Monthly Archives: November 2021

This Week in Ridiculous Regulations

Posted on November 8, 2021 | Comments Off on This Week in Ridiculous Regulations

Children can now receive COVID-19 vaccinations, which is good news all around. The economy gained 531,000 jobs in October, showing once again why Congress’ big spending bills are unnecessary. Meanwhile, pundits spent the week analyzing off-year election results. Agencies issued new rules ranging from rural innovation to seafood dealers.

On to the data:

  • Agencies issued 63 final regulations last week, after 58 the previous week.
  • That’s the equivalent of a new regulation every two hours and 40 minutes.
  • With 2,750 final regulations so far in 2021, agencies are on pace to issue 3,243 final regulations this year. 2020’s total was 3,218 final regulations.
  • Agencies issued 33 proposed regulations in the Federal Register last week, after 61 the previous week.
  • With 1,776 proposed regulations so far in 2021, agencies are on pace to issue 2,094 proposed regulations this year. 2020’s total was 2,222 proposed regulations.
  • Agencies published 495 notices last week, after 418 notices the previous week.
  • With 18,911 notices so far in 2021, agencies are on pace to issue 22,301 notices this year. 2020’s total was 22,480.
  • Last week, 1,505 new pages were added to the Federal Register, after 1,394 pages the previous week.
  • The average Federal Register issue this year contains 291 pages.
  • With 61,664 pages so far, the 2021 Federal Register is on pace for 72,717 pages in 2021. The 2020 total was 87,352 pages. The all-time record adjusted page count (subtracting 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. There are 16 such rules so far in 2021, none from the last week. Agencies published five economically significant rules in 2020, and four in 2019.
  • The running cost tally for 2021’s economically significant rules ranges from $4.61 billion to $8.40 billion. The 2020 figure ranges from net savings of between $2.04 billion and $5.69 billion, mostly from estimated savings on federal spending. The exact numbers depend on discount rates and other assumptions.
  • Agencies have published 348 final rules meeting the broader definition of “significant” in 2021, with four in the last week. This is on pace for 410 significant rules in 2021. 2020’s total was 79 significant final rules.
  • In 2021, 761 new rules affect small businesses; 88 are classified as significant. 2020’s totals were 668 rules affecting small businesses, 26 of them significant.

Highlights from last week’s new regulations:

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

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How to Fill 10 Million Vacant Jobs

Posted on November 5, 2021 | Comments Off on How to Fill 10 Million Vacant Jobs

Would raising the minimum wage help to fill the more than 10 million job vacancies currently open? It makes some intuitive sense—higher pay will attract more workers. The trouble is that minimum wages have tradeoffs that cancel out that higher pay, so it wouldn’t work. As I explain in an op-ed for Inside Sources:

Workers earn more than wages. They also earn non-wage pay. If the law requires employers to raise wages, they can and do make up the difference by cutting non-wage pay. …

Restaurant workers, for example, might lose complimentary shift meals. Customers might leave smaller tips if they believe their server is getting a higher hourly wage. A restaurant owner might decide not to hire busboys and instead ask servers to add those duties to their already full plates. Retail workers might have to pay for formerly free parking, have fewer or shorter breaks, or lose employee discounts or tuition assistance.

Some employees might get their hours cut (an obvious tradeoff for which recent Nobel laureate David Card’s famous co-authored study failed to account).

Minimum wages don’t work as intended, but there is still a lot that policy makers can do to help get people back into the workforce. They should loosen job-killing occupational licenses, reform zoning and land-use regulations that inflate rents that could instead go to paying salaries, reform financial regulations that make it difficult for companies to hire and grow, and undo Trump-era trade barriers that are sludging up supply networks.

Read the whole piece here. See also my CEI study, “Minimum Wages Have Tradeoffs.”

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Posted in Economics, Minimum Wage, Publications

Steel, Aluminum Tariffs to Remain Above Pre-Trump Levels

Posted on November 1, 2021 | Comments Off on Steel, Aluminum Tariffs to Remain Above Pre-Trump Levels

It is not asking much to undo President Trump’s doubling of U.S. tariffs, which are a major contributor to today’s supply network crisis. But apparently even this is asking too much from an administration that largely shares Trump’s economic views. While the weekend’s news about the easing of steel and aluminum tariffs against the European Union was welcome, it is too small to do much good. Nor does it treat root problems.

The tariffs will actually remain in place. The U.S. will simply allow 3.3 million metric tons of EU-made steel into the U.S. duty-free before charging tariffs. For context, U.S. producers made 72 million metric tons of steel in 2020, so the exemption will have only a small effect on steel prices. Shipments beyond 3.3 million metric tons will still be charged a 25 percent tariff. In addition, the EU agreed to not enact new retaliatory tariffs that were scheduled to take effect on December 2.

Not imposing new tariffs is different from lowering existing ones. It also has a much effect. Under the new agreement, all other existing trade barriers will remain in place. Total U.S.-EU trade barriers will remain higher than they were four years ago. This is bad news for consumers and producers on both sides of the Atlantic, at a time when prices are rising and supply networks are strained.

The agreement even adds new trade restrictions where there were none before. The New York Times reports:

The agreement will also place restrictions on products that are finished in Europe but use steel from China, Russia, South Korea, and other countries. To qualify for duty-free treatment, steel products must be entirely made in the European Union.

