Call it buyer’s remorse. The Office of Advocacy of the Small Business Administration (SBA) is publicly—albeit meekly—tiptoeing away from a now-infamous report that it commissioned, in which economists Nicole Crain and Mark Crain purported to find that federal regulations cost the economy $1.75 trillion in 2008. After being roundly criticized by CPR, the Congressional Research Service, and others, SBA’s Office of Advocacy now explains, referring apparently to the $1.75 trillion figure that “the findings of the study have been taken out of context and certain theoretical estimates of costs have been presented publicly as verifiable facts.” While this admission is welcome, it does not go nearly far enough in light of the antiregulatory crusade this misleading, taxpayer-supported report fueled.
Soon after the Crain and Crain report was released in 2010, CPR published a White Paper that demonstrated the unreliability and implausibility of the Crain and Crain report’s methodologies and findings. A few months later, the nonpartisan Congressional Research Service (CRS) released its own analysis of the Crain and Crain report, and its findings were equally damning. Then the Economic Policy Institute (EPI) separately analyzed the Crain and Crain report, and concluded the Crain and Crain report was based on a “flawed economic model and faulty data.” All of this caused then Administrator of the Office of Information and Regulatory Affairs (OIRA) to describe the study as “deeply flawed” and an “urban legend” in congressional testimony. And in addition to employing indefensible methodologies to support their calculations for costs, the Crain and Crain report’s authors ignored regulatory benefits, a move that ensured that the report’s findings would be ripe for precisely the kind of abuse and misuse by anti-regulatory forces that SBA’s Office of Advocacy is now trying to walk away from.
Sure enough, the fantastical $1.75 trillion dollar estimate has been cited time and time again by industry lobbyists and regulatory criticsin Congress, even after the report itself had been debunked, to support troubling anti-regulatory legislation, such as the REINS Act. After handing this Christmas gift to the anti-regulatory forces, SBA’s Office of Advocacy owes the public something more than burying a begrudging acknowledgment of the report’s weakness on an obscure webpage.
When I wrote Dr. Winslow Sargeant, the head of the SBA Office of Advocacy, asking that his agency completely disavow the Crain and Crain report, he offered a disappointing response that attempted to rehabilitate the Crain and Crain report’s findings and methodology. So, it is encouraging that the SBA Office is now being a little more forthright in its criticisms of the report. Yet, the Crain and Crain report has so polluted the public debate over regulatory policy that this half step by SBA’s Office of Advocacy is plainly inadequate. It is time for the agency to disavow the report completely, remove any vestige of it from its website, and adopt procedures to ensure that it does not pay for and publicize similarly misleading research again. As a fiduciary of the public’s money, it owes nothing less.
Showing 2,829 results
Sidney A. Shapiro | October 1, 2013
Call it buyer’s remorse. The Office of Advocacy of the Small Business Administration (SBA) is publicly—albeit meekly—tiptoeing away from a now-infamous report that it commissioned, in which economists Nicole Crain and Mark Crain purported to find that federal regulations cost the economy $1.75 trillion in 2008. After being roundly criticized by CPR, the Congressional Research Service, and […]
William Funk | September 30, 2013
Executive Order 12866 may be twenty years old, but formal, centralized review of agency rulemaking by the Office of Information and Regulatory Affairs (OIRA) is more than thirty years old, having been instituted by President Ronald Reagan in Executive Order 12291 in 1981. Since then, this centralized review has been carried out without significant change over […]
Lisa Heinzerling | September 30, 2013
This coming Friday marks the 20th anniversary of a little-known but remarkably important document: Executive Order 12866, issued by President Bill Clinton in 1993. Executive Order 12866 replaced an order issued by President Ronald Reagan in 1981. Both of these documents set out a process whereby the White House – acting through the Office of Information and […]
Erin Kesler | September 25, 2013
Today, the Hill published an op-ed by CPR Vice President Sid Shapiro entitled, “In Defense of Regulation.” According to the piece: The responsible scholarly literature — as opposed to calculations cooked by business-friendly think tanks — has refuted the opponents’ claims of regulatory costs far in excess of the benefits of regulation. The same literature reminds […]
Matt Shudtz | September 24, 2013
As we noted on the day of the announcement, OSHA has – at long last – released a proposal to better protect workers from respirable silica. We didn’t have much to say about the substance at the time because we simply hadn’t had the opportunity to read through the massive proposal. (It’s over 750 pages, with almost […]
Dave Owen | September 24, 2013
Last week, E&E News reported a breakdown in talks over EPA’s long- delayed stormwater rule. In 2009, in a settlement with the Chesapeake Bay Foundation, EPA promised a new rule by November, 2012. That deadline has long since passed, and apparently EPA and environmental groups are at an impasse in their negotiations over a new timeline. The […]
Alice Kaswan | September 23, 2013
On September 20, 2013 the EPA proposed new source performance standards for greenhouse gas emissions for new power plants. Although the agency repackaged and fine-tuned an earlier proposal, issued in April 2012, it continues to hold the coal industry’s feet to the fire. The proposal makes clear that new coal-fired power capacity cannot be built […]
David Driesen | September 20, 2013
Almost every new power plant that the electric utility industry has built in recent years has been a natural gas powered plant. Industry rarely builds new coal-fired power plants anymore because gas has become much cheaper than coal. That is a very good thing. Absent rather expensive carbon capture and storage, new coal-fired power plants […]
Alexandra Klass | September 20, 2013
This entire week, the coal industry and electric utilities have been decrying the EPA’s proposed rule, released today, limiting CO2 emissions from new coal-fired power plants. Experts predict the proposed rule will place limits on coal-fired power plants that will make them impossible to operate in the absence of carbon capture and sequestration (CCS) technology, […]