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This Week in Ridiculous Regulations

Just before the long Memorial Day weekend, the third version of the American Innovation and Choice Online Act, a major antitrust bill, was introduced in Congress in an under-the-radar attempt to make it more palatable. Agencies issued new regulations ranging from avocados to regulation sunsets.

On to the data:

  • Agencies issued 66 final regulations last week, after 61 the previous week.
  • That’s the equivalent of a new regulation every two hours and 32 minutes.
  • With 1,273 final regulations so far in 2022, agencies are on pace to issue 3,090 final regulations this year.
  • For comparison, there were 3,257 new final regulations in 2021, President Biden’s first year, and 3,218 in 2020, President Trump’s final year.
  • Agencies issued 40 proposed regulations in the Federal Register last week, after 28 the previous week.
  • With 868 proposed regulations so far in 2022, agencies are on pace to issue 2,108 proposed regulations this year.
  • For comparison, there were 2,094 new proposed regulations in 2021 and 2,094 in 2020.
  • Agencies published 449 notices last week, after 411 notices the previous week.
  • With 9,225 notices so far in 2022, agencies are on pace to issue 22,391 notices this year.
  • For comparison, there were 20,018 notices in 2021. 2020’s total was 22,458.
  • Last week, 1,196 new pages were added to the Federal Register, after 1,442 pages the previous week.
  • The average Federal Register issue in 2022 contains 313 pages.
  • With 32,288 pages so far, the 2022 Federal Register is on pace for 78,369 pages.
  • For comparison, the 2021 Federal Register totals 74,352 pages, and 2020’s is 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.
  • This is on pace for 39 economically significant regulations in 2022.
  • For comparison, there were 26 economically significant rules in 2021 and five in 2020.
  • The total cost of 2022’s economically significant regulations so far ranges from net savings of $8.31 billion to net savings of $32.62 billion. However, this figure is incomplete. Three economically significant rules issued this year do not give the required cost estimates.
  • For comparison, the running cost tally for 2021’s economically significant rules ranges from net costs of $13.54 billion to $19.36 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.
  • There are 101 new regulations meeting the broader definition of “significant” so far in 2022. That is on pace for 245 significant rules for the year.
  • For comparison, there were 387 such new regulations in 2021 and 79 in 2020.
  • So far in 2022, 348 new regulations affect small businesses, on pace for 845. Thirty of them are significant, on pace for 73.
  • For comparison, there were 912 rules in 2021 affecting small businesses, with 101 of them 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.

Doux Commerce and Jazz

One of Montesquieu’s most important contributions is the doux commerce thesis, which is French for “sweet commerce” or “gentle commerce.” In short, trade is peaceful and pleasant. It is based on persuasion and consent, and rejects force. It rewards honesty, politeness, and caring for the wants of others. Trade is both a cause of, and an effect of, civilization and peace. Countries that trade with each other are less likely to go to war.

The music historian Ted Gioia unintentionally makes a similar argument for music as a promoter of peace and exchange on page 215 of his excellent 2016 book How to Listen to Jazz:

“Perhaps we have failed to bridge the sociopolitical gulfs that separate all the peoples of the world, but at least on the bandstand we have shown both the possibility and the glorious upside from mutual respect, duty-free transactions, and non-coercive cooperation.”

I don’t know if Montesquieu, who died in 1755, would have liked jazz. But he almost certainly would have approved of its role in bringing different people from different backgrounds together in mutual respect and, often literally, in harmony.

One Way to Block Reforms: Capture the Lawyers

From p. 23 of Richard McGregor’s 2010 book The Party: The Secret World of China’s Communist Rulers:

“About one-third, or 45,000, of the 150,000 registered lawyers in China as of May 2009, were party members. Nearly all law firms, about 95 percent, had party committees, which assessed lawyers’ pay not just according to their legal work, but to their party loyalty as well. Far from being a weakness, the Party considers its penetration of the legal system to be a core strength.”

Economists often write of regulatory capture, in which regulated industries capture the agencies that regulate them, and use that relationship to feather their each other’s nests. It turns out this can also happen in the opposite direction, and governments can capture industries.

