This Week in Ridiculous Regulations

Posted on September 30, 2019 | Comments Off on This Week in Ridiculous Regulations

Congress is out of session for the next two weeks, and the impeachment investigation will likely dominate headlines for some time to come. Meanwhile, the 2019 Federal Register topped 50,000 pages and rulemaking agencies published new regulations ranging from toll-free numbers to voluntary rabbit grading.

On to the data:

  • Last week, 73 new final regulations were published in the Federal Register, after 46 the previous week.
  • That’s the equivalent of a new regulation every two hours and 18 minutes.
  • Federal agencies have issued 2,195 final regulations in 2019. At that pace, there will be 2,919 new final regulations. Last year’s total was 3,367 regulations.
  • Last week, agencies published 421 notices, for a total of 16,198 in 2019. At that pace, there will be 21,540 new notices this year. Last year’s total was 21,656.
  • Last week, 1,727 new pages were added to the Federal Register, after 1,084 pages the previous week.
  • The 2019 Federal Register totals 51,363 pages. It is on pace for 67,804 pages. The 2018 total was 68,302 pages. The all-time record adjusted page count (which subtracts 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. Four such rules have been published this year. Six such rules were published in 2018.
  • The running cost tally for 2019’s economically significant regulations currently ranges from savings of $4.30 billion to $4.44 billion, mostly from estimated savings on federal spending. The 2018 total ranges from net costs of $220.1 million to $2.54 billion, depending on discount rates and other assumptions.
  • Agencies have published 50 final rules meeting the broader definition of “significant” so far this year. 2018’s total was 108 significant final rules.
  • So far in 2019, 373 new rules affect small businesses; 16 of them are classified as significant. 2018’s totals were 660 rules affecting small businesses, with 29 of them significant.

Highlights from last week’s new final regulations:

For more data, see “Ten Thousand Commandments” and follow @10KC and @RegoftheDay on Twitter.

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Posted in regulation, Uncategorized

Andrew J. Newman – Safavid Iran: Rebirth of a Persian Empire

Posted on September 27, 2019 | Comments Off on Andrew J. Newman – Safavid Iran: Rebirth of a Persian Empire

Andrew J. Newman – Safavid Iran: Rebirth of a Persian Empire

The Safavid dynasty was one of the most liberal periods in Iranian history. Iran, of course, was not a nation-state in today’s sense of the term until the 20th century. Safavid territory also included Baghdad and ranged up north into Afghanistan, several of the steppe countries and parts of Georgia, including Tiflis (now Tblisi), and ranged east almost as far east as Bukhara. It lasted from about 1510 to 1722, with a few dying embers lasting until 1736, a little bit like post-Louis XVI Bourbons.

For context, the Safavid dynasty ranged roughly from just before Europe’s Reformation and post-Columbian exploration age through the Scientific Revolution and the early Enlightenment. It began roughly a century after Tamerlane conquered most western and northern Asia. China’s Ming dynasty reached its peak and was overthrown during the Safavid era. The most famous Safavid monarch was Abbas I (reigned 1588-1629, roughly contemporaneous with Shakespeare, the second half of Elizabeth I’s reign, and her successor James I). But the generations before and after Abbas I were also comparatively liberal. One of the few opinions Newman ventures is that the Safavids were not a one-hit wonder with Abbas I as the dynasty’s only notable head.

The regime’s official religion was Twelver Shi’ism, which was an important development in Islamic history. But by the standards of their time, the Safavids were highly tolerant of both other kinds of Islam and non-Islamic religions. They compared favorably to both the Europeans of their time and the Iranian government in ours.

Art, architecture, poetry, and literature thrived, both in court and among regular people. Despite ongoing tensions with the Ottomans to the East and limited direct ties to Europe, an openness to trade also made Safavid territories prosperous enough where high art and exotic goods were affordable even to the middle class; even in Europe such things as single-page prints were still mostly the province of the wealthy. At the same time, the Safavid Dynasty was founded on military power, survived by the sword, and ultimately died by it. Its liberalism was in comparative, not economic terms. It is a complex, multifacted period, and was interconnected with what was going on in Europe, Turkey, Russia, India, and China.

Newman’s book is drily written, focusing heavily on kings and battles, and names and dates. If the reader enters with some knowledge of world history from 1500-1700, and a willingness to Google new names, places, and terms, they can tease more insights out of Newman’s narrow and literal focus. His grayscale portrait could have used some color. Unfortunately, English-language histories of the period are hard to come by, so Newman it is. Readers are mostly on their own for discerning the Safavid dynasty’s larger significance and context, and are rarely given interpretations to agree or disagree with. This was still a profitable read, but requires a more active approach on the reader’s part than most books.

