Posts tagged with: regulations

h-armstrong-roberts-1930s-magician-hands-pulling-rabbit-out-of-top-hatPulling a rabbit out of a hat is a classic magic trick. But if a magician wants to do it nowadays he also needs to be able to pull out a license for the hare and a USDA-approved “rabbit disaster plan” that details how the bunny will hop to safety in case of a natural disaster, like a hurricane, flood, or sharknado. Or even if the air conditioning goes out.

This Kafkaesque regulatory requirement started over forty years ago — with a dog named Pepper.

In 1965, Pepper disappeared from the yard of her home. Shortly after the disappearance, the owner recognized his missing dog in a picture taken of an animal dealer’s overcrowded truck featured in a local newspaper. The owner’s wife, children, and even his congressman tried to locate and retrieve the dog but were denied entrance to the “dog farm.” Unfortunately, the family never got the dog back: Pepper had been euthanized in an experimental procedure at a New York hospital. The incident led the congressman to introduce H.R. 9743, a bill that would require dog and cat dealers, and the laboratories that purchased the animals, be licensed and inspected by the USDA.

According to the USDA, the 1966 law, which was primarily concerned with dogs and cats, was restrictive in regards to its coverage of the types of animals and regulated facilities. Research facilities only had to register if they received government funding and the dogs or cats had to have crossed state lines. But as David A. Fahrenthold notes, “the letter of the law was broad. In theory, it could apply to someone who “exhibited” any animals as part of a show.” And indeed it does:

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Red-TapeA new study estimates the cost of regulation in the U.S. at $14,768 per household:

For two decades, Wayne Crews of the Competitive Enterprise Institute has tracked the growth of new federal regulations. In his 20th anniversary edition this week, he’ll report that pages in the Code of Federal Regulations hit an all-time high of 174,545 in 2012, an increase of more than 21% during the last decade.

Relying largely on government data, Mr. Crews estimates that in 2012 the cost of federal rules exceeded $1.8 trillion, roughly equal to the GDP of Canada. These costs are embedded in nearly everything Americans buy. Mr. Crews calculates these costs at $14,768 per household, meaning that red tape is now the second largest item in the typical family budget after housing.

There are numerous government regulations that are beneficial to human flourishing and are worth the cost we pay. But many—perhaps nowadays even the majority—of federal regulations are a drain on our economy and an unjustifiable restriction of freedom.

While it would difficult to determine the value of worthy regulations, let’s say that we could reduce it in half. Households wouldn’t get the money directly, of course, but since the cost of regulations is embedded in almost everything we purchase, living expenses would be reduced dramatically. Imagine the effect of an economic surplus equal to $7,000 per household. Although $900 billion may not seem like much in an economy of $15.7 trillion, it’s more than we spend each year on Medicare/Medicaid ($802 billion), Social Security ($768 billion), or Defense ($670 billion).

Because we live in such a heavily regulated country we tend to forgot that regulations come with a price. Some regulations are worth the cost, while others are not. Determining the good from the bad is therefore not just a duty of good governance but a moral obligation. We aren’t merely wasting money on bad regulations, we are wasting resources that could be used to improve the lives of all citizens. And that’s too high a price to pay for waste.

After relating how city regulations in Chattanooga, Tenn., helped kill a small business, economist Mark J. Perry offers a sympathetic sentiment for failed entrepreneurs:

To paraphrase President Obama:

Look, if you’ve been unsuccessful, you didn’t get there on your own. If you were unsuccessful at opening or operating a small business, some government official along the line probably contributed to your failure. There was an overzealous civil servant somewhere who might have stood in your way with unreasonable regulations that are part of our American system of anti-business red tape that allowed you to not thrive. Taxpayers invested in roads and bridges, but you might have faced city council members who wouldn’t allow you to use them. If you’ve been forced to close a business – it’s often the case that you didn’t do that on your own. Somebody else made that business closing happen or prevented it from opening in the first place. You can thank the bureaucratic tyrants of the nanny state.

(Via: Cafe Hayek)

Blog author: jballor
posted by on Wednesday, January 13, 2010

In this week’s Acton Commentary, “From the Lead Frying Pan into the Toxic Fire,” I examine some of the fallout from the lead paint fiasco of 2007. Last month RC2 Corp. settled the civil penalty for violating a federal lead paint ban.

But in the wake of subsequent federal action, I examine two unintended consequences. First, new federal regulations are posing an unsustainable burden on some small businesses, forcing them to make very hard choices about whether to keep their operations domestically. Second, faced with concerns about lead, some manufacturers have turned to potentially more dangerous materials, such as cadmium.

The U.S. Consumer Product Safety Commission (CPSC) has been charged with a huge task in all this. My main hope is that there is time taken for more serious and sustained reflection about the consequences, both intended and unintended, from these kinds of regulatory moves. We need reflective action more than we need quick action. The market will take care of the latter on its own.

All of which brings to mind the holiday season, and this classic skit from SNL: