It isn’t just Washington that gets a fresh start in January. California gets one, too. One of the top items on the Golden State’s policy agenda should be getting rid of what’s left of Assembly Bill 5, the controversial gig-worker law. As I argue this morning in several California newspapers, including the Orange County Register:
California’s unemployment rate is at 9.3 percent, compared to 6.7 percent nationally. California voters helped by passing Proposition 22 in November, which exempts app-based rideshare and delivery companies like Uber, Lyft, and DoorDash from California’s Assembly Bill 5 “gig work” law. This comes months after the state legislature passed an “oops” bill to exempt thousands of other workers that AB5 accidentally threw out of work, from journalists to musicians. Now that AB5 no longer applies even to its primary ridesharing targets, the legislature should just get rid of AB5 altogether. Meanwhile, the rest of the country should learn from California’s experiment.
Read the whole piece here. For more on AB5, see other pieces by Ryan Radia, Sean Higgins, and me.
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.
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.
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.
Massive shortages happened almost instantly when it became clear that the coronavirus would require a nationwide lockdown. Grocery stores almost instantly cleared out of frozen foods, non-perishables, hand sanitizer, and, bizarrely, toilet paper. Stores dealt with the shortages in different ways. But one of those ways, raising prices, is almost universally unpopular. In fact, 36 states have anti-price gouging legislation on the books. Both Commerce Secretary Wilbur Ross and an Amazon vice president have called for federal price gouging legislation.
In a new paper, I explain that price gouging legislation is a bad idea, regardless of one’s feelings about price gouging. The main reasons are:
- Private companies have their own anti-price gouging responses. Moreover, they can evolve in ways regulation cannot, and more quickly. For example, Amazon’s artificial intelligence (AI) algorithms for policing price gouging among its third-party sellers turned out to have unintended consequences. But unlike Congress, they don’t have to wait until the political winds blow just right before doing something about it. Part of trial is error, and that’s okay. Without mistakes, there is no learning.
- Price controls make shortages worse.
- Rent-seeking. Big companies such as Amazon have already invested in AI algorithms and other anti-price gouging measures to prevent their third-party sellers from price gouging. Their smaller competitors have not. Amazon’s call for federal legislation likely has a bit more than good PR behind it.
- Anti-price gouging measures don’t actually reduce prices. They reduce money prices at a tradeoff: non-money prices go up even more. These non-money price increases include worse shortages, longer searches, waiting lines, longer shipping times, lower quality, and in some cases, more black market activity.
- There is no objectively correct mix of money- and non-money prices during a crisis. Different people have different needs and different preferences. Legislation, by imposing one single standard, does no favors to people’s diverse situations.
The whole paper is here. I touched on a few other price gouging tradeoffs here. CEI’s #NeverNeeded website is here.
There are lots of good regulatory reform ideas out there. The ideas with the most staying power share a common theme. They don’t just treat this or that rule. They treat the larger rulemaking system that keeps churning out those harmful rules. With a tough economic recovery ahead once masks, prudence, and treatments defeat COVID-19, now is a good time to implement them.
In a recent paper, I outlined two institution-level reform ideas: an independent Regulatory Reduction Commission, and automatic sunsets for all new rules. For those who don’t have time for the paper-length version, there is now an op-ed version, courtesy of Inside Sources. It concludes:
Dealing with COVID-19’s health and economic effects are the two top political priorities right now. Nothing else even comes close. As policymakers find and eliminate never-needed regulations that are blocking recovery, they must also reform the system that made those rules possible in the first place.
If left untreated, that regulatory sludge will build back up, and stifle the next emergency response in ways no one can predict today. Repeal is not enough.
We also need resilience.
The whole piece is here. The original paper is here. For more regulatory reform resources, see neverneeded.cei.org.
Over at Inside Sources, Wayne Crews and I have a piece summarizing the main findings of Wayne’s new 2020 edition of Ten Thousand Commandments, plus some reforms that will help with the virus response and economic recovery:
The only thing in a typical family’s budget that costs more than regulation is housing—which itself is made more expensive by zoning ordinances, tariffs on steel and lumber, and arcane mortgage regulations….
Just as every gallon of milk has an expiration date, every new regulation should have an automatic sunset. That way, if a rule proves unworkable or goes obsolete, it will automatically go away. …
Congress should create an independent commission to go through large parts of the 185,000 pages of federal rules each year and send lawmakers a package of harmful or old rules to repeal with a single up-or-down vote.
Read the whole piece here. The 2020 edition of Ten Thousand Commandments is here. More resources are at CEI’s #NeverNeeded website.
California’s AB5 law was already backfiring before the COVID-19 pandemic hit. The legislation intends to reclassify many California-based independent contractors as formal employees in an attempt to raise their wages and benefits. It has instead cost thousands of jobs—many of which are home-based and quarantine-friendly.
California legislators have reportedly been mulling an “oops” bill that would offer exemptions from AB5 requirements. Over in the Orange County Register, I argue that exemptions are not enough. AB5 should be repealed outright:
While offering exemptions has the virtue of requiring politicians to admit their policies are hurting people, it has three significant problems.
One, exemptions take time to process. We don’t have that right now. …
Two, the officials who grant exemptions would gain great power. There is a risk some would use this power to enrich themselves. California legislators would also be tempted to bully companies for campaign contributions by dangling AB5 exemptions.
Three, exemptions would give favored businesses a government-granted advantage over competitors.
Read the whole piece here. I weighed in earlier on AB5 here. Ryan Radia’s CEI study on AB5 is here.
Over at RealClearMarkets, Iain Murray and I outline the major points of CEI’s just-released #NeverNeeded paper, which identifies regulations harmful to the coronavirus response:
During a pandemic, regulations should not get between sick people and health care, or between hungry people and food. This also applies in normal times. …
As Congress gears up for a Phase 4 stimulus, it is crucial that regulatory reform be part of the package. The top two priorities now are keeping people safe and minimizing economic damage, in that order. Regulatory sludge, as legal scholar Cass Sunstein calls it, is harming both objectives.
Read the whole thing here. The #NeverNeeded paper is here. CEI’s #NeverNeeded wesbsite is here. And you can contribute your ideas to the #NeverNeeded hashtag on Twitter.
My CEI colleagues have quickly compiled a short paper full of #NeverNeeded regulations that should be repealed in the wake of the coronavirus. These rules not only prevent effective response right now, but they make the country less able to deal with future crises. Now is the time to do some serious regulatory housekeeping. I contributed a few bits here and there, but this paper is a joint effort by CEI’s entire staff, ranging from transportation to health care to internet access to the regulatory process itself.
Read the whole thing here.