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Posted in Books, History, International, Uncategorized

Lawrence Freedman – Strategy: A History

Posted on September 26, 2019 | Comments Off on Lawrence Freedman – Strategy: A History

Lawrence Freedman – Strategy: A History

There are a few subjects I’ve always found uninteresting, despite my best efforts. Most of them involve conflict, rather than cooperation; this may be why I am so drawn to economics, which is the study of human cooperation. Uninteresting (to me) conflicts include theological disputes, most military history, and strategy of the zero-sum variety.

This book didn’t change my mind about military history, but the rest of it is surprisingly engaging. It is also very long—I recommend the audio version. Organized mostly chronologically, the book starts with ancient Greek, Roman, and biblical figures, quickly dispenses with the cliched Machiavelli and Sun Tzu, and gives John Milton’s Paradise Lost a surprising turn.

The part titled “Strategy from Below” is mostly about different theories of socialist revolution, which has a wealth of different approaches and strategic philosophies that apply well outside that ideology. One complication is that socialism is a top-down strategy to social organization; “Strategy from Above” would have been a more accurate title. He also could have done more to highlight the differences between Marx’s belief that revolution could only happen in an already-industrialized country; Lenin’s focus on small professional cadres; Mao’s blend of pastoralism and centralized decentralization; and various decentralized anarchist movements. But I still learned a lot from Freedman’s treatment.

Freedman’s discussion of the civil rights movement is excellent, and far more rewarding than the usual black-and-white contrast between Gandhi and Martin Luther King, Jr.’s non-violence versus more radical strategies. As is often the case, there is much more to the story, with many in-between strategies working towards the common goals of equal rights and ending segregation.

The mostly white and middle-class 1960s campus radicals often come off as privileged twits by comparison. Counterculture has great value in moving social norms over in favor of individualism and dynamism, against war. The movement also produced some excellent art, literature, and music. But it fell short in more serious areas such as political philosophy and strategy, and badly failed in staying clear of self-evidently dumb new age philosophy.

The next part, “Strategy from Above,” focuses mainly on business and management, which is more a blend of blending top-down management strategies in firms that are constantly reacting to new developments in bottom-up emergent orders. The section title is poorly chosen, but the content is good.

As the baby boomer generation entered middle age and middle management, some of its members became part of a new management guru movement. It came complete with ghostwritten self-help books, outrageous speaker fees, and power suits with built-in shoulder pads. Freedman calls them these management gurus the snake oil salesmen they are, and shares some amusing behind-the-scenes stories from this movement’s heyday.

But life did not begin with the baby boomers. Freedman begins this movement’s roots to about a century before, while offering an unfortunately conventional and easily disproven account of Standard Oil and the early antitrust movement. At the same time, he is critical of Frederick Taylor and his top-down Taylorite management philosophy, which was espoused by early-20th century thinkers from Rockefeller’s nemesis Ida Tarbell to President Woodrow Wilson.

Freedman doesn’t go into detail about this, but Taylorist thinking grew out of the German Historicist school. Its regimented, top-down ethos inspired much fascist and corporatist public policy, most openly by Mussolini. More bottom-up inclined thinkers such as Mises and Hayek both grew up in Austria when German Historicism was at its peak, and developed their emergent-order liberalism in part as a direct reaction against the Historical School.

Later sections introduce underappreciated figures such as Henry Simon, William Riker (the political scientist, not the Star Trek: The Next Generation character), and Mancur Olson. Freedman also discusses the role of game theory in corporate, military, and government strategies in the post-war era.

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Posted in Books, Competition, History

Robert L. Wolke – What Einstein Told His Cook: Kitchen Science Explained

Posted on September 25, 2019 | Comments Off on Robert L. Wolke – What Einstein Told His Cook: Kitchen Science Explained

Robert L. Wolke – What Einstein Told His Cook: Kitchen Science Explained

A book-length series of bite-size vignettes on food science; fans of the celebrity chef Alton Brown will find much to like here. For example, if Teflon doesn’t stick to anything, how does it stick to a non-stick pan? The pan surface is roughened at a micro-level by either blasting it with tiny droplets of molten metal (stainless steel pans) or DuPont’s Autograph process (aluminum pans), and these tiny rough teeth hold onto the Teflon molecules and keep them in place.

