Category Archives: #NeverNeeded

December Job Losses in Leisure & Hospitality Eclipse Gains in Other Sectors – What Can Policymakers Do?

This press release was originally posted at cei.org.

The Labor Department reported today the economy lost 140,000 jobs in December 2020. Gains in various sectors were eclipsed by 500,000 jobs lost in the leisure and hospitality sector.

CEI senior fellow Ryan Young says policymakers should continue to clear away never-needed regulations and build in flexibility to future reopening plans:

“There is a small ray of sunshine from today’s jobs report: leisure and hospitality jobs are pandemic-sensitive. They’ll likely come back quickly as more people get vaccinated. Since other jobs are up by about 360,000, that means the rest of the economy is likely growing, if slowly. Officials should continue to remove never-needed regulations that continue to block businesses from adapting to consumers’ and employees’ changing COVID-era needs. 

“As the pandemic subsides, officials should allow flexibility for companies to set their own reopening policies. Reopening safely will require trial and error, which means error-prone policymakers should reject a top-down approach that would make it difficult to adapt as needed.”

CEI research fellow Sean Higgins points to lockdowns and restrictions as a big impediment for leisure and hospitality jobs:

“After months of jobs gains indicating the businesses and workers were adapting to the Covid-19 crisis, Friday’s report that economy shed 140,000 jobs shows the drag created by continual lockdowns and restrictions is starting to roll back those gains. The losses were concentrated in the leisure and hospitality fields, indicating those sectors are running out of ways to cope and are scaling back instead.

“Just two months ago the leisure and hospitality sector was leading job growth, having added 318,000 jobs in September. In November, that dropped to a mere 31,000 jobs gained; and in December, that same sector lost 498,000 jobs. Since February, employment in leisure and hospitality is down by 3.9 million, or 23.2 percent, accounting for more than half of the 5.7 million jobs lost overall since the pandemic started.

“Seasonal shifts account for part of the loss, but the shuttering of the economy severely exacerbated the situation. As the BLS report notes, 15.8 million people reported in December that they had been unable to work because their employer closed or lost business for reasons related to the pandemic, up one million from the previous month.

“The silver lining is that the economy can recover if given the chance. There is no substitute for letting people get back to work. Hopefully, as vaccinations accelerate, public officials will relent and let this happen.”

2020 Was Difficult. It Was Not the Worst Year Ever

It’s been a hard year, and I am hardly alone in being glad it’s almost over. But was 2020 the worst year ever? Over at Inside Sources, I argue it was not.

COVID-19 is a novel disease. No human caught it before 2019. Scientists created effective vaccines in about a year. By comparison, smallpox has been around since at least Ancient Egypt in the third century B.C. The earliest evidence of inoculation dates to 10th century China. That’s more than a thousand years between smallpox’s first appearance and its first effective treatment—for a disease with a 30 percent fatality rate. But inoculation was rarely practiced until the 18th century, so it didn’t help very many people for its first 900 years or so.

When Abigail Adams had her children inoculated in 1776, it was still a scary, new technology for most people. It was an act of courage for her to set a positive example like that. And it took an additional two centuries for smallpox to be eradicated altogether, in 1977. Our generation’s COVID timetable is unimaginably better than with which our ancestors had to deal.

Read the whole thing here.

It is important for us to learn the right lessons from our COVID-19 experience. We need cultural and political institutions that are open and adaptable. These will make us more resilient against future crises, and make it easier to apply new things we learn as quickly as possible. CEI scholars spent the better part of 2020 compiling these sorts of ideas, which you can find at neverneeded.cei.org. Former CEI Julian Simon Award winner Johan Norberg offers further perspective in a recent piece in the UK’s Spectator.

The 2020 Election Actually Had Some Free-Market Victories

Neither presidential candidate has much interest in limited government. But over at National Review, I look at some neglected down-ballot victories from the 2020 election. A divided Congress will prevent one party from running everything, regardless of who wins the White House. There were also several state-level victories across the country. 

California voters partially undid the AB5 gig-worker law that made unemployment even worse during the pandemic. They also voted against an expansion of rent control, which is one reason California’s housing prices are so high.

Not that legislators will listen, but Illinois voters sent them a message to address the state’s pension crisis by cutting spending rather than raising taxes:

The Illinois legislature had already passed a separate tax hike bill, conditional on voters approving the amendment. Voters disapproved by a 55-45 margin, and taxes will remain as they are.

Voters in Oregon and several other states also continued to deescalate the drug war:

In order for people to respect the law, they have to be able to respect it. That was a major cultural cost of alcohol prohibition in the 1920s, and of the drug war today. Drug legalization allows law enforcement to focus on real crimes and ease an avoidable source of antagonism between police officers and the communities they serve—especially in minority areas where drug laws are disproportionately enforced.

