On regulations

June 29, 2011

Arnold Kling links to an article on regulation by Bruce Yandle.

Yandle’s general concern is well-founded – it is a problem that the unaccountable regulatory agencies are turning out massive quantities of regulations.

Yandle has no idea how to solve this problem.

Solutions from the few people that are trying to address the problem of unaccountable regulatory agencies fall into two categories.

1) Kling suggests "radical Federalism or competitive government." The good news is that this proposal would actually solve the problem. The bad news is that it’s impossible. The problem that we’re trying to solve is that unaccountable regulatory agencies have taken control of the government of the US. Achieving Kling’s proposal would require these disparate agencies to band together to radically reduce or destroy their own power and existence. Nothing could be more unlikely (they’ll never band together, for one).

2) Yandle’s solution, which is basically for Congress to reassert its own power over these executive agencies, suffers from the inverse of the problem with Kling’s solution. It is theoretically possible for Congress to reassert control over the legislative function, however the result would not be better government. You may not like unaccountable regulators making decisions, but you really wouldn’t like Congress making decisions.

Part of the problem is that people don’t understand regulators. If you talk to a reasonably successful one, you’ll be surprised about how much they know about the industry they regulate (it’s not clear to me that the average regulator is less knowledgeable about the industry he regulates than the average private sector worker in that industry). You’ll also be surprised about how aware he is about the problems of over-regulation. Regulators don’t sit in rooms randomly thinking of ways to undermine competitiveness in the US economy. Yandle seems to oscillate between assuming that regulators are promulgating random regulations on subjects which they don’t really understand to assuming that they’re all-knowing.

For example, his suggestions to fix the problem of too much regulation include:

  • Agencies should be required to conduct potential cartel analysis for every major industry rule. They should also identify industry winners and losers under proposed rules, account for the gains and losses that may result in a rule-induced regulatory cartel, and estimate deadweight losses imposed on consumers.
  • The Antitrust Division of the Department of Justice and the Federal Trade Commission should be required to review major rules in cooperation with the White House’s Office of Information and Regulatory Affairs, and should intervene as appropriate in regulatory proceedings that may have inefficient outcomes.
  • In conjunction with the required retrospective assessments and industry reviews, Congress should hold annual hearings to review those reports, with an eye toward improving the competitiveness of the U.S. economy and identifying the economic gains obtained through regulatory review by OIRA

I think these reforms would end up giving regulators more power. They assume that regulators are omniscient. Why give them an opportunity to increase their power by performing these rampantly-speculative analyses? What do Justice and the FTC know about inefficiencies in regulations in FAA regs, for example? What does Congress know?

If you want to solve the problem, you’ve got to figure out how to get someone to be held responsible (Justice and FTC and Congress don’t count). It has to be a person and this person has to get in trouble if regulations fail. Real serious trouble.


Randoms of the day

June 29, 2011

Handle on gays and gentrification.

Auster on the incorporation doctrine.

Here’s a map of the racial breakdown of DC (blue is for black people and red is for white people). Here’s a map of changes in housing values in DC. Notice anything?


Randoms

June 28, 2011

"A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse over loose fiscal policy, (which is) always followed by a dictatorship." Do read the rest.

Ferdinand: "Defending the integrity of marriage in America at this point is like defending the chastity of a crack whore."

The 4th amendment is dead. The interesting aspect of the story is that people (not government) were happy to kill it.

Stratfor on Europe

This is such a good argument for buying Greek bonds.

Progress: "The antique Thunderbird parked outside on my street right now will run, approximately, forever. Unlike my Honda Civic Hybrid, which will be in the scrapheap before my baby daughter hits college. Why? Because the gadgetization of cars is ruining them."


Randoms

June 27, 2011

A reactionary analysis of the war on drugs.

This post is apparently serious.

How to view the past.

Vox: "If Barack Obama were to come out of the closet and marry Reggie Love tomorrow, this would permit the United States to finally catch up with that epitome of modern social progress, the Roman Empire of Nero and Elagabalus." That’s funny, but frankly, I’m fine with gay people getting married. Gay people have done more to re-civilize DC than any other group.

