Acton Institute Powerblog

Deregulation: When to wash a pig

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You could be prosecuted on the federal level if you “make any incision” on hog carcasses before all “hair, scurf and dirt, including all hoofs and claws, (is) removed from hog carcasses and the carcasses thoroughly washed and cleaned.” In January, President Donald Trump issued Executive Order 13771, pledging to reduce regulation, which initiated the recall of the Hog Carcass Cleaning Rule. It turns out that there were two rules on the books, the first states to wash the hog carcasses before the first incision; the second states to wash them after the first incision. On May 16th, the Department of Agriculture revisited their policy and removed the regulation.

The Hog Carcass Cleaning Rule is evidence of the myopic nature of the current regulatory climate. Reading the regulations is designed to make you drowsy, typed in Courier New on poorly built websites. In the Federal Register, the Department of Agriculture took 3000 words to say that they realized they had two conflicting rules on pig washing and were pitching one of them. Regulations are rules, often made by unelected bureaucrats, that restrict how businesses operate. The original goal of regulation was health and safety, but as the United States moved towards more and more specific rules, it found itself encoding into law precisely when to wash a pig.

The Brookings Institute, a center-left policy research group, has built a tracker for the regulations which the Trump administration has repealed or suspended. Brookings found that under Trump, the rate of rulemaking by federal agencies has decreased. Yet this decreases only the rate of regulations being written, not the overall amount of regulation. Trump has not been able to completely halt the regulatory crawl. Why is regulation so sticky?

Deregulation is, by definition, a boring task. It requires peeling back years of unnecessary rules that do little but hold back business. Furthermore, regulatory agencies are slow moving mammoths. For instance, the Department of Agriculture, author of the famed Hog Carcass Cleaning Rule, has a waiting period of 60 days before they will repeal any regulation. Effectively, this means that no president can remove any regulation in the last 60 days of his administration. The process of eliminating unnecessary rules is halted by even more unnecessary rules.

At the same time, regulation is no laughing matter. Regulations increase the complexity in the market, making it harder for businesses, especially small and new businesses, to jump the hurdles created by rules. This process of slowing business creation impinges on economic growth. The Mercatus Institute released a report which said that the economic impact of the regulations added since 1980 alone is a whopping $4 trillion, nearly a quarter of the entire U.S. economy!

The core issue at stake is that regulation addresses problems that aren’t there. In Regarding the Problem of Newborn Piglets in Winter, Chinese satirist Chen Rong parodies the Communist Government. In her short story, leading party officials worry about the fate of farmers in the winter and order farmers to keep their pigs indoors during the cold months. The narrator follows the directive as it passes through the bureaucracy: from national, to state, to parochial party officials. The twist of the story is that, while the officials were planning, the farmer had been already safe inside with her pigs. She needs no directive from the government because she cares about her property! The motives of profit and self-interest will ensure that farmers do not squander their resources.

This brings us back to the Hog Carcass Cleaning Rule. Of course the farmer will clean the pig before he butchers it! He wouldn’t want it to be wasted after all his work. Myopic regulations are nothing more than the government saying, “We know how to run your business better than you do.” The United States has opted for a government in which every detail of a business is preordained.

During the tedious task of deregulation, policy makers must remember the real impact of these rules on business. Trump’s new Supreme Court pick, Brett Kavanaugh, has been an avid opponent of the regulatory reach of government. His possible appointment may push agencies towards a more balanced approach to regulation. The Trump administration has chosen a worthy goal in eliminating some of the barriers to entry for business; let’s hope they don’t succumb in this often boring task.

 

Photo Source: Carol M. Highsmith – Library of Congress Catalog (Public Domain)

Noah Gould is currently a part of The Acton Institute's Emerging Leaders Program. He is studying Economics at Grove City College in Pennsylvania. This fall, he will be researching Political Economy under Kai Gehring at the University of Zurich.

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