Regulation

The Pandemic Is a Reminder That Many Regulations Are Both Costly and Unnecessary

It took a crisis for policymakers to see that hundreds of rules were not worth the burdens they imposed.

|

If there is one thing the coronavirus pandemic has shown, it's that regulation gets in the way. 

Americans for Tax Reform, a conservative non-profit that advocates for lower taxes, has compiled a running—and growing—list of federal and state rules and regulations relaxed or suspended during the crisis. As of this writing, the list is up to 561 regulations. Unsurprisingly, many of the rollbacks are specifically related to the provision of health care services, one of the most heavily regulated sectors of the economy. But the regulatory rollbacks span the gamut, from legalizing cocktails to-go and relaxing rules governing distillery production of hand sanitizer to small business lending reforms to allowing "remote marriage" in a number of states. 

Each of these rules formerly made it more difficult to conduct one's business or personal affairs, and each made it more difficult to respond, or merely live, in a pandemic. It's both sad and telling that it took a unique global health crisis for policymakers to decide that they were not worth the costs they imposed.  

One reason why is that the costs of regulation are not always obvious. The nature of rulemaking is to impose hidden costs, especially when, at the federal level, the writing of regulations is largely delegated to executive branch agencies not subject to the same budgetary processes and pressures that govern Congress. 

Instead, to calculate the cost of these sorts of rules, we must turn to independent estimates like The Ten Thousand Commandments, an annual survey of the cost of the federal regulatory state produced by Clyde Wayne Crews, the vice president for policy at the Competitive Enterprise Institute, a libertarian think tank. 

The latest edition of the report, out today, tabulates the total yearly cost of federal regulation at $1.9 trillion. That's equal to about 9 percent of the total national economy. In addition, the federal government spent about $72 billion to administrate these rules, according to an estimate by The Weidenbaum Center at Washington University in St. Louis and the George Washington University Regulatory Studies Center in Washington, D.C. That breaks down to an average of about $14,000 per household annually. If it were a tax, the total burden would be larger than all corporate and personal income taxes combined. 

The majority of these rules come from just a handful of federal agencies, according to the report: The Departments of Commerce, Defense, Health and Human Services, the Interior, Transportation, the Treasury, and the Environmental Protection Agency, which together account for a little more than half of all conventional federal regulations. It is not too hard to see the impact these agencies have on nearly every aspect of life: Although unelected, they have become de facto lawmaking entities, setting legally enforceable rules whose costs Congress never explicitly considered. On average, in 2019, each federal law resulted in 28 new rules—up from 11 per law in 2018. 

Courts, meanwhile, have adopted a doctrine that amounts to presumptive deference to agency interpretations of rules under which any "rational basis" will do. Federal agencies not only get to make rules that act as laws, they are granted considerable leeway to decide what those rules mean. 

CEI has been tabulating these costs since 1993; since then, federal agencies have issued more than 107,000 rules. President Trump has, to his credit, taken steps to reduce the flow of federal regulation, implementing a two-in, one-out rule. But even that effort is slowing, with the Trump administration claiming only 1.7 rules "out" for every one rule "in" in 2019. 

And Trump's own impulses threaten his successes: As Crews writes, the president "has pruned rules and costs and held down regulatory output with more enthusiasm than other presidents," but his administration has also pushed forward with new rules concerning antitrust, hospital pricing, social media regulations, trade restrictions, vaping, farming and agriculture, the telecom industry, immigration, and more. "When all is said and done," the report concludes, "the administrative state cannot be said to have fundamentally changed under Trump."

The same can be said about the regulatory rollbacks spurred by the coronavirus. Although some rule changes are likely to be made permanent, the various governmental pipelines that produce them are likely to remain in place, and, in some cases, empowered. Still, the hundreds of rollbacks are a reminder of the myriad regulations that rule and restrict our lives every day—how onerous they are, how unnecessary, and how easy it is to live without them. 

Disclosure: I worked at the Competitive Enterprise Institute from 2005 through 2007. 

