Category Archives: Regulation of the Day

CEI’s Battered Business Bureau: The Week in Regulation

It was a short work week due to the Labor Day holiday, but agencies still found the time to finalize new regulations covering everything from unfinished wood to fleeing felons.

On to the data:

  • Last week, 48 new final regulations were published in the Federal Register, after 80 the previous week.
  • That’s the equivalent of a new regulation every three hours and 30 minutes.
  • So far in 2015, 2,306 final regulations have been published in the Federal Register. At that pace, there will be a total of 3,276 new regulations this year, which would be more than 200 fewer rules than the usual total of 3,500-plus.
  • Last week, 1,322 new pages were added to the Federal Register, after 1,313 pages the previous week.
  • Currently at 55,011 pages, the 2015 Federal Register is on pace for 78,141 pages.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Nineteen 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 $1.32 billion to $1.41 billion for the current year.
  • 194 final rules meeting the broader definition of “significant” have been published so far this year.
  • So far in 2015, 383 new rules affect small businesses; 55 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.

Regulation of the Day Update: Pulling a Rabbit Out of a Hat

Not too long ago, I told Marty Hahne’s story. He is a long-time children’s magician who got in trouble with the USDA for using an unlicensed rabbit in his shows. Among other things, he also had to give the agency proof that he was making regular vet visits, and submit to random inspections of his home. The topper was that he had to submit a 28-page disaster plan covering how he would care for his rabbit under at least 21 different calamities.

The publicity surrounding the story caused a bit of a blow to the USDA’s self-esteem. In today’s Federal Register, the USDA’s Animal and Plant Health Inspection Service announced that it is temporarily suspending the relevant regulations. It is doing this “in order that we may undertake a review of their requirements.”

Time will tell what comes out of this review, but hopefully magicians won’t have to apply for federal license if they want to pull a rabbit out of a hat.

Regulation of the Day 232: Pulling a Rabbit Out of a Hat

rabbit in magician hat
Marty Hahne is a magician in Missouri. He has been putting on magic shows for kids for almost 30 years under the nom de guerre Marty the Magician. Back in 2005, he got in trouble with the USDA. Turns out he was using an unlicensed rabbit for his grand finale of pulling a rabbit out of a hat. Hahne quickly found out that the USDA’s regulations for magicians’ rabbits, in force since 1966, are both strict and extensive.

Eight years later, the agency is still harassing him. Here are some of the indignities the USDA is inflicting on Hahne and his animal assistant:

Hahne has an official USDA license, No. 43-C-0269, for Casey — a three-pound Netherland dwarf rabbit with a look of near-fatal boredom. The rules require Hahne to pay $40 a year, take Casey to the vet and submit to surprise inspections of his home.

Also, if Hahne plans to take the rabbit out of town for an extended period, he must submit an itinerary to the USDA. The 1966 law that started all of this was four pages long. Now, the USDA has 14 pages of regulations just for rabbits.

Now, under new regulations, “animal exhibitors” such as Hahne are required to file written disaster plans to the USDA covering at least 21 types of disaster, from broken air conditioners to hurricanes. Hahne’s disaster plan for Casey is 28 pages long, and is considered short for its genre. An attorney was kind enough to draft it for him pro bono.

When the Washington Post picked up on Hahne’s story, it spread like wildfire on weird news sites, and the Internet had a collective belly laugh at the USDA’s expense. After this blow to its pride, the agency reluctantly announced that Secretary Tom Vilsack has ordered a review of the regulations, insisting that “common sense be applied.”

This is not the same as saying the agency will liberalize its strict magicians’ rabbit policy. But the phrase “common sense” does imply it.

Regulation of the Day Update: Olive Oil Victory

I recently posted that new EU regulations would require restaurants to use factory packaged and sealed bottles of olive oil. This would put small artisanal producers out of business, and reduce consumer choice. Fortunately, the UK Telegraph is reporting that the EU is dropping the olive oil rules due to a public outcry (hat tip Walter Olson):

In a humiliating U-turn, Dacian Ciolos, the European commissioner for agriculture, admitted that the proposed ban on traditional olive oil jugs, had provoked popular loathing, or “misunderstanding”, from the people that he said wanted to protect for their own good.

This is why regulatory transparency is so important. The more people learn about regulation, the less they tend to like it. And when a whopper such as this one comes down the pike, it won’t get repealed unless people find out about it. Mr. Ciolos appears not to have learned his lesson, but results are what matter. He lost. More importantly, consumers and small olive oil producers won.

Regulation of the Day 231: Serving Olive Oil

When you sit down at a Mediterranean restaurant, your server will typically set down some bread on the table, then pour some olive oil into a saucer or small bowl for dipping. Many restaurants also keep small jugs of olive oil as part of their table setting for general use. It’s a delicious way to begin a meal.

New European Union regulations are set to change this centuries-long practice. Starting January 1, 2014, any olive oil served at table “must be in pre-packaged, factory bottles with a tamper-proof dispensing nozzle and labelling in line with tight EU standards.” That means no more saucers of oil for dipping, and no more refillable jugs at the table.

Most complaints about the rule have been directed at the EU’s micromanagemerial tendencies, and there is certainly something to it. But there is also a public choice angle that’s worth looking at.

