The federal government tends to follow a bass-ackward approach to regulating business activity.
First, it decides what it wants. Then it writes a regulation. Then it does an analysis to justify the regulation.
In other words, a procedure of “ready, fire, then aim.”
This disoriented approach helped to bring about many of the more than 165,000 pages of federal regulations, close to 20,000 added in the past few years, according to the Mercatus Center at George Mason University.
In its attempt to assume the job of “protecting the safety and health of consumers and workers, the federal government places an enormous load on business and industry as well as, often, average Americans,” a report from the Mercatus Center said.
Psychology, economics, and organized science, however, suggest that too many regulations—particularly highly detailed regulations—may make society less, rather than more, safe. In the Center’s study, “Regulatory Overload: A Behavioral Analysis of Regulatory Compliance,” psychologists and economists examined behavioral effects of regulatory overload on business. They discovered that too many and too detailed regulations can reduce compliance, discourage innovation, and fuel uncertainty, “ultimately making Americans less safe.”
A recent example: Automakers were required by the administration to double current fuel economy by 2025. Of course, the specific standard was picked without rationale—after first publicly floating other standards. Cost of compliance will be $8.5 billion a year.
It also will costs “untold numbers of jobs and–most inexcusable—the loss of lives.” Regulations in recent years forced car makers to downsize vehicles to meet standards that increased traffic fatalities by the thousands, according to the EPA’s own Inspector General’s Report.
An Environmental Protection Agency regulation to try to keep soot from power plants from drifting across state lines was suspended by a federal court Jan. 1, as reported by The Wall Street Journal. The court ruling “recognizes the irreparable harm that would have resulted from the short time line for compliance” said CEO David Campbell of Luminant, a Texas power company.
The EPA rule was stayed for the time being. But the court’s stay of the regulation for soot that may waft across a state line disheartened EPA bureaucrats, who couldn’t enforce their regulation immediately. The rule would affect about 1,000 power plants in more than two dozen states. It would have required them to cut emissions of sulfur dioxide by 73 percent—not 72 percent or 74 percent—and nitrogen oxide by 54 percent—not 53 or 55 percent from 2005 levels by 2014. One might well ask who chose and why did they choose such specific figures that could be changed by so many factors during the EPA’s timeline. Ready, fire, aim.
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