Tag: Regulatory Reform

What Now?

So now that the Republicans have taken back both houses of Congress, what should they do for the next two years? Nothing, argues National Review:

The desire to prove Republicans can govern also makes them hostage to their opponents in the Democratic party and the media. It empowers Senator Harry Reid, whose dethroning was in large measure the point of the election. If Republicans proclaim that they have to govern now that they run Congress, they maximize the incentive for the Democrats to filibuster everything they can — and for President Obama to veto the remainder. Then the Democrats will explain that the Republicans are too extreme to get anything done.

They’ll say that anyway. If the Republicans proposed poached eggs for breakfast, the Democrats would denounce them as dangerous extremists. And I don’t think NRO actually believes this argument because they later say Republicans should force the Democrats to filibuster/veto popular legislation.

Even if Republicans passed this foolish test, it would do little for them. If voters come to believe that a Republican Congress and a Democratic president are doing a fine job of governing together, why wouldn’t they vote to continue the arrangement in 2016?

Which brings us to the alternative course: building the case for Republican governance after 2016. That means being a responsible party, to be sure, just as the conventional wisdom has it. But part of that responsibility involves explaining what Republicans stand for — what, that is, they would do if they had the White House.

So the Republicans shouldn’t govern. Instead, they should gear up for 2016 to take the White House and Congress at which point they will … what? … concentrate on keeping power?

I’m sorry, but I really don’t care about the Republican Party one way or the other. Whether governing hurts or helps their prospects in 2016 is irrelevant to me and should be irrelevant to people who are not actual party operatives. We had a unified Republican government for six years and the result was the most massive expansion of government power since the New Deal.

No. What we want from the Republicans is progress. What we want is for them to turn back the tide of government expansion. What we want is for them to … what’s that word … govern? The Republicans are on probation right now. It’s up for them to prove themselves worthy of getting power back.

There is precedent for governing and winning elections at the same time: Republicans worked with President Clinton and kept Congress and won the White House twice as a result. But they didn’t win because they grandstanded. The won because the accomplished things — welfare reform, spending restraint, NAFTA — that made them worthy of winning all three branches of government.

Nick Gillespie:

Yet Republicans mistake the meaning of the midterms at their own peril. These elections were a particularly frank repudiation of Barack Obama and the past six years of failed stimulus, disastrous foreign policy, and rotten economic news. Even the president’s historic health-care reform remains a negative with voters. But if the GOP thinks it has a mandate to return to the equally unpopular bailout economics and social conservatism of the George W. Bush years, it too will be sent packing as early as the next election.

You should read Nick’s entire piece, which breaks down the polling to show a decisive shift against big-government, in every respect.

It’s not enough for the Republicans to not be Obama. “Not Obama” isn’t going to be a candidate in 2016. In fact, Obama won’t be a candidate in 2016 (savor that relief for a moment). If the Republicans want to earn our votes in 2016, they need to accomplish things. They need to prove themselves worthy. They need to show that they can get government out our hair, despite the man in the White House.

How does this break down into nuts and bolts? On the day after the election, John Boehner and Mitch McConnell laid out an agenda for the next two years. It includes approving the Keystone XL pipeline, tax reform and fast track trade authority. It also includes three changes to Obamacare: raising to 40 the hours needed to qualify as a full-time employee for the employer mandate, exempting veterans from counting toward the 50-employee mark that triggers the coverage mandate and repealing the medical device tax.

These are all OK ideas and some of them — like fast track trade authority — are supported by the President. But it’s kind of small potatoes. It’ll make a nice first month, but it’s not exactly the Contract with America. I would prefer something a bit bolder.

This would involved finding things that the Democrats or the President will support. There’s a strain of thought among conservatives, exemplified by the NRO piece above, that working with Democrats will give “legitimacy” to Obama. Nuts to that. The country needs things done. And if we can the President on board, great.