Why is water boiled in a microwave not as hot as water boiled in a tea kettle? Because the microwaves only penetrate about an inch into the water, while a tea kettle takes better advantage of convection to heat the entire body of water more evenly. Heated water rises, pushing cooler water to the bottom. It then itself gets heated, and then rises up, and so on. Bubbles also aid the convection process.

Wolke, a chemist, also goes into nutrition science, explaining at a molecular level the different types of fats, sugars, and oils. He explains what makes some foods tasty, how they can be ruined, and why fish doesn’t have to smell fishy—they actually have a neutral odor while alive, but begin to decay extremely quickly in air, so they gain that fishy smell just a few hours  after being caught. At this point they are not toxic, just smelly, so don’t worry about it too much while grocery shopping.

Though I enjoy foodie-style culinary experiences, I’m not exactly a food sophisticate. Material like this makes me a better cook even for everyday meals because knowing why something works means I’ll remember it far better than rote memorization of the what, without greater context. In that sense, Wolke’s book is not just entertaining, but useful.

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Posted in Books, Science, Uncategorized

Antitrust Astroturf Activism

Posted on September 24, 2019 | Comments Off on Antitrust Astroturf Activism

Not too long ago, I pointed out that antitrust regulation is often gamed by special interests and rent-seekers. A recent story in The Wall Street Journal gives a fresh example. A group called the Free and Fair Markets Initiative (FFMI) has been advocating for antitrust actions against Amazon. Unsurprisingly, some of its funders are Amazon’s competitors:

Simon Property [a major shopping mall landlord] is fighting to keep shoppers who now prefer to buy what they need on Amazon; Walmart is competing with Amazon over retail sales; and Oracle is battling Amazon over a $10 billion Pentagon cloud-computing contract.

There is more:

The grass-roots support cited by the group was also not what it appeared to be. The labor union says it was listed as a member of the group without permission and says a document purporting to show that it gave permission has a forged signature. The Boston professor says the group, with his permission, ghost-wrote an op-ed for him about Amazon but that he didn’t know he would be named as a member. The California businessman was dead for months before his name was removed from the group’s website this year.

Free and Fair Markets, or FFMI, declined to reveal its funders or disclose if it has directors or a chief executive.

Oracle in particular has a history of using Washington to dispatch competitors. Back during the 1990s Microsoft case, for example, the company ran its own independent investigation against Microsoft that may have crossed some ethical boundaries.

It also turns out that a public relations firm, Marathon Strategies, runs FFMI. According to FFMI’s website, the group “works to raise awareness about troubling trends across the economic landscape that undermine competition and growth.” Despite this broad mission, nearly all of FFMI’s activity is aimed against a single company. That alone is a red flag for an astroturf group, as opposed to a natural grassroots group. Combined with everything else The Wall Street Journal uncovered, it is hard to conclude FFMI is anything else.

Which brings up an important concept for the current antitrust battle: the difference between pro-business and pro-market. I’ve made the distinction before in connection to other issues. FFMI, for all its anti-Amazon efforts, is a classic pro-business group. In particular, it is pro-Simon Property, pro-Walmart, pro-Oracle, and pro-its other clients, if any.

Competition and fairness would be better served by pro-market policies. These do not aim to help or harm individual businesses. Pro-market policies set up an ongoing, churning competitive process, in which companies compete, adapt, succeed, and often fail on the merits. Pro-business interests, by contrast, often seek a comfy set result, which incumbents would like to maintain for as long as they can.

Antitrust enforcement advocates often use morals and values language in explaining their positions. They see a government captured by corporate interests, and they’re not always wrong. But the solution to regulatory capture is not more regulation. Antitrust regulation, as practiced, falls rather short of the idealized theory of government relied on by most antitrust advocates. Moreover, the insincere ones like FFMI routinely adopt that same virtuous language as a cover story to hide behind. FFMI, for example, says it favors a level playing field, even as its actions try to tilt it against consumers’ wishes.

For more on how antitrust regulation often works against its own goals, see Wayne Crews’ and my recent paper. For more on why the best ways to fight rent-seeking are outside Washington, see Fred Smith’s and my paper “Virtuous Capitalism.”

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Jennifer Wright – Get Well Soon: History’s Worst Plagues and the Heroes Who Fought Them

Posted on September 24, 2019 | Comments Off on Jennifer Wright – Get Well Soon: History’s Worst Plagues and the Heroes Who Fought Them

Jennifer Wright – Get Well Soon: History’s Worst Plagues and the Heroes Who Fought Them

Wright has an irreverent, slightly offbeat sense of humor that is perfect for her topic, reminding me a bit of a more restrained Mary Roach. Wright takes a mostly chronological tour of disease, starting with the Antonine plague in ancient Rome, up through the bubonic plague, and on to the present day. In the 19th century, tuberculosis was oddly fashionable, in much the same way that the sunken, desiccated features associated with heroin chic are stylish today among fashion models. It was a glamorous disease, except that it very much wasn’t. Jonas Salk and his polio vaccine get a chapter, and Wright discusses the depth of the anti-Semitism he faced.

