The Regulatory Knowledge Problem of Health Care Reform
There was a good D.C. Examiner column over the weekend by Glenn "Instapundit" Reynolds, discussing the broader implications of the so-painful-it's-beyond-funny spectacle of Rep. Henry Waxman (D-Los Angeles) hauling a bunch of CEOs in front of Congress for their temerity in obeying securities law by promptly reporting their new post-Obamacare health care rules as a charge against future earnings. (If you want to boil your own blood, read Waxman's letter of summons [pdf].) Sez Glenn Harlan:
Hayek's insight into economics and regulation is often called "The Knowledge Problem," and it is a very powerful notion. But recent events suggest that it's not just the economy that regulators don't understand well enough—it's also their own regulations. […]
In drafting the Obamacare bill they tried to time things for maximum political advantage, only to be tripped up by the complexities of the regulatory environment they had already created. It's like a second-order Knowledge Problem. […]
The United States Code—containing federal statutory law—is more than 50,000 pages long and comprises 40 volumes. The Code of Federal Regulations, which indexes administrative rules, is 161,117pages long and composes226volumes.
No one on Earth understands them all, and the potential interaction among all the different rules would choke a supercomputer. This means, of course, that when Congress changes the law, it not only can't be aware of all the real-world complications it's producing, it can't even understand the legal and regulatory implications of what it's doing.
Read the whole thing, including the "good news" about it, here. Reynolds on ReasonTV below: