The Volokh Conspiracy
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The Biden Administration Finally Taps a Regulatory Czar
Noted environmental law scholar Richard Revesz will be nominated to head the White House Office of Information and Regulatory Affairs
Yesterday, the White House announced that President Biden will nominate Professor Richard Revesz to be Administrator for the Office of Information and Regulatory Affairs (OIRA) in the White House Office of Management and Budget, a position often referred to as "regulatory czar." It is, by some accounts, the most government important job you may may not have heard of before.
This is a long-awaited, and quite significant, announcement. OIRA is the White House office that oversees the development and promulgation of new federal regulations and ensures that federal agencies comply with applicable Executive Orders on the issuance of regulations. Among other things, OIRA makes sure agencies conduct adequate cost-benefit analyses and consider the likely consequences of proposed regulations, and that agency regulations are as consistent with administration policy as relevant statutes allow.
Given OIRA's responsibilities, Revesz was always an obvious choice for this position. As the former Dean of the NYU School of Law and Director of the American Law Institute, he is immensely well respected, and much of his scholarship has honed in on issues central to OIRA's responsibilities. Among other things, he co-authored two books making a progressive defense of cost-benefit analysis (which I reviewed here and here), and he founded NYU's Institute for Policy Integrity, which focuses on many regulatory process issues and hosts conferences and produces reports buttressing the analytical case for more aggressive federal environmental regulations.
Some preliminary news reports suggest the Revesz nomination represents a triumph of the "establishment" over the progressive wing of the Democratic party. The Biden Administration had apparently considered another legal academic for the position, Vanderbilt law professor Ganesh Sitaraman, a former Elizabeth Warren staffer who was favored by progressives, but who could not be assured of attracting the support of all fifty Democratic Senators. It seems efforts to corral fifty votes for a potential Sitaraman nomination were one reason for the delay.
I was hardly privy to any of the internal debates, but I would think progressive organizations should be happy with the Revesz pick. If the goal is to have an OIRA administrator who supports an aggressive regulatory agenda, but will also force agencies to conduct rigorous analyses and bulletproof new rules from legal challenges, it would be hard to do better. Indeed, I suspect that if Revesz had been in the position a year ago, some Biden Administration efforts might have fared better in court. One thing is for sure, those hoping to challenge Biden Administration regulations will have a harder time once Revesz is confirmed.
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Among other things, OIRA makes sure agencies conduct adequate cost-benefit analyses
In other words, since the costs are always easier to quantify than the benefits (and if you're having trouble, there are some friendly lobbyists to help), this is the person whose job it is to prevent effective regulation.
Yale indoctrinated lawyer and obviously a denier of the failure of the lawyer profession. Crazy, a lawyer to judge scientific information.
This lawyer will never require that regulations be tested and shown to be safe and effective, with a list of unintended consequences.
You make it sound as though this is a bad thing
Well, it is why we/you can't have nice things. So yeah.
Oh. Is that why we have carbon taxes?
Stop making things up.
They're so bad at this we should let them control everything!
Shorter Martinned: "It's too hard to figure out whether these policies are actually beneficial, so we should just stop asking."
"as a rule, regulation is acquired by the industry and is designed and operated primarily for its benefits." - Nobel laureate George Stigler
This is called regulatory capture, the process by which regulatory agencies eventually come to be dominated by the very industries they were charged with regulating. Regulatory capture happens when a regulatory agency, formed to act in the public's interest, eventually acts in ways that benefit the industry it is supposed to be regulating, rather than the public.
Under this theory of regulatory capture, an industry or some portions of an industry cultivate government to obtain laws and rules that favor the industry. The government trades favors for what it wants. Politicians gain political contributions, side payments, and votes for being seen to control the industry. The industry captures the regulators.
In the shorter term, the interest groups use the state against the public. In the longer term, the state and its bureaucrats rule the roost. In the end, the government bureaucracies expand. Paperwork and soft jobs rule the industry, innovation and competition are eclipsed, and the public suffers from poor product quality and high prices.
Continuing this line of discussion:
If the regulation and control by the state get bad enough, the market may find new ways to provide the same kinds of services. If the railroad industry is killed off, then trucking, buses, private autos, and air transport have incentives to replace rails. If medical practice declines, then home medical devices may spring up. Or the AMA may get competition from other kinds of doctors, domestic and foreign. The competition to meet needs will continue under new forms.
The government has an incentive to stop them or control them. It can do this by extending regulation to these new markets. The regulated industry will itself probably call for regulation of the new competitors so as to maintain its monopoly position. Hence, in the case of railroads, we can predict that truck, bus, and air transport will also come to be regulated. However, the regulators are usually behind the curve in technology and creativity. They are regulating last decade's model. The market leaps ahead at such times, and the public gets a reprieve.
Third, political reform or liberalization movements may occur. There are political profit opportunities for populist reformers who promise to reform an under-performing system. By promising that the state will loosen its grip on the industry, they may gain public support and win election. Privatization may occur, as under Thatcher in England. Within the seemingly monolithic Communist systems of the Soviet Union and China, rival factions competed for control. Even Castro's Cuba has seen a loosening trend because he could not kill the patient altogether. And there are more moderate and more statist factions in Iran.