The chapter on encephalitis lethargica was poignant. The disease, which briefly flared up in the 1910s and 1920s, would essentially turn its victims into bed-bound, non-responsive zombies for years, and in some cases decades. The neurologist Oliver Sacks was able to revive some of his patients, who had no memories from after falling ill. One woman who fell ill during the 1920s flapper craze at age 21 woke up in 1960s an old woman, still exhibiting 1920s-era speech patterns and with no life experiences beyond early adulthood. Worse, Sacks’ treatments only worked for a few years. Patients would eventually revert to their former state, their revival a temporary one. Was it worth it? Different patients may have had different answers to that question.

Wright’s treatment of syphilis and other STDs, on the other hand, is often hilarious. The most recent major plague, HIV/AIDS, is less humorous, but is on track to have a happier ending, though not without millions of lives being destroyed first, and with social conservatives causing their usual intended harm.

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Posted in Books, History, Science, Uncategorized

Ex-Im Bank Reauthorization: Lesson in Institutional Design

Posted on September 23, 2019 | Comments Off on Ex-Im Bank Reauthorization: Lesson in Institutional Design

For all its flaws, the Export-Import Bank’s charter gets an important thing right: the agency must be reauthorized every few years, or it will close. This makes Ex-Im an important case study in institutional design. Its reauthorization requirement should be applied to nearly every government agency. Reauthorization offers regularly scheduled opportunities for Congress to enact possible reforms, or close an agency entirely. It also adds a level of democratic accountability to agencies that mostly lack it.

The executive branch has long since become too powerful. The other branches have too few meaningful checks on executive power. The result has been that agencies often face no consequences for abusing their authority, wasting resources, corruption, or ineffectiveness. If an agency has to face reauthorization every so often, it gives agencies more incentive to self-police against problems and reform them proactively, so emerging problems do not metastasize.

More to the point, the burden of proof properly lies on agencies for justifying their existence. If they are going to command resources rather than other agencies or taxpayers, they should have good reasons. If the federal government really needs an Economic Development Administration, a Hass Avocado Board, or a U.S. Board on Geographic Names, that agency should have no problem making its case every few years to Congress. If it has compelling arguments, the agency can continue on. If it does not, reauthorization provides regular opportunities to reform or end wasteful or harmful policies. This is an important part of governmental hygiene. Reauthorization allows Congress to enact reforms an agency cannot, or will not enact on its own.

Reauthorization also means that an agency’s window for reform never fully closes. Sometime soon, depending on how the current federal funding fight goes, the Export-Import Bank’s charter will almost certainly be renewed. Some needed reforms might even be part of the deal. Usually, a minor agency like Ex-Im will only garner congressional attention once every few decades, if at all. But charter reauthorization guarantees regular opportunities to enact reforms, or discipline the agency where needed. As happened temporarily in 2014-2015, Congress was able to close Ex-Im by simply declining to vote on reauthorization.

The only agencies that should fear a reauthorization requirement are the ones that do not deserve reauthorization. Policymakers and the public can identify them by their reaction to a potential requirement.

For more on reauthorization and other lessons from Ex-Im’s last five years, my new paper is here. For a short summary of the main findings, a press release is here.

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Posted in Economics, Export-Import Bank, Trade, Uncategorized

This Week in Ridiculous Regulations

Posted on September 23, 2019 | Comments Off on This Week in Ridiculous Regulations

The House passed a continuing resolution to avoid a federal shutdown until November 21st. The Senate will likely follow suit this week. The 2019 Federal Register will also almost certainly top 50,000 pages this week. Meanwhile, rulemaking agencies published new regulations ranging from gooseberry fruit to meat grades.

