Category Archives: regulation

The Cost of Regulation

Posted on August 5, 2008 | Comments Off on The Cost of Regulation

Wayne Crews and I have a piece in today’s Investor’s Business Daily about the extent and cost of regulation.

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Posted in Economics, Publications, regulation, Spending, Stimulus, Taxation

Four Letter Words

Posted on July 24, 2008 | Comments Off on Four Letter Words

In researching an article, I just learned that “regulation is no longer a four letter word.”

Right on. “Regulation” is, in fact, a ten letter word.

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Posted in General Foolishness, regulation

A New Regulatory Order?

Posted on June 17, 2008 | Comments Off on A New Regulatory Order?

Harvard economist Larry Summers has some ideas for a new regulatory order in the Financial Times. In typical Summers fashion, his recommendations are moderate. His moderation comes at the cost of ignoring incentives.

His first principle is “no regulatory competition.” Regulators shouldn’t compete against each other. Let’s take this principle to its logical conclusion. Only one regulator would be allowed — that would be the federal government. As with most monopolies, bad incentives abound.

It is a good thing that, say, investment firms are free to move to New Jersey if New York’s regulations are too stringent. Or if taxes are too high; the same arguments apply to tax competition. “Forum shopping” gives regulators more incentive to be reasonable.

Summers also expresses concern over regulatory capture. His concern is legitimate, but there’s no correlation with forum shopping, as he implies. Regulatory capture happens when something is regulated. The only way to stop regulatory capture is to stop regulating, period.

When constructing a regulatory order, we have three choices: 1) no regulators, 2) a single regulator (the federal government), and 3) multiple, competing regulators (the states).

I think I know which I prefer. Failing that, I’ll take the third option.

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Posted in Economics, Political Animals, Public Choice, regulation

Crafty Regulators

Posted on May 30, 2008 | Comments Off on Crafty Regulators

Contrary to popular belief, regulators tend to be very clever people. They know the rules of the game, and they know to how to use them to their advantage.

The latest example of bureaucratic perfidy is a recent decision by EU officials to raise tariffs on some high-tech goods from the United States. This doesn’t seem like a smart policy at first glance. It will make goods more expensive for European consumers. The tariffs might also be a violation of the Information Technology Agreement. The U.S. is not pleased, and is launching a WTO case.

There are two ingenious ways that revenue-hungry EU regulators are gaming the system.

One is taking advantage of how bureaucratized the WTO is. The current dispute is only in the first step right now, which is a formal consultation between the WTO and the EU. I believe the next step involves a strongly worded letter.

The EU regulators who imposed the tariffs know that the case will take years to decide. Their tariffs — and revenues — will stand untouched until then. They know they can violate free trade agreements almost at will, and years will pass before they’ll have to answer for it. Very clever.

The second spark of regulatory intelligence is a creative interpretation of the Information Technology Agreement (ITA). Under the agreement, computer monitors are duty-free, but televisions are not. So the EU is arguing that people are using larger computer monitors primarily as televisions, and not as computer monitors. That way they can be taxed.

Of course, only the people actually buying and using large computer monitors can say what they’re using them for. But the regulators have made a good enough argument to stall the WTO.

These are some very smart people. What a shame then, that they are using their talent to hinder trade instead of to free it.

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Posted in Economics, Public Choice, regulation

TruckNutz Update

Posted on May 2, 2008 | 1 comment

Remember the kerfuffle in Florida over, of all things, fake testicles on the back of pickup trucks?

Via Fark, the situation has resolved itself. As expected, the TruckNutz ban did not pass. Kudos to Florida Senator Carey Baker for making the attempt, though. All the time that the legislature wasted debating his ban was time not spent hurting the state’s economy.

I love it when legislatures waste their time on silliness. More, please.

1 Comment

Posted in Political Animals, regulation

Beyond Parody

Posted on March 12, 2008 | 1 comment

Florida’s legislature is taking action on one of the most pressing problems facing the state – the amount of toilet paper in restaurant bathrooms.

“State Senator Victor Crist, a Republican from Tampa, felt the problem was so important, a law must be passed to protect the backsides of anyone in Florida.”

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Posted in Political Animals, regulation

Above the Law

Posted on March 10, 2008 | Comments Off on Above the Law

Some police officers in Montgomery County, Maryland, apparently feel that speeding tickets do not apply to them.

This is one thing if they’re responding to an emergency.

It is another thing when “The police union says officers shouldn’t pay because the citations are issued to the owner of a vehicle, in this case the county, and not to the driver.”

Too clever by half. If we have to pay citations from those Orwellian traffic cameras, then they should, too.

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Posted in regulation

Holy Overreaction, Batman!

Posted on February 1, 2007 | Comments Off on Holy Overreaction, Batman!

You’ve probably heard about the recent bomb scare in Boston.

In a guerilla marketing scheme gone awry, some crudely made lightboards featuring poorly drawn cartoon characters from Aqua Teen Hunger Force were mistaken for bombs. The media coverage of the scare has been wall-to-wall. Predictably, most media outlets have missed the most important part of the story – the Boston government’s epic overreaction. We’re talking gross incompetence here.

CNN dutifully notes the following facts:

-The Boston city government shut down a major bridge and a section of the Charles River.

-The light boards were not bombs. They were, in fact, light boards. One witness described them as “Lite-Brites,” which are toys for children – not bombs.

-The Lite-Brites were also put up in nine other cities. None of them thought they were under terrorist attack.

-Boston’s police commissioner called the incident “unconscionable.” If he had been talking about the city’s overreaction, he would have been absolutely correct. Sadly, he was instead being absolutely stupid.

-Most humorously, the mayor of Boston – without a trace of irony – blamed the incident on “corporate greed.” Huh?

If anything, the “perpetrators” should be suing the governments of Boston and Massachusetts for gross incompetence. After all, if this is the state of homeland security in Boston, nobody is safe. Today we have witnessed absolute failure in what is perhaps government’s most important responsibility.

As a fan of Aqua Teen Hunger Force, I am pleased that this unexpected attention will boost the show’s popularity. Even so, stories like this tend to diminish my faith in the goodness and rationality of my fellow man.

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Posted in General Foolishness, Political Animals, regulation, Security Theater