Washington state voters registered disapproval of a plastic bag tax. This is a victory for my colleague Angela Logomasini, who has written about the issue here and here.

A lot went wrong in the 2020 election, as is true every year. But some things also went right. Now let’s build on those victories and create some new ones.

Read the whole thing here. Ideas for the next free-market victories are at neverneeded.cei.org.

Regulatory Relief Needs Better Transparency

Getting rid of #NeverNeeded regulations is one of the most important policy responses to the COVID-19 pandemic. The short-term benefits are obvious. But the long-term benefits are arguably more important, for both long-term growth and resilience against the next crisis. My colleague Alex Reinauer and I have a short piece over at RealClearPolicy looking at just how much deregulation has happened in the wake of COVID. It’s actually very difficult to tell how much there is, due to a lack of transparency:

Transparency is important, especially during a crisis. Agencies need to do more than look like they are “doing something” in response to COVID. Congress and the president need to ensure agencies follow existing transparency requirements. Additional safeguards such as annual agency regulatory report cards will keep agencies more honest during this and future crises. Then policy makers and the public can judge for themselves what agencies are faring, and how they can do it better. It’s a lot more cost effective than another $1 trillion “stimulus.”

These transparency problems are a system-level problem that needs to be addressed. Agencies need to follow existing transparency guidelines. People need to know what they are doing, how much it costs, and what agencies are doing to improve their work. As we often say at CEI, institutions matter. It is not enough to reform this or that rule. The larger institutions that create those rules also need to be reformed.

Read the whole piece here. For more reform ideas, visit neverneeded.cei.org.

Record GDP Numbers Need Context: Good news, but More to Do

Most of the talk about today’s GDP numbers will be related to the election. It shouldn’t. Presidents don’t run the economy; hundreds of millions of ordinary people do. Fortunately, the news is pretty good. Economic activity is most of the way back to pre-pandemic levels, but not all the way. Policy makers can help the momentum by continuing to waive never-needed regulations that are blocking opportunities for workers and entrepreneurs who are still finding new ways to adapt to life under COVID.

There are two GDP numbers being bandied about today: 33.1 percent and 7.4 percent. The 33.1 percent figure is how much the economy would grow if the third quarter’s pace were to continue for a full year. This is the annualized number, and it will almost certainly not happen. While the annualized 33.1 percent number has its uses, it is easy to use in a misleading way. Readers should be wary of people cheerleading it as a new record. While technically true, the record doesn’t mean much. The economy is still slightly smaller than it was year ago.

There was a similar confusion surrounding last quarter’s 31.4 percent drop, which set its own record as the worst ever. Again, that was the full-year projected pace at that quarter’s growth rate. It is not even close to what actually happened. The very next quarter had record growth and canceled out most of it.

The 7.4 percent number is the more realistic number to use, though the same caveat applies about its record status. This is how much the economy grew since the previous quarter. Since 7.4 percent growth happened right after a 7.2 percent drop, it means the economy is almost back where it was in 2020’s first quarter, when the pandemic began. Yet, it is not quite all the way back, because the 7.4 increase started from a smaller baseline than the second quarter’s 7.2 percent decline did.

Today’s good news is welcome, but it doesn’t mean the economy is going gangbusters. Businesses that have difficulty with physical distancing will continue to struggle. These include restaurants, retailers, travel, tourism, and live entertainment. Their employees will struggle as well.

Policy makers can help by continuing to find and remove never-needed regulations that block people from adapting to new circumstances and starting new businesses and by reforming system-level processes that keep pumping out harmful regulations.

For ideas on which never-needed regulations to reform, see neverneeded.cei.org.

September Brought Uptick in Jobs – Will Next Government Steps Help or Hurt?

This is a press release originally posted at cei.org.

Employers added 661,000 jobs in September, and the unemployment rate declined to 7.9 percent from 8.4 percent, the U.S. Bureau of Labor Statistics said today in its monthly report. CEI experts expressed encouragement that deregulatory policies and re-openings are helping people recover financially from pandemic lockdowns and shutdowns this year but warned that more government action is needed – to deregulate and to reject a return to lockdowns.

Statement by Sean Higgins, CEI research fellow:

“Friday’s Labor Department report that the economy added 661,000 jobs, dropping the official unemployment rate to 7.9 percent, is welcome news but also a reminder the economy has a long way to go to fully recover. The good news is the data suggest people are eager to go back work and shop, eat in restaurants, and go to theaters. But they cannot and that’s holding the recovery back.

“If we want the economy to recover, we cannot revert to locking everything down in reaction to a recent surge in coronavirus cases. We must find better ways to allow people to safely interact, instead. Doling out more stimulus funds to businesses or extending unemployment relief is placing duct tape over the problems, while piling on more debt that taxpayers will eventually have to pay off.