This Week in Ridiculous Regulations

A major antitrust bill from Sen. Amy Klobuchar (D-MN) is poised to hit the Senate floor without a proper hearing. Considering its contents, one understands why its sponsors are skipping proper procedure. Meanwhile, agencies issued new rules ranging from dishwashers to trucker vision.

On to the data:

  • Agencies issued 58 final regulations last week, after 79 the previous week.
  • That’s the equivalent of a new regulation every two hours and eight minutes.
  • With 176 final regulations so far in 2022, agencies are on pace to issue 3,143 final regulations this year.
  • For comparison, there were 3,257 new final regulations in 2021, President Biden’s first year, and 3,218 in 2020, President Trump’s final year.
  • Agencies issued 29 proposed regulations in the Federal Register last week, after 46 the previous week.
  • With 92 proposed regulations so far in 2022, agencies are on pace to issue 1,643 proposed regulations this year.
  • For comparison, there were 2,094 new proposed regulations in 2021, and 2,102 in 2020.
  • Agencies published 354 notices last week, after 484 notices the previous week.
  • With 1,121 notices so far in 2022, agencies are on pace to issue 19,175 notices this year.
  • For comparison, there were 20,018 notices in 2021. 2020’s total was 22,480.
  • Last week, 895 new pages were added to the Federal Register, after 1,459 pages the previous week.
  • To date, the average Federal Register issue in 2022 contains 244 pages.
  • With 3,419 pages so far, the 2022 Federal Register is on pace for 61,054 pages.
  • For comparison, the 2021 Federal Register totals 74,352 pages, and 2020’s is 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 two such rules so far in 2021, none from the last week.
  • This is on pace for 36 economically significant regulations in 2022.
  • For comparison, there were 26 economically significant rules in 2021, and five in 2020.
  • Since neither of 2022’s economically significant regulations give the required cost estimate, we cannot yet provide a total estimate of their combined cost.
  • For comparison, the running cost tally for 2021’s economically significant rules ranges from $13.54 billion to $19.36 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.
  • There are 17 new regulations meeting the broader definition of “significant” so far in 2022. This is on pace for 304 significant rules for the year.
  • For comparison, there were 387 such new regulations” in 2021 and 79 in 2020.
  • So far in 2022, 49 new regulations affect small businesses, on pace for 260. Five of them are significant, on pace for 89.
  • For comparison, 912 new rules in 2021 affected small businesses, with 101 of them 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.

No Due Date Book Club Notes: James Buchanan, Week 3


I recently joined Liberty Fund’s No Due Date economics book club, where over the next year, participants will read one book per month selected by GMU economics professor Peter Boettke. Pete will also lead group discussions and provide other resources. January’s selection is the first volume of James Buchanan’s collected works, The Logical Foundations of Constitutional Liberty, which collects many of his better-known papers from throughout his career. Buchanan was one of the cofounders of public choice theory, and won the 1986 economics Nobel.

This post, the third of three, collects my notes from those readings. I’m posting them here mostly for my benefit, so I can easily find them during the discussions, and can refer back to them later if I cite them in the future. Readers new to Buchanan or curious about the major themes of his work might benefit from skimming these notes, though I highly recommend reading the primary source. I may or may not do this for future months’ readings, depending on how useful it is.

Note that I copied and pasted these notes unedited from a Word document I kept open while reading. These notes do not always distinguish between as-is descriptions of Buchanan’s arguments, and my opinions and original thoughts about them. Reader beware.

WEEK 3: FREEDOM IN CONSTITUTIONAL CONTRACT

“The Domain of Constitutional Economics,” (from Constitutional Political Economy, 1990), pp. 377-395 (pp. 1-18 of the original book).

-What is constitutional economics? It’s about two things. One, it’s about rules and institutions affect individuals’ behavior. Two, it’s about how people decide on those rules and institutions. Elsewhere, Buchanan calls these post-constitutional and pre-constitutional analysis. Constitutional economics also emphasizes cooperation over conflict (showing Buchanan’s Hobbesian roots).