Tariffs mean higher prices. The new exemption’s small size means that steel and aluminum prices will remain above pre-tariff levels. Cars, construction, and other steel-using industries will continue to have shortages and higher consumer prices.

The exemption will also do little to relieve strained supply networks. For example, there is now a shortage of truck trailers, called chassis, used for hauling shipping containers to and from ports. Chinese-made chassis are currently subject to 220 percent tariffs, which makes them unaffordable for many smaller trucking companies. Washington’s goal is to have them buy American-made chassis instead.

The trouble is that those tariffs also allow U.S. chassis producers to keep their prices high. They don’t have to worry about truckers turning to competitors—which is ironic in a time of rising antitrust enforcement. While that goes straight to the chassis makers’ profit margins, it harms everyone else. Ports stay clogged, truckers can’t do much to help unclog them, and consumers face higher prices and shortages. About the only winners are domestic steel producers and their labor unions, which is likely the point.

The U.S.-EU trade dispute also remains unresolved. This agreement is more of a cease-fire. A law of tariffs, rediscovered during the Trump era, is that other countries nearly always retaliate in kind against new tariffs. What happened here is that the U.S. is partially rolling back one of its new tariffs, and the EU is rolling back its retaliation. Nothing has been liberalized on net. Other long-running disputes over aerospace subsidies and other issues remain in play.

COVID-19 is still hampering the economy and supply networks are still in crisis. Now would be a good time for actual trade liberalization, rather than merely preventing another round of protectionist escalation. But on trade, as with many other issues, the Biden administration is difficult to tell apart from its predecessor.

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Posted in Economics, International, Trade

This Week in Ridiculous Regulations

Posted on November 1, 2021 | Comments Off on This Week in Ridiculous Regulations

Third quarter GDP growth was an estimated at 2 percent, down from about 6 percent the previous two quarters. The 2021 Federal Register topped 60,000 pages with two months left in the year. Meanwhile, agencies issued new rules ranging from fan efficiency to motherships.

On to the data:

  • Agencies issued 58 final regulations last week, after 53 the previous week.
  • That’s the equivalent of a new regulation every two hours and 54 minutes.
  • With 2,687 final regulations so far in 2021, agencies are on pace to issue 3,245 final regulations this year. 2020’s total was 3,218 final regulations.
  • Agencies issued 61 proposed regulations in the Federal Register last week, after 36 the previous week.
  • With 1,743 proposed regulations so far in 2021, agencies are on pace to issue 2,105 proposed regulations this year. 2020’s total was 2,222 proposed regulations.
  • Agencies published 418 notices last week, after 491 notices the previous week.
  • With 18,416 notices so far in 2021, agencies are on pace to issue 22,242 notices this year. 2020’s total was 22,480.
  • Last week, 1,394 new pages were added to the Federal Register, after 1,238 pages the previous week.
  • The average Federal Register issue this year contains 291 pages.
  • With 60,158 pages so far, the 2021 Federal Register is on pace for 72,655 pages in 2021. The 2020 total was 87,352 pages. The all-time record adjusted page count (subtracting 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. There are 16 such rules so far in 2021, three from the last week. Agencies published five economically significant rules in 2020, and four in 2019.
  • The running cost tally for 2021’s economically significant rules ranges from $4.61 billion to $8.40 billion. The 2020 figure ranges from net savings of between $2.04 billion and $5.69 billion, mostly from estimated savings on federal spending. The exact numbers depend on discount rates and other assumptions.
  • Agencies have published 344 final rules meeting the broader definition of “significant” in 2021, with four in the last week. That is on pace for 415 significant rules in 2021. 2020’s total was 79 significant final rules.
  • In 2021, 734 new rules affect small businesses; 87 are classified as significant. 2020’s totals were 668 rules affecting small businesses, 26 of them significant.

Highlights from last week’s new regulations:

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

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Statement on Reconciliation Bill

Posted on November 1, 2021 | Comments Off on Statement on Reconciliation Bill

Several of my colleagues and I issued statements about the reconciliation bill Congress is currently considering. The full statement is here. My contribution is also below:

Senior Fellow Ryan Young said:

“There are two reasons for passing the infrastructure and reconciliation spending bills: fighting COVID and helping the economic recovery. They fail on both counts. Congress should turn to other policies instead. These include speeding up the FDA’s approval process for medical treatments, and lifting regulations, tariffs, permits, and licenses that are sludging up supply networks.

“Federal regulations currently cost more than $14,000 per household. Lightening that load by as little as ten percent would be an enormous stimulus that requires no new deficit spending.

“Most of the 1,684 page reconciliation bill consists of COVID-unrelated wishlist items such as more than $14 billion for forest restoration; $50 million for water research; $1 billion for antitrust enforcement; and billions of dollars in subsidies for private businesses with the right political connections.

“Because all that money has to come from somewhere else, stimulus is at best a zero-sum game. The spending bills are not creating new wealth, they are reshuffling existing wealth. Since funding is decided by politics rather than merit, the bills are almost certainly a net loss to the economy, even compared to doing nothing.

“The spending bills will use up nearly $3 trillion in capital that instead could have helped struggling businesses take loans to stay afloat or grow; that could have gone towards adapting supply networks to post-COVID conditions; and that people could have invested in themselves to improve their future prospects.”

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Posted in Economics, Spending, Stimulus