NEXT: Indiana Returns Land Rover Seized 7 Years Ago in Landmark Asset Forfeiture Case 

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Suderman’s articles are costly and unnecessary. Nice hot take that’s identical to 7 other Reason articles from March.

    1. Change Your Life Right Now! Work From Comfort Of Your Home And Receive Your First Paycheck Within A Week. No Experience Needed, No Boss Over Your Shoulder.uty.. Say Goodbye To Your Old Job! Limited Number Of Spots Open…
      Find out how HERE……More here

      1. I Make Money At H0me.Let’s start work offered by Google!!Yes,this is definitely the most financially rewarding Job I’ve had . Last Monday I bought a great Lotus Elan after I been earning $9534 this-last/5 weeks and-a little over, $10k last month . . I started this four months/ago and immediately started to bring home minimum $97 per/hr

        Heres what I do……………… Online Cash Earn

  2. I would gladly volunteer for a control anarchist in a study of which society progresses more, treats people more fairly, and generates more wealth: anarchy or cronyism.

    I’ve also wondered what kind of label our current economy / society warrants. It ain’t very socialist, in terms of the means of production, but it maybe is fascist, since government can basically make any business do anything the government wants, such as bake cakes, although which businesses it picks on depends on which cronies are running it. But government is pretty inept at doing that.

    I think cronyist is about as clear as anything else.

    1. it’s the definition of corporate facist.

      1. So I thought, but it’s so slowly and incompetently done, and it changes at every election, which makes me think it needs a new label.

        1. Make money online from home extra cash more than $18k to $21k. Start getting paid every month Thousands Dollars online. I have received $26K in this month by just working online from home in my part time.every person easily do this job by just open this link and follow details on this page to get started… Read Articles More

    2. >>But government is pretty inept at doing that.

      there are no ept cronies.

    3. No study needed! The rest of the world, and human history, are a vast labratory to the power of officials to get in the way of business, to get paid to get back out of the way. We call such places dictatorships, or failed states, or nominal democracies still steeped in massive corruption.

      The impulse of some to become enablers of these expanded powers transparently maps to lousy outcomes to freedom and prosperity.

      Any of value was 100,000 regulations ago.

  3. It’s both sad and telling that it took a unique global health crisis for policymakers to decide that they were not worth the costs they imposed.

    But the benefits of “doing something” and, much more importantly, to be seen to be “doing something” are of incalculable worth. It’s not as if government officials just maliciously impose these costly regulations on business and industry and consumers, it’s that it’s Other People’s Money they’re spending so who gives a shit what it costs? Saving a fish is worth tens of billions of dollars worth of foregone economic activity if you get the credit for saving a fish and none of the blame for the tens of billions in lost opportunity, especially when it doesn’t personally cost you a nickel either way and awarding yourself a medal for your environmental conscientiousness looks good on your next re-election campaign flyer.

    1. Don’t overlook the power of regulatory capture and the effects of lobbyists in Washington. For every regulation passed as “doing something” you can bet there are likely 10 passed because some interested party lobbied for it.

      1. I guarantee every regulation was lobbied by someone, especially the “do something” ones. Who else is telling them to do something?

        1. And what’s really humorous is most of those “do something” lobbyists are federal agencies. Too much lobbying is done by politicians own creations (agencies). It really becomes a self-sustaining closed-loop circling of doing nothing but wasting citizens money who consequently become the cut-out “middle man”.

          1. I should word that – “The insignificant middle-man”. I watched our local politicians enact a law with a full attendance of locals who were against the law entire because of the “Gov Agencies” lobbying for it – along with a plaque from the gov agency itself. Probably some hidden money in there too who knows. Government agencies like to call black-mail “coercion” or something friendly.