-Buchanan’s argument here is similar to Pete Boettke’s distinction between mainline economics (Smith, Mill, Hayek) and mainstream economics (Samuelson, Harvard/MIT tradition)

-Ordinary economics is about choice within constraints. Constitutional economics is about choice among constraints.

-Post-Samuelson economics is about Max U. thinking; constitutional economics is about exchange. It’s the old oikonomia-vs.-catallactics debate. Samuelsonians have also dropped methodological individualism in favor of a collective choice model, and added a romantic view of government. Lastly, they downplay or ignore the importance of institutions.

-A spectrum argument. At one extreme, individuals choose their own constitutional constraints that affect just them—dietary choices, retirement savings decisions, and so on. At the other extreme are constitutional constraints that affect an entire society—public goods, a national governmental structure, and the like. In between are club goods and membership associations that constrain parts of society.

-Distinction: Constitutional economics is about exchange and cooperation. It is positive-sum. Constitutional politics is about conflict, and has winners and losers. Not necessarily zero-sum or negative-sum, but not Pareto-optimal, either.

-Constitutional economics has roots in classical political economy and contractarian political philosophy.

-Buchanan believes the mainline economic tradition should have been exclusively based on contractarianism. He has some harsh (for him) words about Bentham and utilitarianism.

-Interesting, and not sure I agree: Buchanan sees natural rights as a rejection of methodological individualism, whether grounded in right reason, or religion, or the state. This theme needs to be further explored.

-An argument I haven’t seen before: the individualistic postulate requires that all individuals count equally. To count some individuals are more important than others requires some supraindividual power to do the weighting.

“The Constitution of Economic Policy,” (Nobel Prize lecture, 1986), pp. 455-468.

-Buchanan begins by acknowledging his intellectual debt to the Swedish economist Knut Wicksell’s work on public finance–appropos for a Nobel lecture given in Sweden, but also true.

-Wicksell didn’t assume the benevolent despot, he wanted economists to consider the real-world governments that enact policies.

-Wicksell had Buchanan’s big three postulates: methodological individualism, Homo economicus, and politics-as-exchange.

-The Max U., institution-ignoring thinking that came to dominate post-Samuelson economics doesn’t work well for studying politics. That’s why public choice is novel to many mainstream economists, despite its mainline origins.

-The person who chooses between apples and oranges in the store is the same person who chooses between Candidates A and B in the voting booth. Institutions matter because they change how this person decides in each circumstance. Market institutions are different than political institutions, so the same people have different decision-making incentives in those two environments. A normative analyst would add that this is one reason smart people often choose bad policies.

-There is no need for net wealth or net income to be an individual’s dominant behavioral motive. It can be anything; different people have different preferences. But they pursue those different ends through more-or-less Homo economicus methods. I add that this could also be because of marginalism. Once wealth or income reach diminishing returns, other factors become more important at the margin.

-Reform should focus on the constitutional level, not on this or that policy. Institutions matter.

-The degree of unanimity in political exchange is analogous to the degree of freedom to exchange in markets.

-Transaction costs mean achieving unanimity in practice is usually impossible. This doesn’t mean rejecting unanimity as an ideal; just get as close to it as marginal and transaction costs allow.

-In the stage of constitutional choice, people operate behind a Rawls-style veil of uncertainty (do I recall that Buchanan employed this concept before Rawls did?). They pick rules they believe give them the best chance of a fair outcome, not which they believe will most benefit them personally.

-Wicksell’s lack of normativity about distribution questions, beyond democratic consent, is a reason for his neglect. Samuelsonian economists are not interested in Wicksellian questions. They care more about direct outcomes than abstract processes.

-Deficit financing probably does not pass the contractual test. Future generations would probably not consent to paying for their parents’ deficit spending.

“The Royal Swedish Academy of Sciences Press Release” (1986), pp. 3-7.

-Briefly summarizes Buchanan’s main themes: political actors are as self-interested as market actors; focus on rules and institutions; the unanimity principle as a benchmark ideal; politics as an exchange process for mutual benefit, rather than a means of redistribution; opposition to deficit spending.