But the Republicans should also pass legislation they know will be filibustered or vetoed. This could give the Democrats something to talk about in 2016 (“look at the extreme legislation we blocked!”). But I think it more likely, if Republicans are smart … OK, if they’re not too dumb … OK, if they’re not completely stupid … that it would give the Republicans something to run on in 2016. It would give the American people something to vote for, not just something to vote against. When the Republicans have run on a positive agenda — Reagan in 1980, Newt in 1994 — they have done well.

As for specific issues: the first on that list would be entitlement reform. The President has indicated that he is open to it. It’s time to call his bluff. The deficit has been shrinking in recent years but will soon begin to blow up as the bill for Baby Boomer retirees comes do. The time to act is now, before we are back in the land of trillion dollar deficits.

A lot of Republicans worry that overhauling Medicare and Social Security will open them up to attack from the Democrats. But here’s the thing: that’s going to happen anyway. The number of elections that have not included a Democrat “mediscare” campaign over the last forty years is precisely zero. The Democrats are going to demonize Republicans anyway. At the very least we could get something out of it. And if it costs the Republicans some seats, so be it. It would be worth it to slice trillions off our debt.

The counter-argument is they should wait until the Republicans have the White House as well. That way, they won’t have to compromise with Democrats and accept a tax hike or defense spending cuts in return for entitlement reform. I find that hope ridiculously optimistic. It assumes that Republicans will take the White House and keep the Senate. And it assumes that they will take the political risk of entitlement reform once they have full power, which I find unlikely.

Act now. At the very least, call the President’s bluff. Then you’ll have something to run on in 2016.

The second priority should be regulatory reform, which is sucking a couple of trillion dollars out of the economy. Probably the most important regulatory reform is the repeal of Sarbanes-Oxley, which is strangling our economy, halting IPOs and a nightmare for businesses. It’s the poisonous spider at the center of the web of economic malaise. President Obama will probably oppose this. Good! Make him stand with the bureaucrats and trial lawyers! Over 60% of the American people think regulation is too onerous, including many independents. This is a winning issue for Republicans.

Third would be an overhaul of the patent and copyright laws which are strangling innovation. The Republicans are open to this and the President is too, despite fierce opposition from trial lawyers. Reform could be passed in the first few months of 2015.

Fourth, an overhaul of our drug policy, specifically a recognition of state laws on medical and recreational marijuana. The President has occasionally made noises on this and a majority of Americans now favor pot legalization. The Republicans can get ahead of the Democrats on this by embracing a federalist approach: states that keep pot illegal will still have the aide of the DEA in keeping it illegal; states that make it legal will be left alone. I have little hope the Republicans will do this, but it would be a great step for them.

Fifth, an overhaul of Obama’s anti-terror powers. Justin Amash and Rand Paul give me hope that the GOP may be open to this. The best thing about reigning in Obama’s police state would be exposing the lie that the Democrats are the party of civil liberties and personal freedom.

That’s just for starters. There are other things: more spending cuts, reigning in Obama’s foreign policy and executive power excesses, a symbolic repeal of Obamacare (symbolic because it will be vetoed). But I see the above as doable and I see it as proving the GOP’s supposed small-government bona fides. If they’re serious, they will do something along these lines.

I have no doubt that the Republicans will run into opposition from the President. In fact, his petulant press conference seemed to promise that he would do what he wants on issues like immigration and only invite cooperation on his agenda. We’ll see what happens behind closed doors. This President has, on occasion, compromised with Republicans. But he has also been willing to take a my-way-or-the-highway approach, particularly when he had Congress for the first two years (Republicans were invited only to tweak details of Democratic legislation; kind of like being asked which arm you want the shark to bite off).

But if the President is determined to pursue his agenda and won’t cooperate, then pass the legislation anyway. Force him to veto it. Force him to oppose. Force his party to go on record as the party of bigger taxes, more government and no reform. Force him to tie his former Secretary of State and Heir Apparent to his unpopular agenda.