Fourth, while such reform movements go deep enough to be noticeable, they hardly ever go all the way back to a high degree of freedom. And after a while, enthusiasm peters out and the counter-liberal forces begin to regroup and reassert their dominance. This occurs partly because reform movements are often not radical enough. If they retain large vestiges of the earlier regulatory systems, then they will be blamed when things go badly. And things often do go badly unless a complete deregulation occurs. Statists have had a field day in California because of the botched and partial de-regulation in the electricity industry.
Fifth, the government does not find that all industries are equal prey. It has an incentive to control those industries (a) that can't escape as easily from the country and (b) for which there are fewer substitutes. At the time the US government began to control the railroads, autos and airplanes didn't exist. And the large fixed capital investments of the railroads within the continental United States made them good fixed targets. Similarly, medical services have to be delivered to individuals on the spot within the country's borders, and home medical devices like those today were not widespread in 1910 — although there have always been home remedies.
Sixth, when over-regulation occurs and the trap is sprung, the industry may try to escape overseas if it can or the customers will take their business overseas if they can. They will search for lower-cost places to do business. Many clear examples occur under financial regulation because many elements of financial dealings can be transacted overseas. Ceilings on interest rates paid on deposits led at one time to dollars fleeing overseas, whereupon a eurodollar market grew up. Sarbanes-Oxley regulation leads to overseas listings or even incorporation. Excessive regulations of exchanges leads to lower cost trading venues in London, or else trading shifts to over-the-counter formats.
Seventh, if business escapes the country as in the case of some financial services, the government may again respond in order to maintain its control. One method of control is to form a political cartel with other governments. It is usually called "harmonization." The most heavily regulating government will try to get the other governments to "improve" their regulation, that is, to copy that of the heavy regulator. This occurs in the guise of labor, safety, and environmental standards, for example.
It's worth pointing out that state and local governments can also play the same regulation game. But they can't control those industries that can easily flee the state and do business in another state. This is why states focus on more locally oriented interests like barbers, beauticians, and construction trades, etc. Even so, they face the ultimate threat of depopulation of the state or locality. A small locality, however, such as a university town, can impose rent controls since it can count on the university remaining in the area, and students may not wish to travel or find that travel time and costs are high.
Regulatory capture isn't always done by the regulated industry, though. Sometimes it's done by people hostile to the industry. Like the NRC.
It's a Democratic Administration with a well-qualified person at the top and a deep, deep bench of well-qualified, like-minded professionals around the nation. It's natural that they appoint well-qualified people.
Who are you claiming is the "well qualified" person at the top and who among the "deep, deep bench" has done anthing positive for the past year and a half?
The well-qualified person is the one who forgot all the times he talked to his son about influence peddling, and recently forgot the speech he had just given. The deep, deep bench includes the people who claimed that the Biden administration has created ten thousand million jobs and who gave us such gems as this:
https://www.whitehouse.gov/wp-content/uploads/2022/08/08-2022-OSTP-Public-Access-Memo.pdf
“Well qualified” I’ve about concluded that this is the most hopelessly incompetent administration in my memory. And I can remember back to JFK (although my only memory of the JFK presidency was the last day of it).
So somehow these guys/gals are out bumbling LBJ and Nixon. Everything they do has been a disaster.
Only took Biden 16 and a half months to make a nomination, when his party controls the Senate. If this were still the Trump administration, the news media would be slavishly telling us all about the "churn" and "chaos" of these personnel appointments. Under Biden, it's just another day.
"The Biden Administration Finally Taps a Regulatory Czar"
Can we stop using that obnoxious term for a position that acts as an inter-agency coordinator?
Yes please.
OK by me. Call him a Regulatory Tsar instead.
Regulatory Caesar
Typo or inadvertent truth: "It is, by some accounts, the most government important job you may may not have heard of before"
Let me just note that this terminology, "Taps" meaning "picks", strikes me as a bit off. To "tap", relevantly, is to draw something from the thing tapped. You tap a keg, for instance, not the pint you've drawn from it.
In the normal usage, you might say that Biden had "tapped" NYU for Revesz. Not that Revesz himself had been tapped. Unless maybe he'd donated blood...
I've always had the sense that it is an abbreviation of "tap on the shoulder", as suggested here: https://english.stackexchange.com/questions/583132/meaning-of-tapped-on-the-shoulder
And not to be confused with "tap that", which supposedly is derived from tapping a keg: https://www.urbandictionary.com/define.php?term=tap%20that
"Tap" in this sense does mean "select," rather than "draw." Not to get too elitist, but it usually comes up in the context of being selected for a secret society -- you get "tapped" by one of the current members, which is like getting an offer or nomination. Interestingly, IME, that terminology does not extend to traditional fraternities (or sororities). We would get "bids" to join, and "sinking" that bid signified acceptance. No tapping involved.
Does Professor Richard Revesz have any real world experience? Has he had to deal with government regulations or regulators as a business owner?