“Better than Plowing,” (1986), pp. 11-17.

-Buchanan’s autobiographical essay, written so he could shrug off reporters after his Nobel. The title alludes to his rural upbringing.

-He grew up poor on a Tennessee farm, though his grandfather was a one-term populist governor of Tennessee. After college he served four years in the military during World War II, under Admiral Nimitz and others. A year at Columbia made him resent coastal elites and hardened his attitudes against discrimination.

-He attended Chicago for graduate school, where Frank Knight converted him from a populist libertarian socialist into a free-market advocate. A chance discovery of Knut Wicksell’s book in the Harper library changed his career. Knight and Wicksell would remain Buchanan’s biggest influences.

-He also spent a post-graduate year in Italy studying public finance, which influenced his early work (note that Italy’s government did not take these economists’ advice).

-He learned from Earl Hamilton, Chicago professor and Journal of Political Economy editor, the sound career advice of “keep the ass in the chair.”

This Week in Ridiculous Regulations

It was a four-day week for the Federal Register in honor of Veterans Day. In the news, inflation reached a 30-year high, President Biden signed a trillion-dollar infrastructure bill into law, and a United States senator got his feathers in a bunch over Big Bird’s vaccination status. Agencies issued new rules ranging from turtle excluder devices to the United Soybean Board.

On to the data:

  • Agencies issued 52 final regulations last week, after 63 the previous week.
  • That’s the equivalent of a new regulation every two hours and 14 minutes.
  • With 2,750 final regulations so far in 2021, agencies are on pace to issue 3,228 final regulations this year. 2020’s total was 3,218 final regulations.
  • Agencies issued 34 proposed regulations in the Federal Register last week, after 33 the previous week.
  • With 1,810 proposed regulations so far in 2021, agencies are on pace to issue 2,085 proposed regulations this year. 2020’s total was 2,222 proposed regulations.
  • Agencies published 343 notices last week, after 495 notices the previous week.
  • With 19,254 notices so far in 2021, agencies are on pace to issue 22,182 notices this year. 2020’s total was 22,480.
  • Last week, 1,225 new pages were added to the Federal Register, after 1,505 pages the previous week.
  • The average Federal Register issue this year contains 291 pages.
  • With 62,891 pages so far, the 2021 Federal Register is on pace for 72,455 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 18 such rules so far in 2021, two 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 $5.42 billion to $9.26 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 353 final rules meeting the broader definition of “significant” in 2021, with four in the last week. This is on pace for 407 significant rules in 2021. 2020’s total was 79 significant final rules.
  • In 2021, 773 new rules affect small businesses; 89 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.

Inflation Hits High Mark with Consumer Price Climb in October 2021, but Policymakers Can Take Steps to Help: CEI Statement

This statement originally appeared at cei.org.

Bad news for consumers – prices rose 0.9 percent in October and to a 30-year high, according to data released today by the Labor Department. CEI Senior Fellow Ryan Young explains ways policymakers can help tamp down on inflation:

“Inflation increased yet again. Inflation is what happens when the supply of money grows faster than the supply of goods and services. The goal is to keep their growth roughly in sync. There are two things policymakers can do to help restore the balance.

“One is for the Federal Reserve to tighten up the money supply. While it has said it will do this starting next year, it will face heavy political pressure to keep it loose. Tighter money makes government debt more expensive to pay back, and already-record deficit spending is becoming worse with the infrastructure and social spending bills. Politicians also push for looser money when elections draw near. A series of high-level vacancies at the Fed will create opportunities to pack the Fed with officials who will do what the administration wants. This is not good news for tamping down inflation from the monetary side.

“The second way to fight inflation is to boost the supply of goods and services. Policymakers can help by removing trade restrictions and other regulations that are sludging up supply networks, and by easing occupational licenses, permit requirements, zoning and land-use regulations, and other barriers that discourage people from working. COVID remains a wild card. More vaccinations will help, but if another variant emerges, people will be reluctant to continue opening up.”