Many restaurants buy their olive oil from small family farms that aren’t able to comply with the new labeling and sealing standards. Restaurants buy from them because many diners prefer their olive oil to the more homogenous product put out by larger firms. These larger firms are also precisely the people who will benefit from the new rules. A public choice theorist would point out that the big producers very likely had something to do with pushing for their passage, and their added business comes at the expense of smaller farms – and consumers’ palettes.

This kind of rent-seeking behavior is all too common. And the more regulations there are, the more rent-seeking one sees. These olive oil rules are only the latest example. Most supporters of the rule might be motivated by health and safety, but certain other supporters are more concerned with securing an artificial competitive advantage for themselves.

Regulation of the Day 230: The Temperature of Beer

beer in ice
The state of Indiana regulates the temperature at which convenience stores may sell beer. Specifically, they must sell it at room temperature. Cold beer is forbidden. The law, unique to Indiana, is presumably motivated by temperance concerns. People can’t buy beer on the spur of the moment and it drink it cold right away. They have to take it home and refrigerate it first. Instead of instant gratification, people have to plan ahead. This promotes more responsible drinking habits, the thinking goes.

Then again, the law exempts wine sales. Any Indianan who wants to can buy a chilled bottle of wine from the local 7-11 and drink it immediately. Instead of keeping people sober, the law amounts in practice to discrimination against beer. Wine producers might not mind that so much, but nearly everyone else does.

Even so, a push to overturn the law in the legislature failed earlier this year. That’s why three convenience store chains are suing to overturn the law. The case is currently moving through federal court. An employee of one chain told WISH, a local television station:

“Thorton’s has not built a convenience store in Indiana since 2006,” said David Bridgers of Thorton’s convenience stores, “for the sole reason of its antiquated alcohol laws.”

So not only does Indiana’s warm beer law fail to promote temperance, it is directly hampering job creation in the state.

The plaintiffs also argue that Indiana’s room-temperature beer law is unconstitutional, violating the equal protection clause in two ways. One, the law only applies to convenience stores. Grocery stores and other types of retailers may sell cold beer. Different retailers shouldn’t be treated differently, they argue. Two, wine should not have an artificial competitive advantage over beer. Government’s job is to ensure that they compete as equals on level ground, not to tilt that ground unequally.

Scot Imus of the IPCA, a trade association for convenience stores, told a trade publication that “We are confident that the court will agree with us that it is not the job of government to pick winners and losers in the marketplace.”

Most Indianans are hoping he’s right.

Regulation of the Day 229: Educating Yourself

We live in a golden age of information. These days, anybody who wants to can get a college-level education without ever setting foot on a college campus. An outfit called the Teaching Company doesn’t confer degrees, but it does sell undergraduate-level lecture courses in history, philosophy, literature, the arts, the sciences, and more.

Of course, they charge money. Other outfits don’t. Coursera is a new company that has already attracted nearly 1.7 million customers. You can take online courses for free in almost any subject from medicine to economics to electrical engineering. The lectures are taped at top universities such as Columbia, Vanderbilt, Stanford, and more. You can even take an introductory class in guitar from the Berklee College of Music. Now you don’t need to rack up intimidating levels of debt to learn from the best professors at the world’s best universities.

Minnesota’s Solons would prefer that their state’s residents miss out on this golden age. State law bans unauthorized college courses from the state. Of course, this can’t really be done in the Internet age. Coursera should have pointed out how absurd this law is. Protecting people from free and abundant knowledge is not exactly doing them a service. There’s no force or fraud here, and Coursera does not even confer degrees. Despite all this, Coursera decided to take the appeasement route by posting the following notice:

Coursera has been informed by the Minnesota Office of Higher Education that under Minnesota Statutes (136A.61 to 136A.71), a university cannot offer online courses to Minnesota residents unless the university has received authorization from the State of Minnesota to do so. If you are a resident of Minnesota, you agree that either (1) you will not take courses on Coursera, or (2) for each class that you take, the majority of work you do for the class will be done from outside the State of Minnesota.

Fortunately, not everyone is a regulatory Neville Chamberlain. George Mason University’s Alex Tabarrok, along with his colleague Tyler Cowen, have just started up their own online university, MRUniversity. The name comes from their blog, Marginal Revolution (though I do sometimes pronounce it “Mr. University” in my head). Tabarrok, channeling his inner Churchill, posted this:

Tyler and I wish to be perfectly clear: unlike Coursera, we will not shut down MRU to the residents of Minnesota. We are prepared to defend our rights under the First Amendment to teach the good people of Minnesota all about the Solow Model, water policy in Africa, and the economics of garlic–even if we have to do so from a Minnesota jail!

Should it come to that, it would take mere seconds to decide the court case on the merits. Maybe the Institute for Justice, with its long track record of free speech litigation, can weigh in. With all the bad publicity this story is getting, maybe the mere threat of a lawsuit would cause Minnesota’s resident Savonarolas to back down.

At the risk of making this post illegal to read in Minnesota, I close by encouraging readers interested in free speech to read John Milton’s essay “Areopagitica.” It is one of the most stirring, passionate and eloquent defenses of free expression ever put to paper. The full text is even online for free, courtesy of Dartmouth University.