Attacking Regulation Using Slogans, Not Analysis

The Trump administration’s fundamental hostility to government is by now plainly apparent. The President issued an executive order requiring agencies to get rid of two regulations for each new one that is adopted. He appointed administrators who have been extraordinarily hostile to the missions of the departments and agencies that they now head, such as Scott Pruitt at EPA and Betsy DeVos at the Department of Education. And he has proposed deep budget cuts for regulatory agencies. Instead of the touted “reforms,” the administration is committed to a regulatory agenda that affirmatively and aggressively seeks to frustrate the normal operations of government as part of a “deconstruction of the administrative state.”

Throughout U.S. history, government regulation has generated a wide variety of public benefits including safer workplaces and food, cleaner air and water, traffic safety, and greater protection for civil and political rights. These regulations have saved lives and have protected individual liberty and dignity. As regulatory supporters, we acknowledge that efforts to protect people and the environment can sometimes have unintended consequences, but we do not base our analysis on political slogans, such as “job-killing” regulation arguments that lack empirical support. Instead, we turn to widely accepted frameworks to separate the regulatory wheat from the regulatory chaff. These frameworks provide a blueprint for what we should be doing and indicate why the President’s war on regulation is ill-advised.

Justice Stephen Breyer’s book, Regulation and Its Reform, builds on an earlier analysis of the regulatory state by Alfred Kahn. Both authors argue that government is useful when it addresses market imperfections that make the market less efficient than it could be. But we must take care, Breyer warns, that the regulation matches market failure, that is, that policymakers apply the appropriate tool in the appropriate way to a given problem. Whereas regulatory critics, including the Trump administration, are prepared to take a meat ax to government, Breyer’s work calls for the careful marshaling of economic evidence and analysis, something that is entirely unacknowledged by the slogan-generating opponents of government.

We would add that Breyer’s mismatch analysis does not reach far enough. The problem with mismatch analysis is that it ignores the multiplicity of ways in which regulations can be rendered ineffective, particularly by regulatory capture. Putting the point more directly, while government critics have been delighted to critique government, they have been noticeably reluctant to acknowledge their own role in contributing to, and in may instances creating, the very government failures that they heartily bemoan.

A wide variety of studies confirm that social benefits consistently outweigh regulatory costs and that the regulatory state is responsive to the needs and wishes of the American people. Citizen shock at the Administration’s health care law is a case in point. Americans want affordable health care and insurance coverage. The Administration’s plan reduces coverage and raises costs, while redirecting money form the poor to the rich, an outcome that has not been ignored by the public. It is not too alarmist, rather it may not be alarmist enough, to acknowledge that these strategies intended to blow up government are anti-government to their core. And because they are anti-government, they are anti-democratic. Government regulation happens when government exists to protect the public through duly enacted legislation.

Instead of the wholesale destruction of government through an unprincipled attack on regulations, the Trump administration should be tested by asking basic and fair questions for any given regulation: Is it working? Are markets more efficient? Are we safer? Is our environment cleaner? Or more people covered by health insurance? Is it more affordable? Similarly, is education more accessible to all and does it deliver on its promises? Or, more simply and more profoundly: Is our society better?

So far, the Trump Administration has shown no willingness even to bother asking.