regulations were published in the Federal Register, after 69 the previous week.
  • That’s the equivalent of a new regulation every three hours and 34 minutes.
  • Federal agencies have issued 1,155 final regulations in 2020. At that pace, there will be 3,039 new final regulations. Last year’s total was 2,964 regulations.
  • There were also 53 proposed regulations in the Federal Register last week, for a total of 841 on the year. At that pace, there will be 2,213 new proposed regulations in 2020. Last year’s total was 2,184 proposed regulations.
  • Last week, agencies published 450 notices, for a total of 8,278 in 2020. At that pace, there will be 21,784 new notices this year. Last year’s total was 21,804.
  • Last week, 2,036 new pages were added to the Federal Register, after 1,323 pages the previous week.
  • The 2020 Federal Register totals 29,589 pages. It is on pace for 77,866 pages. The 2019 total was 76,288 pages. The all-time record adjusted page count (which subtracts skips, jumps, and blank pages) is 96,994, set in 2016.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Three such rules have been published this year. Four such rules were published in 2019.
  • The running cost tally for 2020’s economically significant regulations ranges from net savings of between $1.38 billion and $4.19 billion. 2019’s total ranges from net savings of $350 million to $650 million, mostly from estimated savings on federal spending. The exact number depends on discount rates and other assumptions.
  • Agencies have published 26 final rules meeting the broader definition of “significant” so far this year. 2019’s total was 66 significant final rules.
  • So far in 2020, 232 new rules affect small businesses; 10 of them are classified as significant. 2019’s totals were 501 rules affecting small businesses, with 22 of them significant.

Highlights from last week’s new final regulations:

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

Time for a Federal Price Gouging Law?

Amazon’s vice president of public policy, Brian Huseman, calls for a federal price gouging law in a recent post over at Amazon’s in-house blog. This is a bad idea for several reasons.

One is that there are already effective ways to reduce price gouging without regulation. At Amazon, Huseman writes, “We deploy dynamic automated technology to proactively seek out and pull down unreasonably priced offers, and we have a dedicated team focused on identifying and investigating unfairly priced products that are now in high demand, such as protective masks and hand sanitizer.”

This should be a competitive selling point for Amazon, not a call for more regulation. Regulations, remember, are made by the government we have, not the government we want. Amazon’s technology and in-house policies are almost certainly more effective than what Donald Trump, Nancy Pelosi, or Mitch McConnell would enact during an election year and a pandemic. Company-level policies are also more adaptable than federal-level policies as technology and circumstances change.​

In fact, if Amazon isn’t already doing so, it could license or sell its anti-price gouging technology to competitors for a profit. Price gouging is unpopular, and companies that fight against it look good to customers. Amazon does not need federal regulations to force this business opportunity into being.

Looking at price gouging legislation from Amazon’s perspective, but without the public relations filter, they stand to gain three things from a federal price gouging law:

  1. Regulatory certainty. One federal standard is easier to follow than dozens of state standards.
  2. Liability protection. Amazon will face fewer price gouging lawsuits if the company is cooperative with legislators, or even has a hand in crafting the rules.
  3. Rent-seeking, which is economists’ term for using government for unfair advantage. Price gouging legislation is a way for Amazon to raise rivals’ costs without having to improve its own offerings. Amazon has already invested in artificial intelligence algorithms (AI) and in enforcing guidelines for its third-party sellers. Many of Amazon’s competitors have not, especially the smaller ones.

There is something to be said for the first two items, though there are also arguments against them. But the third item, rent-seeking, is anti-competitive behavior at its worst. One of the primary reasons CEI opposes antitrust regulation, for example, is that antitrust regulations themselves are a major rent-seeking opportunity. Big companies routinely game the rules to thwart competition. Price gouging legislation is another example of the same rent-seeking process. These initiatives happen when companies compete in Washington, rather than the marketplace.