Pierre Bayle on Media Bias

Bias is nothing new, and it likely has gotten neither better nor worse over time. People tend to think that media bias and misinformation are getting worse in the social media age, ironically because the human brain is prone to recency bias, availability bias, and pessimistic bias. But as Pierre Bayle wrote in the 1680s in his Nouvelles de la République des Lettres back in the 1680s:

“History is dished up very much like meat. Each nation and religion takes the same raw facts and dresses them in a sauce of its own taste, and each reader finds them true or false according to whether they agree or disagree with his prejudices.”

A little bit of awareness of this tendency can go a long way towards minimizing the problem of bias and misinformation. In today’s time, that means avoiding the cable news channels, purging low-quality sources from one’s social media feeds (or abstaining entirely), putting a little effort into statistical literacy, and employing a little bit of skepticism, especially towards too-good-to-be-true stories that appeal to one’s ideological priors. Keeping an eye on the longer arcs of history, and not just today’s ephemera, is also useful. I often find myself simultaneously a short-term pessimist and a long-run optimist; it turns out that both can be true.

Bayle’s emphasis on tolerance towards people with different beliefs, apparently still as radical in our time as it was in his, is also helpful, both here and in many other parts of life.

DC Antitrust Suit Against Amazon Could Actually Harm Consumers by Making Online Goods More Expensive

This press release was originally posted on cei.org.

The District of Columbia’s Attorney General filed a lawsuit today against Amazon, alleging the tech company is engaged in anti-competitive behavior by controlling retail prices online.

Director of CEI’s Center for Technology and Innovation Jessica Melugin said:

“Amazon should be free to set the terms for third party sellers on its own platform, just as sellers are free to pass on using Amazon’s Marketplace if they don’t like the terms. Amazon is pushing to offer the lowest prices possible and while that may not always please third-party sellers, it’s the dead opposite of consumer harm.”

Senior Fellow Ryan Young said:

“The District of Columbia’s Amazon lawsuit has terrible timing, for two reasons. One, it comes on the heels of the worst pandemic in a century, during which online ordering of groceries and other goods helped keep people out of crowded stores. If successful, the District’s antitrust lawsuit would make online goods more expensive. This would hit lower-income consumers and vulnerable populations the hardest. It would also harm sellers, who are having a difficult time as it is during a tough recovery.

“Two, competition is already increasing. Other retailers such as Walmart now have their own third-party seller programs that compete with Amazon’s. This is on top of existing online options small sellers can use, such as Ebay, Etsy, and Shopify, as well as numerous niche markets, such as Reverb for musical equipment and Newegg for computer products.”

Read more:

This Week in Ridiculous Regulations

Congress passed a $1.9 trillion spending bill, some of which may actually be COVID-related. Agencies issued new rules ranging from eastern hellbenders to reentry licenses.

On to the data:

  • Agencies issued 83 final regulations last week, after 60 the previous week.
  • That’s the equivalent of a new regulation every two hours and one minute.
  • With 642 final regulations so far in 2021, agencies are on pace to issue 3,415 final regulations this year. 2020’s total was 3,327 final regulations.
  • Agencies issued 63 proposed regulations in the Federal Register last week, after 47 the previous week.
  • With 380 proposed regulations so far in 2021, agencies are on pace to issue 1,887 proposed regulations this year. 2020’s total was 2,021 proposed regulations.
  • Agencies published 432 notices last week, after 428 notices the previous week.
  • With 4,167 notices so far in 2021, agencies are on pace to issue 22,165 notices this year. 2020’s total was 22,480.
  • Last week, 1,069 new pages were added to the Federal Register in a three-day week, after 1,300 pages the previous week.
  • The average Federal Register issue this year contains 302 pages.
  • With 14,216 pages so far, the 2021 Federal Register is on pace for 75,638 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 two 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 net savings of $100.7 million to net costs of $362.5 million. 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 11 final rules meeting the broader definition of “significant” in 2020, with two in the last week. This is on pace for 59 significant rules in 2021. 2020’s total was 79 significant final rules.
  • In 2021, 111 new rules affect small businesses. Two 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.