On to the data:

  • Last week, 46 new final regulations were published in the Federal Register, after 88 the previous week.
  • That’s the equivalent of a new regulation every three hours and 39 minutes.
  • Federal agencies have issued 2,122 final regulations in 2019. At that pace, there will be 2,899 new final regulations. Last year’s total was 3,367 regulations.
  • Last week, agencies published 418 notices, for a total of 15,777 in 2019. At that pace, there will be 21,554 new notices this year. Last year’s total was 21,656.
  • Last week, 1,084 new pages were added to the Federal Register, after 1,431 pages the previous week.
  • The 2019 Federal Register totals 49,633 pages. It is on pace for 67,804 pages. The 2018 total was 68,082 pages. The all-time record adjusted page count (which subtracts 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. Four such rules have been published this year. Six such rules were published in 2018.
  • The running cost tally for 2019’s economically significant regulations currently ranges from savings of $4.30 billion to $4.44 billion, mostly from estimated savings on federal spending. The 2018 total ranges from net costs of $220.1 million to $2.54 billion, depending on discount rates and other assumptions.
  • Agencies have published 47 final rules meeting the broader definition of “significant” so far this year. 2018’s total was 108 significant final rules.
  • So far in 2019, 360 new rules affect small businesses; 15 of them are classified as significant. 2018’s totals were 660 rules affecting small businesses, with 29 of them significant.

Highlights from last week’s new final regulations:

For more data, see “Ten Thousand Commandments” and follow @10KC and @RegoftheDay on Twitter.

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Posted in regulation, Uncategorized

Export-Import Bank Fight Not Over Yet

Posted on September 20, 2019 | Comments Off on Export-Import Bank Fight Not Over Yet

The Export-Import Bank’s charter is currently set to expire on September 30. If authorization lapses, the agency will shut down. On Thursday, the House passed a continuing resolution (CR) to fund the government through November 21—specifically including Ex-Im. The Senate will likely pass it next week. This means the Ex-Im fight could drag on for an additional seven weeks, and possibly longer. Here is a breakdown of the current situation.

The most likely reauthorization vehicle is a bill from Sens. Kevin Cramer (R-ND) and Kyrsten Sinema (D-AZ). It contains no positive changes and several bad ones. It would do away with board approval for large projects, increase Ex-Im’s portfolio cap to $175 billion, and would last for ten years, more than double the usual period. It would mainly benefit large companies like Boeing and Caterpillar that don’t need help, plus large state-owned enterprises such as China Air.

Because the bill is so tilted against reform, it would likely have difficulty making it through the standard legislative process without significant amendments. So while an up-or-down vote on the merits is possible, Ex-Im backers will avoid one if they can. The easiest way is to fold the bill into some other piece of must-pass legislation. That way, even Ex-Im opponents will still have to vote to renew Ex-Im on Cramer-Sinema’s terms, possibly without amendment.

The continuing resolution that passed the House yesterday is clean, in that its only Ex-Im language is extending it through November 21. It does not contain Cramer-Sinema or any of its provisions. This will likely remain the case when the Senate takes it up next week.

But—when November 21 approaches, Congress might well punt again and pass a second CR that goes until early next year. If Congress does not separately pass Cramer-Sinema by then, another Ex-Im extension is likely. Maybe it would be another clean extension until CR round 3 (and possibly beyond). Or someone could add in Cramer-Sinema to the bill text.

This complicates matters for reformers. The current 43-page CR was introduced on Wednesday night after working hours, and passed by the House the very next day. If congressional leadership pulls similar last-minute shenanigans with the next CR, Ex-Im reformers will need to have amendments ready in advance to the extent possible. Section numbers and such for amendments to refer to can only be accurately identified once the final text is available, so there would still be plenty of late-night work for reform-minded staffers.

This dynamic could repeat for any number of rounds until Congress can finally pass a budget—and even this budget could be a vehicle for Cramer-Sinema or another Ex-Im bill. Reformers’ job until then is to be both patient and persistent. There might be no rest for the wicked, but the same goes for those of us who oppose cronyism.

For positive reforms for Ex-Im, see my recent paper “How the Ex-Im Bank Enables Cronyism and Wastes Taxpayer Money.” For reasons to shut down Ex-Im entirely, see this paper from Ex-Im’s previous reauthorization fight.

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Posted in Economics, Export-Import Bank, Trade, Uncategorized

Jacob Burckhardt – The Civilization of the Renaissance in Italy

Posted on September 20, 2019 | Comments Off on Jacob Burckhardt – The Civilization of the Renaissance in Italy

Jacob Burckhardt – The Civilization of the Renaissance in Italy

Burckhardt, one of the 19th century’s greatest historians, coined the term “Renaissance.” He has an eye for larger themes, from the period’s rediscovery of Greek and Roman classics to the growing importance of international trade and cultural and intellectual exchange. He also gives plenty of attention to the Renaissance’s emphasis on the individual and free will, and its rejection of the notion of people being links in a greater Chain of Being, in which they are to play an assigned role in the social category into which they were born.

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Posted in Books, History