Other Factors

Amazon’s call for a price gouging bill might be part of a larger effort to get itself out of antitrust crosshairs. Ironically, such a bill would make retail less competitive. Not only would Amazon raise rivals’ costs, legislation would prevent companies from competing with each other to offer price gouging policies their customers most prefer.

The timing is as bad as the idea itself. Retail sales declined by 16.4 percent in the month of April, the worst ever recorded—for the second month in a row. Retailers have enough to deal with without having to spend resources complying with new rules their competitor helped to write.

There is a federalism angle, as well. A federal rule would impose standards on more than a dozen states that intentionally refuse them.

Prices Are More than Money

As any good economist will tell you, money isn’t everything. Prices are a lot more than money. Every good has a mix of both money and non-money prices. Price gouging legislation is ultimately ineffective because it only reduces ­money prices during a crisis. Tamping down on those means more severe non-money price increases. These cannot be legislated away.

A high money price causes people who don’t urgently need toilet paper or hand sanitizer to hold off until later, when the price goes back down. That leaves more left over for people who need it now. This matters a great deal during an emergency. On the other side of the equation, that same money price increase also induces producers and distributors to go the extra mile, often literally.

What about non-money prices? One example of a non-money price is when a good becomes harder to find. You might have to drive to a store further away or do some deep digging online for some potentially shady sources. Queuing and waiting lists emerge or shipping times might take longer. These things don’t cost money, but they still have a price. They are not measured in dollars, but in wasted time, extra hassle and stress, and lost opportunities. These non-money price increases leave people with less time left over for other things such as job searches, home schooling, or even taking some time for self-care.

Shortages will happen during a crisis. That is unavoidable. The question is how to deal with them. Just as pushing on a balloon doesn’t change how much air is in it, squeezing down on money prices with a price gouging regulation doesn’t actually do anything to stop price increases. It mostly just redirects them to non-money areas.

What is the correct mix of money- and non-money prices? That is a subjective value judgment. There is no truly right or wrong answer, which is another reason why federal price gouging legislation is bad policy.

Public opinion is pretty well set against price gouging. Importantly, though, most anti-price gouging activists have likely not considered the tradeoffs they would pay in steeper non-money prices. Some of them would likely change their mind if they did. Pollsters should find out. Corporate PR departments would likely change their tune quite a bit based on the results.

Federal price gouging legislation would not stop price increases or alleviate shortages. It would sharply increase non-money prices during emergencies and drive some economic activity into black markets. Companies can set their own price gouging policies without regulation, as Amazon has proven with a mix of AI and sanctions against violating sellers. The rent-seeking aspect of potential price gouging legislation is worth considering for people concerned about business ethics and about large companies gaining an unfair advantage over smaller rivals.

In short, a price gouging bill is #NeverNeeded. Congress has already passed enough harmful flash policy. There’s no need for still more.

This Week in Ridiculous Regulations

The first full week of May featured a continuing pandemic with a death toll that now exceeds the Vietnam War, the biggest unemployment increase in U.S. history, a hailstorm in the D.C. area, freezing temperatures in parts of Midwest, and murder hornets. Meanwhile, regulatory agencies issued new final regulations ranging from walnut reserves to organic regulations.

On to the data:

  • Last week, 69 new final regulations were published in the Federal Register, after 48 the previous week.
  • That’s the equivalent of a new regulation every two hours and 26 minutes.
  • Federal agencies have issued 1,105 final regulations in 2020. At that pace, there will be 3,070 new final regulations. Last year’s total was 2,964 regulations.
  • There were also 57 proposed regulations in the Federal Register last week, for a total of 733 on the year. At that pace, there will be 2,156 new proposed regulations in 2020. Last year’s total was 2,184 proposed regulations.
  • Last week, agencies published 428 notices, for a total of 7,842 in 2020. At that pace, there will be 21,784 new notices this year. Last year’s total was 21,804.
  • Last week, 1,323 new pages were added to the Federal Register, after 3,112 pages the previous week.
  • The 2020 Federal Register totals 27,643 pages. It is on pace for 76,787 pages. The 2019 total was 76,288 pages. The all-time record adjusted page count (which subtracts skips, jumps, and blank pages) is 96,994, set in 2016.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Three such rules have been published this year. Four such rules were published in 2019.
  • The running cost tally for 2020’s economically significant regulations ranges from net savings of between $1.38 billion and $4.19 billion. 2019’s total ranges from net savings of $350 million to $650 million, mostly from estimated savings on federal spending. The exact number depends on discount rates and other assumptions.
  • Agencies have published 24 final rules meeting the broader definition of “significant” so far this year. 2019’s total was 66 significant final rules.
  • So far in 2020, 220 new rules affect small businesses; nine of them are classified as significant. 2019’s totals were 501 rules affecting small businesses, with 22 of them significant.