“The department’s report found the sector with the largest growth was leisure and hospitality, which added 318,000 jobs in September. That accounted for about half of the overall employment gains in the last month. Bars and restaurants accounted for the largest part of that, adding 200,000 jobs, with the rest in gambling, amusements, and hotels. These gains are dramatic because hospitality was the sector hardest by the outbreak. Since February, that sector of the economy has recovered 3.8 million jobs but remains down more than 2.3 million from where it was at the beginning of the year. That’s about a third of the total 6.8 million jobs lost since February.

“Retail trade grew by 142,000 jobs over the last month, the largest part of it (40,000 jobs) coming from clothing outlets, indicating more people are out shopping. Retail is still down 483,000 jobs overall from February.

“The good news is these sectors can rebound quickly when given the chance. Doing that means allowing people to get out of their homes to re-engage safely with the outside world. That has to be the focus if we want the economy to recover.

Statement by Ryan Young, CEI senior fellow:

“The economy continues to create jobs, but the pace is slowing. It will be some time before the economy is back to normal, let alone everyday life. Unfortunately, there are still thousands of government-created barriers that keep people out of work. These include licenses, permits, entry barriers, excessive paperwork, and tariffs—not to mention looming antitrust threats against the very tech companies that help make remote work possible. Over-regulation is hindering virus response and economic recovery.

“President Trump and Congress should continue to eliminate never-needed regulations. Depending on how the election goes, further regulatory reform will a positive addition to the Trump legacy or the springboard for a second-term agenda. Either way, regulatory reform is the right thing to do to get people back to work.”

Senators Introduce Regulatory Commission Bill

CEI’s approach to regulatory reform has an overarching theme: It is not enough to get rid of this or that harmful regulation. For the benefits to last, there must be system-level reform to the rulemaking process that keeps generating those rules. Institutions matter. One of the best of those institution-level reform ideas now has COVID-19-focused legislation at the ready: the independent regulatory reduction commission.

Senators James Lankford (R-OK), Ron Johnson (R-WI), and Rob Portman (R-OH) have introduced the Pandemic Preparedness, Response, and Recovery Act (PPRRA). The House version was previously introduced by Rep. Virginia Foxx (R-NC). The bill would establish an independent commission to identify regulations harming the COVID-19 response, and compile a package for Congress to vote on.

Wayne Crews and I have a statement supporting the idea here.

The idea is not new. Former Sen. Phil Gramm introduced a version of the idea back in the 1980s. The Base Realignment and Closure (BRAC) commissions that closed unneeded military bases had four rounds in the 1990s, and saved billions of dollars. CEI has been promoting the idea for more than a decade, most recently in a Washington Examiner op-ed and  #NeverNeeded paper. Several other legislative versions of the regulatory BRAC commission have been introduced by lawmakers from both parties.

The time to act is now. If House and Senate leadership, not wanting to make any waves before the election, do not act, then the PPRRA should be reintroduced in the next Congress, and on and on until it passes. Regulatory reform is a long game, but with people hurting from COVID-19 and a tough recovery ahead, this is an idea that Congress should act on now.

CEI Experts Applaud Sens. Lankford, Johnson, and Portman for Independent Regulatory Commission Legislation

This is a press statement originally posted at cei.org.

On Thursday, Senators James Lankford (R-OK), Ron Johnson (R-WI), and Rob Portman (R-OH) introduced the Pandemic Preparedness, Response, and Recovery Act. The House version was previously introduced by Rep. Virginia Foxx (R-NC). The bill would establish an independent commission to identify regulations harming the COVID-19 response, and compile a package for Congress to vote on.

Competitive Enterprise Institute senior fellow Ryan Young thinks the commission is a good idea:

“If a regulation isn’t helping now during a pandemic, it was probably never needed in the first place. Agencies have already loosened rules for telemedicine, fast-tracked COVID treatment approval, and remote education. But the Code of Federal Regulations is still 185,000 pages long. How many of those rules are still harming the COVID-19 response? How many might make the country less resilient against the next crisis? A dedicated commission like the one in the Pandemic Preparedness, Response, and Recovery Act is a good way to find out.

“If leadership doesn’t see fit to hold a vote on the PPRRA this session, COVID-19 will still be around when the next Congress convenes in January. If necessary, the bill should be reintroduced and voted on then.”

CEI Vice President for Policy Wayne Crews said:

“The Congress has passed several Covid-19 relief packages and is contemplating more spending stimulus at this very moment. Missing from that body’s concrete actions in the coronavirus crisis has been powerful deregulatory stimulus, that is, easing or removing unnecessary rules and regulations that can both impede response to the pandemic and restrict smooth and energetic economic recovery from it.