That’s something you can run in 2016. That’s something that might bring my vote in 2016. Until then, I will remain skeptical of the GOP and their commitment to small government.

Sunday Obama Blast

As I said earlier, Obama is really lucky he has Mitt Romney distracting attention away from his silliness. Rather than put up a series of posts on his latest dunceries, I’ll put up a “Two Minutes of Hate” post on three recent news items illustrating the stupidity and power-grubbing of this Administration:

The Competitive Enterprise Institute estimates that federal regulations impose a shocking $1.8 trillion in regulatory costs on the economy. This is 20 times what the CBO estimates ($90-100 billion). While I think the CEI is probably overshooting, it is likely the real number is much closer to theirs than the CBO’s (the Small Business Administration got a similar estimate). Now some regulatory costs we can live with — clean rivers, acid-free rain and bug-free meat are good things. But I think we can get the same results for a lot less than $1.8 trillion. The Obama people, who have grown that cost to the tune of a couple hundred billion, keep claiming that Cass Sunstein is going to fix this situation. Given that he accepts the CBO’s estimate, I don’t see that happening.

This story, a must-read, deals with new federal regulations on school lunches. The feds, in their infinite wisdom, have decreed that lunches can not exceed 850 calories. Whether you are a 100 pound computer jockey or a 200 pound linebacker, you get 850 calories. Athletes are starting to feel hungry in the middle of the day which doesn’t exactly help their concentration. Moreover, the government is pushing schools toward low-fat diets, including low-fat or no-fat milk. The stupidity of that literally boggles the mind. Kids’ brains are still developing. They need fat, especially the kind of fats you get in milk, to build their brains. We are rendering a generation of kids stupid in our mindless pursuit of the fucking BMI and the fucking food pyramid, two health concepts that make leeches look scientific and rational.

You may have heard about the spate of beard-cuttings going on in an Amish community in Ohio. Like me, you may have assumed this would be dealt with in a sensible manner: assault charges against the debearders. You would be wrong. The Feds took over the case and got a conviction on hate crime charges. As the indispensable Jack Sullum points out in the link, these guys could spend decades in prison. For cutting off beards. They might have been better off just murdering their victims.

When Republicans opposed the Matthew Shephard Act, they were branded as bigots. And … perhaps it was anti-gay sentiment that motivated them. But now that the law is passed, it has given federal authorities a truly dangerous amount of power. They can literally make a federal case out of and send someone to prison forever for thought crime.

Doing Business in America

We all know that regulatory uncertainty is a conservative myth, right? The very idea that the tens of thousands of pages of federal regulations are inhibiting American business is just laughable, no?

Well, someone forgot to tell the Economist:

America is meant to be the home of laissez-faire. Unlike Europeans, whose lives have long been circumscribed by meddling governments and diktats from Brussels, Americans are supposed to be free to choose, for better or for worse. Yet for some time America has been straying from this ideal.

Consider the Dodd-Frank law of 2010. Its aim was noble: to prevent another financial crisis. Its strategy was sensible, too: improve transparency, stop banks from taking excessive risks, prevent abusive financial practices and end “too big to fail” by authorising regulators to seize any big, tottering financial firm and wind it down. This newspaper supported these goals at the time, and we still do. But Dodd-Frank is far too complex, and becoming more so. At 848 pages, it is 23 times longer than Glass-Steagall, the reform that followed the Wall Street crash of 1929. Worse, every other page demands that regulators fill in further detail. Some of these clarifications are hundreds of pages long. Just one bit, the “Volcker rule”, which aims to curb risky proprietary trading by banks, includes 383 questions that break down into 1,420 subquestions.

Hardly anyone has actually read Dodd-Frank, besides the Chinese government and our correspondent in New York (see article). Those who have struggle to make sense of it, not least because so much detail has yet to be filled in: of the 400 rules it mandates, only 93 have been finalised. So financial firms in America must prepare to comply with a law that is partly unintelligible and partly unknowable.