Highlights from last week’s new final regulations:

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

April Pandemic-Caused Unemployment Rate Underscores Urgency of Getting Rid of #Neverneeded Regulations

The following is a press release originally posted at cei.org:

CEI senior fellow Ryan Young indicated that April’s 14.7 percent unemployment rate was unsurprising and will probably continue in May. He called on policymakers to keep deregulating as a prime way of helping people.

“The best thing policy makers can do is to waive regulations that prevent people from picking up the pieces. Businesses will need easier access to loans, crowdfunding, and other financing than they have now. Occupational licenses that keep out new workers in order to protect existing businesses are, in many cases, more harmful now than ever. Months-long permit processes that prevent businesses from adapting to the new conditions must be eased and sped up. A great deal of economic pain is inevitable right now. Congress, the President, and the states should act immediately to minimize the unnecessary self-inflicted pain that regulations are causing right now.”

For a list and discussion on #neverneeded regulations, visit neverneeded.cei.org/.

 

This Week in Ridiculous Regulations

Thursday’s Federal Register was not published online until late in the evening due to a technical error. Friday’s edition did not appear until the afternoon. Both editions are more than 1,000 pages each; an average day is under 300 pages. The 2020 Federal Register passed 25,000 pages, and is poised to surpass last year’s page count by more than 1,000 pages. The number of final regulations in 2020 also passed the 1,000 barrier. Meanwhile, regulatory agencies issued new final regulations ranging from fuel economy to seasonal workers.

On to the data:

  • Last week, 48 new final regulations were published in the Federal Register, after 55 the previous week.
  • That’s the equivalent of a new regulation every three hours and 30 minutes.
  • Federal agencies have issued 1,036 final regulations in 2020. At that pace, there will be 3,048 new final regulations. Last year’s total was 3,150 regulations.
  • There were also 49 proposed regulations in the Federal Register last week, for a total of 733 on the year. At that pace, there will be 2,156 new proposed regulations in 2020. Last year’s total was 2,184 proposed regulations.
  • Last week, agencies published 425 notices, for a total of 7,414 in 2020. At that pace, there will be 21,806 new notices this year. Last year’s total was 21,804.
  • Last week, 3,112 new pages were added to the Federal Register, after 1,464 pages the previous week.
  • The 2020 Federal Register totals 26,318 pages. It is on pace for 77,405 pages. The 2019 total was 76,288 pages. The all-time record adjusted page count (which subtracts skips, jumps, and blank pages) is 96,994, set in 2016.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Three such rules have been published this year. Four such rules were published in 2019.
  • The running cost tally for 2020’s economically significant regulations ranges from net savings of between $1.38 billion and $4.19 billion. 2019’s total ranges from net savings of $350 million to $650 million, mostly from estimated savings on federal spending. The exact number depends on discount rates and other assumptions.
  • Agencies have published 24 final rules meeting the broader definition of “significant” so far this year. 2019’s total was 66 significant final rules.
  • So far in 2020, 202 new rules affect small businesses; nine of them are classified as significant. 2019’s totals were 501 rules affecting small businesses, with 22 of them significant.

Highlights from last week’s new final regulations:

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