Dalrock: "The irony here is that the safety valve which feminists and others fought so hard for to avoid women being trapped in unhappy marriages has made women both less happily married and more likely to be unhappily divorced." This goes nicely with the essays that Mangan recommends here, which are worth the time.

Yglesias chides Herman Cain for wanting to turn regulatory over to the regulated. I work with one or two federal agencies that are more lenient with industry than industry would be with itself.

Sailer: "Jose Antonio Vargas, the self-proclaimed poster boy for illegal immigration, isn’t even Hispanic. He’s Asian. He’s from the Philippines. After decades of trying, the MSM couldn’t up with a real Mexican!"


Harry Brown

June 27, 2011

Ilkka recommended Harry Brown the other day.

I watched the move on Saturday, while my wife went to a birthday party for one of her law school friends. I’m pretty sure this particular friend has been turning 32 for the last five years.

Anyway, Ilkka’s one line description of the movie is going to really tough to top: "a pretty solid movie adaptation of Theodore Dalrymple’s essays."

I’ll give it a shot though: This is basically the movie that I would write if someone gave me three hours in which to write a movie and I’d already had a few martinis.

Imagine if the slums of Britain were filled with white people and one old guy went on a vigilante rampage against the slum-dwellers. You get Harry Brown.


Checks and balances are dead

June 27, 2011

The theory that the US government is limited by checks and balances depends on each branch of government wanting power. Unfortunately, this is not the case anymore:

And this, it seems to me, is the real story of presidential power over warmaking. It’s not so much that we have executive branch power grabs as it is that congress pretty consistently fails to use the leverage that it actually has.

I think this is probably a failure of democracy. If Congressmen do nothing to start and stop wars, they don’t have to be responsible for the outcomes. If something bad happens in the war, they can blame the other guy. If something good happens they can take part of the credit. Democracy disincentives responsibility and therefore good government.


Lavasa

June 24, 2011

There are lots of interesting cities in India:

Lavasa is the brainchild of Ajit Gulabchand, the jovial, silver-haired chairman of Hindustan Construction Company, an Indian conglomerate known for mega-projects like bridges and dams. He acquired land along the remote hills that slope down to Warasgaon Lake, a 12-mile-long reservoir that supplies water to Pune, from a group of investors hoping to make a little money selling vacation homes—a vision that proved decidedly too small for a man who occasionally commutes by helicopter.

Lavasa will be the first city in India—apart from a few company towns surrounding factories—to be built and governed entirely by a private corporation. It’s also the first city in India to be planned according to the principles of New Urbanism, which advocates walkable cities that commingle business and residential development, offer mixed-income housing, and preserve green space. Lavasa will provide centrally pressurized running water, reliable electricity, sewage treatment, garbage collection, and even fiber-optic connections in every home. These things are so alien in India that when prospective home buyers first saw Lavasa, Gulabchand says, many asked why they couldn’t see water tanks on the roofs, and whether the price of units included a septic tank.

Perhaps the most radical thing about Lavasa is its government—or rather, the fact that it has a government. Most Indian cities are run largely by states, some of which are bigger than many countries. As a result, urban development typically falls to overstretched bureaucrats or state politicians chiefly interested in courting rural voters. The Lavasa Corporation—the company formed to build and run the city of Lavasa—hired Scot Wrighton, an experienced American city administrator, as India’s first city manager. Wrighton says Lavasa offered him “a chance to build a new governance model for a country where governance at the municipal level does not work.” Under Maharashtra state law, the Lavasa Corporation can assume many of the functions normally reserved for the state, though it does not have police powers and cannot levy taxes. It employs private security guards and raises funds from home sales, rentals, and revenue-sharing agreements with businesses. Though the company hopes to eventually transition to a “public-private partnership model,” it’s an open question whether this government would be accountable to Lavasa’s citizens, and not just to investors.

Let’s hope for the latter.