L. Neil Smith's
THE LIBERTARIAN ENTERPRISE
Number 183, July 22, 2002
"I'VE SEEN THE FUTURE BROTHER; IT IS MURDER"
I Sentence You To Death By Four Thousand Rules
Special to TLE
As the market slumps, Republicans who have held some measure of congressional power since 1994 must now expect to hear a predictable braying from the other side of the aisle: "See, we told you profligate tax cuts and the wanton slashing of wise and prudent government regulations were bound to lead to trouble!"
But have Republicans really kept their eight-year-old promise to cut federal red tape?
Actually, Cato Institute scholar Clyde Wayne Crews Jr. has been issuing for the past six years an annual report on the cost of regulation to the American economy. And this year's edition of "Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State" does show, for the first time, an annual decrease in the quantity of costly new regulations foisted on the American public.
But keep your eye on the bouncing ball, here: Mr. Crews does not report that enough Year 2000 regulations were repealed in 2001 to reduce us back to the 1999 level of regulation. No, no. He doesn't even report that the number of new regulations pretty much equalled the number (start ital)repealed in 2001,(end ital) leaving the body of federal regulations unchanged. No to that, as well.
Instead, all he's reporting is that the number of new regulations added to the Year 2000 benchmark during 2001 was slightly lower than the number of new regulations added in 2000.
Sadly, even that "drop" was minuscule.
In 2001, federal agencies issued 4,132 "final" new rules, down from 4,313 new rules added in the year 2000. The number of pages in the "Federal Register" of new regulations dropped by 13 percent, compared to the number added the year before.
A step in the right direction? Absolutely. Enough to lift a yoke -- made heavier each year since the days of Lyndon Johnson (since the days of Woodrow Wilson, if truth be told) -- from an increasingly burdened economy? As one glance at the financial pages will show, obviously not.
Regulations still cost the American economy $854 billion a year, Mr. Crews figures -- the equivalent of 8.4 percent of Gross Domestic Product, approximately equalling the amount levied in 2001 individual income taxes.
In 1998, the median two-earner's after-tax income of $41,846 was sapped by $7,410 in hidden regulatory costs, eating up about 18 percent of the average after-tax family budget, Crews finds.
Eliminating an even larger swatch of the Federal Register's remaining 64,000 pages of regulations -- many of them useless, counterproductive, or purposely subversive of the free market -- would obviously be a quick way to infuse new energy into a sagging private sector. With the pendulum finally starting back in the proper direction (and not a moment too soon), now is the time for Congress to don their chaps and gloves and wade into the regulatory thicket with the proverbial backhoe and chainsaw.
"Years of unabridged regulatory growth should be of concern," the Cato report warns. "Most of the time we simply don't know whether regulatory benefits exceed costs. The real culprits are not the agencies: Congress ... shirks its duty to make the tough calls, delegates too much of its lawmaking power to non-elected agencies, and then fails to require that they guarantee net benefits. ...
"Agencies face overwhelming incentives to expand their turf by regulating even in the absence of demonstrated need, since the only measure of agency productivity -- other than growth in its budget and number of employees -- is the number of regulations," the Cato scholar continues. "Congress passed and the president signed into law 108 bills in 2001. But ... unaccountable regulatory agencies issued 4,132 rules. The unelected are doing the bulk of the lawmaking. ...
"By regulating instead of spending, government can expand almost indefinitely without explicitly taxing anyone a single penny," the Cato scholars conclude. "Making Congress accountable for regulation in the same manner it is accountable for ordinary government spending is the only way to head off this sort of manipulation."
But indefinite government expansion through regulation is what you signaled you wanted, isn't it -- the last time you voted for a Republicrat?
We have an e-gold account,