And that’s just Dodd-Frank. Remember Sarbanes-Oxley, the legislation that was supposed to prevent another financial crisis? Haha. Good times. Well, you combine Sarbanes-Oxley with Dodd-Frank and you’ve got a mess of regulation so dense that Facebook recently blasted the regulatory environment for making their IPO a nightmare. This is why more IPOs are occurring in markets away from our shores than within them.

It’s not just Obama, either. He’s done a lot of damage — the Economist notes that the number of diagnostic codes in our healthcare system will increase next year from 18,000 to 140,000. And last week he made a laughable proposal for “tax reform” that would end up with lower rate but more loopholes, credits and subsidies. But Republicans have played their part, too, pushing “anti-terrorism” regulation that has slathered immigration, finance and travel in paperwork. And SOX was signed by Bush.

Getting rid of regulations sounds good, but there are a lot of regulations that we need. As the financial crisis showed, we have a banking industry that will happily construct elaborate financial vehicles that even they don’t understand. We have whole industries that will pretend they’re not hurting the environment. They do this not because they are evil, but because they are human and it simply human nature to pretend a problem doesn’t exist when it involves our money, our power or our pride. The lead industry spent decades ignoring their own scientists and insisting that lead was harmless. That wasn’t because they liked the idea of children destroying their brains; it was simply a willing suspension of disbelief. Government is an imperfect and frustrating regulator. But it’s not something we can simply push off a cliff.

But attacking regulation piecemeal — the way Obama has kind-sorta proposed and the way the Republicans kinda-sorta do — isn’t going to work either. There are tens of thousands of regulations and we could spend weeks getting rid of just one. Each one has its advocates; each its pencil-pushers who depend on it. The inertia is simply enormous.

No, what we need — what the Economist notes and what Phillip Howard has been flogging for years — is a complete change in our approach to regulation. What we have designed is a system that tries to idiot-proof itself, that tries to anticipate every eventuality, ever possibility so that there is no possibility of error. But in doing so, we have made the perfect the enemy of the good. We have a system in which something as simple as finding out how much money a bank has can take years. We have a system is incapable of responding to new problems until new rules have been passed. This is like mapping out a mine field by stepping on all the mines.

What we need to do is strip down the regulations to the basics and empower bureaucrats to use their judgement. Hand in hand with that comes accountability — the ability to fine or fire bureaucrats who exceed their authority and make bad decisions.

That has a downside, too: bureaucrats with power and regulations that are necessarily not specific to every conceivable situation. It is this situation that Harvey Silverglate raged against in his book. But the alternative is a nation that can not move a pinkie without years of discussion and millions in legal fees. The alternative is that the Gulliver of American industry is tied down by a million Lilliputian strings of regulatory bullshit.

And the Left should be the biggest cheerleaders for regulatory reform. They keep telling us we need to remake our energy industry to fight global warming. How on Earth are we going to do that when it takes ten years to do the environmental impact study for a single power line? They keep telling us we need a better approach to immigration. We can’t do that when even getting a work visa involves three pounds of paper and half a pint of blood. They keep telling us our healthcare system is too expensive. How are we supposed to make it cheaper when every hour of patient care is matched by an hour (or two) of paperwork?

Republicans make a lot of noise about regulation but I’m not sure how serious they are since heavy regulation favors powerful businesses (see the CPSIA). They seem happy to rant about it on TV but show little inclination to do anything besides fight a rule or two that have gotten some attention in the media. They are unable or unwilling to admit that any progress on regulatory reform is going to mean giving some power to government agents to interpret and enforce the law.

I don’t like the idea of empowering bureaucrats any more than you do. But as long as it comes with accountability — the ability to punish those who exceed or abuse their power — it’s the least worst alternative.

And what’s the worst alternative? What we’re enduring now. A regulatory state that is massively complex, hideously expensive and doesn’t accomplish anything.