            1. Alexa Max Make 6150 bucks every month… Start doing online computer-based work through our website. I have been working from home for 4 years now and I love it. I don’t have a boss standing over my shoulder and I make my own hours. The tips below are very informative and anyone currently working from home or planning to in the future could use this website… Read Articles About

      2. Leo Kovalensky II
        May.27.2020 at 3:25 pm
        “Don’t overlook the power of regulatory capture and the effects of lobbyists in Washington. For every regulation passed as “doing something” you can bet there are likely 10 passed because some interested party lobbied for it.”
        And it was Trump’s fault, right, Leo?
        You can go to bed now, secure in your bullshit belief that all of your problems are ‘Trump’s fault!!!’
        Yes, Leo, that boogy-man under your bed is *TRUMP!!!*, and he’s going to make you do, uh, *something*….
        Grow up, you pathetic piece of shit; mommy really didn’t promise you a rose garden.

    2. Jerryskids, your comment may be the most rational/reasoned assessment. Government and unintended consequences are almost always linked. I think it’s (like you said) “But the benefits of “doing something” and, much more importantly, to be seen to be “doing something” are of incalculable worth. ”
      All laws infringe liberty and part of the problem there is that many lawmakers don’t understand the concept of liberty.

  4. “The Pandemic Is a Reminder That Many Regulations Are Both Costly and Unnecessary”

    While you’re breaking your arm patting yourself on the back, you’re being outflanked in a far more serious matter:

    “Cuomo Meets With Trump, Talks NY Infrastructure Wish List to ‘Supercharge’ Economy ”
    https://www.nbcnewyork.com/news/coronavirus/cuomo-to-meet-trump-talk-about-infrastructure-wish-list-to-supercharge-ny-economy/2433146/

    Cuomo, Newsom, and I’m sure other lefty scumbags are ‘planning’ out ‘new economies’ to be ‘more fair and green’ than what went before, and you’re focused on plastic bags.
    Once these commies get their mitts on ‘planning’ our economy, it is guaranteed to be one failed ‘plan’ after the other, each ‘planned’ to fix the failures of the last, and each thereby ‘planned’ to fail in sequence.
    Look over THERE!

    1. Fear not, I’ve been told we have the most libertarian President ever in charge.

      1. Leo, stuff your TDS up your ass; your head needs company.

      2. For at least 100 years, “most libertarian president ever” is a bar so low even ants couldn’t limbo underneath.

        1. I am making a good MONEY (500$ to 700$ / hr )online on my Ipad .Last month my pay check of nearly 30 k$.This online work is like draw straight-arrow and earn money. Do not go to office.FWs I do not claim to be others,I just work. You will call yourself after doing this JOB,It’s a REAL job.Will be very lucky to refer to this WEBSITE.

          I hope,you can find something………..► ScolloconGress

      3. Just dont go down the path of claiming Carter and Obama as libertarians like the TDS filled pedophile.

      4. How do you know you’re in the presence of a TDS victim?
        Easy: Just like, oh a vegan, start any exchange at all, say about aquarium design and the asshole TDS victim will announce he HATES Trump and you should too!
        Why, assholes like Leo wake up in the morning hating Trump and go to bed at night doing the same. Poor shits wouldn’t have a life without their TDS.

  5. “When all is said and done,” the report concludes, “the administrative state cannot be said to have fundamentally changed under Trump.”

    It can’t be changed by an administration. The only tools an administration has are those of the administrative state, so the best that can be hoped is that they’ll be wielded benignly.

    To take an example brought up in the article, vaping. The regulations that are coming out were already in the works before this administration came in, so the best the Trump administration could do was to delay and soften them, hoping to buy time for Congress to act against them.

    Fortunately it works both ways. Some deregulatory movement started under Trump may take years to work thru the bureaucracy and come to fruition after he’s out of office.

  6. CYA and concealment of wrongdoing and / or incompetency are the basis for much more of government than public good, and public good is a facade for redistributing harm.

    Government can do no good.
    Government can only redistribute and do harm.

  7. Pro-business types are a special evil lot. First, why would there ever regulation for anything that was not proven to cause harm? The only item that I can think of is cannabis. Alcohol, cigarettes and soft drinks can cause negative effects but they are not banned. What put cannabis on the list to make it worse than those three?
    There would be no need for regulations if people did not ignore the well being of others. For example, cigarette companies large and powerful. They could have told people about potential cancer decades ago. Did they do that? So were people dying a small cost so others could make money? If people dying is a small cost then why do we need a national defense? But that really does not relate to people dying but relates to people having the power to cause others to die. Again, Pro-business types are a special type of evil.

