Cross-posted from the Economic Policy Institute's Working Economics blog. Isaac Shapiro is EPI's Director of Regulatory Policy Research.
The House of Representatives is poised to vote for the REINS (Regulations From the Executive in Need of Scrutiny) bill today; this would come on top of votes on two bills last week that would also upend the regulatory process. These efforts are premised on assertions that regulations are greatly damaging the economy, and David Brooks’ op-ed Tuesday is another timely reminder that these assertions are inaccurate. He opens with:
“Republicans have many strong arguments to make against the Obama administration, but one major criticism doesn’t square with the evidence. This is the charge that President Obama is running a virulently antibusiness administration that spews out a steady flow of job- and economy-crushing regulations.”
And closes with:
“They regulations are not tanking the economy.”
In between, he cites a few relevant facts to support his view that “regulations are not a big factor in our short-term economic problems.” These include the Bureau of Labor Statistics data which show that during the first half of 2011, just 0.18 percent of mass layoffs were due to regulations. EPI President Lawrence Mishel comprehensively addresses the role of regulation and regulatory uncertainty in the economy in Regulatory uncertainty: A phony explanation for our jobs problems; he arrays a range of economic and survey indicators that demonstrate that it is a lack of demand, and not regulations or regulatory uncertainty, that is behind the painful state of the labor market.
I don’t agree with some of the information and characterizations in Brooks’ article; let me focus on the most glaring omission: he includes no discussion of the benefits of regulation. These can be large, not only in terms of health or safety benefits, but often in terms of economic benefits. Appropriate financial regulations are essential to an economy’s foundation.
Also, I’ve previously shown that two joint EPA/Department of Transportation rules which regulate greenhouse gas emissions from, and establish fuel standards for, various-size vehicles have particularly sizable economic benefits. They produce large savings to drivers in the form of reduced expenditures on gasoline. In 2010 dollars, a conservative estimate of the economic benefits from these two rules amounts from $6 billion to $20.6 billion a year. This range is above the range of estimated compliance costs for all 11 major rules finalized so far by the Obama EPA; that range is $5.9 billion to $12 billion a year.
When health benefits are also considered, the combined benefits of all EPA rules finalized so far under the Obama administration exceed their costs by tens of billions of dollars each year. In 2014, the Cross-State Air Pollution rule alone will save an estimated 13,000-34,000 lives and lead to 820,000 fewer cases of respiratory symptoms.
Brooks is right in concluding that concerns that regulations are behind the economy’s troubles are misplaced, and that’s a step towards a more reasoned and balanced discussion. Let’s hope that next time he goes a step further and discusses the benefits from regulations as well.
(Here is a summary of EPI’s research on the costs and benefits of regulation and a summary of our research on the relationship between employment and regulation.)
Showing 2,822 results
Isaac Shapiro | December 7, 2011
Cross-posted from the Economic Policy Institute’s Working Economics blog. Isaac Shapiro is EPI’s Director of Regulatory Policy Research. The House of Representatives is poised to vote for the REINS (Regulations From the Executive in Need of Scrutiny) bill today; this would come on top of votes on two bills last week that would also upend […]
Rena Steinzor | December 6, 2011
Booth Goodwin, the U.S. Attorney for the southern district of West Virginia, and Attorney General Eric Holder announced today a landmark settlement with Alpha Natural Resources, the coal company that bought out its rival Massey Energy after a catastrophic explosion deep within the Big Branch mine killed 29 miners. Alpha recently announced that its third […]
Rena Steinzor | December 6, 2011
New York Times columnist David Brooks weighs in this morning on CPR’s latest report, Behind Closed Doors at the White House: How Politics Trumps Protection of Health, Worker Safety and the Environment. To his credit, he begins by dismissing one of congressional Republicans’ principal lines of argument for 2011 – that an imagined tsunami of […]
Ben Somberg | December 2, 2011
The CPR white paper on OIRA earlier this week looked at how this little office within OMB facilitates an industry-dominated process that serves to weaken regulations proposed by federal agencies. Appearances by industry representatives have outnumbered those by public interest lobbyists more than 5-to-1 in meetings at OIRA in the last ten years, the paper […]
Ben Somberg | December 1, 2011
The “Regulatory Flexibility Improvements Act” (RFIA) and the “Regulatory Accountability Act” (RAA) are headed for votes on the House floor shortly (today and/or tomorrow). The “Gum Up Public Health and Safety Protections Act” apparently wasn’t going to sell as well. A quick recap of the Regulatory Accountability Act, via CPR Member Scholar Sidney Shapiro’s Congressional testimony […]
Matt Shudtz | December 1, 2011
This week OSHA expanded a two-year-old enforcement program aimed at preventing catastrophic release of highly hazardous chemicals—the type of headline-grabbing event that ruined thousands of lives in Bhopal in 1984 and was narrowly avoided in West Virginia in 2008. Originally targeted at just three regions (and optional for state-plan states in those regions), the National […]
Robert Adler | November 30, 2011
When the U.S. Supreme Court hears oral argument in PPL Montana, L.L.C v. State of Montana on December 7, it will consider issues of constitutional history dating to the early days of the American Republic and legal sources that some claim (and others dispute) trace to Magna Charta and the Institutes of Justinian in Roman law. […]
Sidney A. Shapiro | November 29, 2011
Republicans in the House have spent much of the fall trying to blame regulation for the nation’s slow economic recovery. The fact that there is no reasonable evidence to back up this claim is apparently not a concern for the regulatory opponents. Moreover, regulatory opponents skip entirely over the impacts of the failure to regulate, […]
Rena Steinzor | November 28, 2011
When former Harvard Law Professor and eclectic intellectual Cass Sunstein was named administrator of the Office of Information and Regulatory Affairs (OIRA), conservative, industry-oriented Wall Street Journal editorial writers enthused that his appointment was a “promising sign.” A slew of subsequent events has proved their optimism well placed, as we have noted repeatedly in CPRBlog. […]