“Federal agencies and the administration have implemented numerous waivers and suspensions with respect to the crisis as well as some explicit moves to streamline regulation and treat those subject to rules more fairly, an example of that being Trump’s executive order on Regulatory Relief to Support Economic Recover. But the executive branch is not America’s lawmaking body, and many of the steps taken need to be permanent rather than transitory. That is just the beginning; there remains a great deal more relief-oriented foundational streamlining of the Code of Federal Regulations’ content possible that utterly depends upon the intense attention of Congress to come to fruition.

“It is up to Congress has to reassert its primary legislative role and act to reduce regulation, as this juncture ideally can do that via a bipartisan ‘regulatory improvement commission,’ an idea is rooted in bipartisan discussions stretching back over several Congresses.

“The new Pandemic Preparedness, Response, and Recovery Act is a logical, sensible, fair and humane approach to dealing with crisis. Under the Act, a bipartisan commission would prepare recommendations for regulatory streamlining, and those would be improved upon by public notice and comment. The resultant report would be issued to Congress, which would have the ability to say yes or no to this new vehicle uniquely expressing an aspect of the will of the people that too often gets neglected. While the regulatory code grows with little relief, the Pandemic Preparedness, Response, and Recovery Act provides a way of disciplining it for the public good, and health.”

Read more:

New Paper: Antitrust Regulation is #NeverNeeded

My colleague Jessica Melugin and I, along with our former colleague Patrick Hedger, have a new paper out today, “Repeal #NeverNeeded Antitrust Laws that Hinder COVID-19 Response: Smokestack-Era Laws Favor Established Interests and Do Not Encourage Competition.” The tech companies that regulators are targeting have made a difficult pandemic easier to endure. Antitrust lawsuits would not help the COVID-19 response. Since the real cost of antitrust policy is its chilling effect on new innovations, ramping up antitrust enforcement would leave the country less resilient against the next crisis.

Amazon has made it easy for people to get no-contact deliveries of household supplies and groceries—and spurred competitive responses from Walmart, Target, and other retailers. Facebook makes it easy for people to stay in touch while staying socially distant. Google makes it easy to find information about the virus and stay up to date. As the paper concludes:

Antitrust investigations at the federal and state level should be suspended during the COVID-19 crisis and, ideally, abandoned permanently. The unintended consequences of market distortion and chilled innovation are the last thing consumers and businesses need right now—or ever. This is no time for politicians and government lawyers to promote their own careers through the posturing of antitrust enforcement. Consumer benefit and business resiliency must be preserved and antitrust enforcement must not be prioritized or expanded.

Read the whole thing here. For more on antitrust, see Wayne Crews’s and my paper “The Case against Antitrust Law” and CEI’s dedicated antitrust site, antitrust.cei.org.

New CEI Video: Eliminating Never Needed Regulations to Help with Recovery

In a new CEI video, Kent Lassman talks about three things agencies can do rein in regulations that are hindering the COVID-19 response and making economic recovery even harder. Congress should establish an independent regulatory reduction commission. Agencies should go over their own rules and policies and prune them. And new rules should have automatic sunsets

On their own, members of Congress have neither the incentive nor the ability to thoroughly trim regulations. So, they should do what they did the last time they hit an impasse like this—establish an independent commission. When the Cold War ended and the military needed fewer bases, no one representative would vote to close the one in his or her district, even if the base’s resources would do more good if used differently, because they didn’t want to face the political backlash.

The Base Realignment and Closure (BRAC) commission solved the problem. It studied the situation and sent Congress a plan for which bases to keep and which to shrink or close. This was then put to an up-or-down vote, without possibility for amendment. The streamlining of the military worked. Individual members of Congress could avoid blame for specific base closures. And voters understood that if their base was affected by BRAC, it was a fair decision made for a good reason. Four rounds of BRAC saved billions of dollars.

We should do something similar for regulation. In fact, the idea has been around since the early 1980s, when Sen. Phil Gramm proposed a version of it. After other occasional proposals from both parties, Rep. Virginia Foxx (R-NC) has just proposed her version of a regulatory BRAC. It’s a good idea, and it’s being taken seriously. With regulations harming the coronavirus response and the economy, now is the time to act on it.

Agencies should also so their own housework. Executive orders from President Trump have required agencies to get rid of two old rules for each new rule they enact; publish guidance documents in a single, searchable place in order to fight against the problem of regulatory “dark matter;” and most recently, to encourage agencies to use their emergency powers to wave rules that are getting in the way of an effective COVID response.

Finally, new regulations should have automatic sunsets. Just as cartons of milk have an expiration date, so should regulations. Times change; regulations often don’t. This rule would give agencies an incentive to periodically revisit and modernize their rules. Letting obsolete or harmful ones go is as simple as doing nothing; this is a fitting setup for a Congress that is rarely brave enough to take a stand on anything.

Please share the video on social media. For more on these proposals, see my recent paper “How to Make Sure Reformed #NeverNeeded Regulations Stay That Way.” More ideas are at neverneeded.cei.org.