    1. “…First, why would there ever regulation for anything that was not proven to cause harm?..”

      Is this sarc or a particularly strong level of stupidity?

    2. Cannabis was banned around the same time alcohol was banned, in the 1930s. It just never was unbanned, unlike alcohol. Different reasons for that, but it has nothing to do with business in politics.

      Also today cannabis has a huge lobby giving money to politicians to push for legalization. Not sure that helps make your case.

  8. “It [government] covers the surface of society with a network of small complicated rules, minute and uniform, through which the most original minds and the most energetic characters cannot penetrate, to rise above the crowd. The will of man is not shattered, but softened, bent, guided; men are seldom forced by it to act, but they are constantly restrained from acting: such a power does not destroy, but it prevents existence; it does not tyrannize, but it compresses, extinguishes, and stupefies a people, till each nation is reduced to be nothing better than a flock of timid and industrious animals, of which the government is the shepherd.” ~ Alexis de Tocqueville

  9. “Unsurprisingly, many of the rollbacks are specifically related to the provision of health care services, one of the most heavily regulated sectors of the economy.”

    Unsurprisingly – The most EXPENSIVE sectors of the economy. Taking away free-will is by far the strongest monopoly anyone could ever hope for.

  10. If there is one thing the coronavirus pandemic has shown, it’s that Trump really disapproves of the US Constitution, in particular the 1st Amendment!

    FTFY!

    1. “If there is one thing the coronavirus pandemic has shown, it’s that Trump really disapproves of the US Constitution, in particular the 1st Amendment!”

      Lefty fucking ignoramuses do themselves no favors at all posting here. They are universally too stupid to lie very well.
      Hint: the governors are closing this and that, and the DOJ (part of Trump administration, just so you know) recently told the grease-ball Newsom to open the churches or face a federal A1 suit.
      Go back where your lies aren’t the stuff of amusement.

  11. Trump Is Actually Working Tirelessly, I Think He Is A Good President..

  12. Getting paid every month easily more than $15k just by doing simple job online. Last month i have exactly received $16839 from this online job just by giving this 2 hrs a day online. Now everybody on this earth can get this job and start earning more cash online just by follow instructions here……..for more info visit any tab this site Thanks a lotCopy Here………
    ====>>> See…….Online Earn

  13. Very efficiently written information. It will be beneficial to anybody who utilizes it, including me. Keep up the good work. For sure i will check out more posts. This site seems to get a good amount of visitors.

  14. What a wonderful world where Trumps “deregulation” now allows big corporations to turn our country back into the pre epa garbage dump it was. Time to poison our rivers and forests in the name of the allmighty dollar. Woohoo!

    1. Last poisoned river was caused by the EPA.

    2. “our country”, “our river”, “our forest” – Inside the mind of the communist; everything you own (which is thousands of miles away) is actually “ours” / mine.

      You have the disease of claiming other peoples things as your own of which you have ZERO right to be claiming. Sell your soul to the [WE] foundation because you don’t own that, “alconnolly” does.

      You have the mind of an authoritarian dictator/criminal. My yard trees aren’t “our” forests. My land ditches aren’t “our” rivers. And frankly your “poisonous” claim is just as imagined as your imagination that you own the world.

  15. The Code of Federal Regulations is not an entity, and certainly does not breathe nonetheless, it is an organism. An organism with an interest; and its first interest is to survive; which the legal profession, et. al are grateful to assist in their endeavors to procreate. In fact, a well educated and payed clerical staff mines the CFR for justice and riches. ????

  16. “One reason why is that the costs of regulation are not always obvious.”

    Especially when legislators are exempt from the rules they foist on us.

  17. We have a great democracy. Federal agencies not only get to make rules that act as laws, they are granted considerable leeway to decide what those rules mean. electrician dc

Please to post comments

Comments are closed.