February 17, 2017

Time to Re-Examine Outdated Regulations

Bruce Yandle

Distinguished Adjunct Fellow
Summary

Wouldn't it be wonderful if some of our regulatory barriers were removed so that we might once again participate in a fast-growth economy?

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Anyone commuting to work by car regularly encounters closed lanes that lead to congestion and delays. Maybe it's a three-lane expressway that suddenly loses one lane, one-third of its normal capacity. Squeezing an urban highway's capacity is expensive business. Delay costs for a few thousand commuters add-up quickly.

There are usually good reasons for lane-closing. Maybe it is an accident that has to be cleared away or a needed highway repair to be completed. The capacity lost is temporary. But always, there are artificial yellow and black barrels, or maybe rubber pylons, put in place to close off capacity.

But what if the people who put the barrels and pylons in place forgot to remove them once their reason for being slipped away? What if, being good, well-behaved citizens, commuters burdened by the delays, wondered when normal times might return, but continued to poke along on the congested highway? What if years passed and the barrels, now getting a bit shabby, continued to stay in place?

What if a candidate for governor said that, if elected, she would require the highway department to check and justify lane blockages throughout the state and clear away all the barrels and pylons that could no longer be justified?

Sounds like deregulation, doesn't it?

Two recent Wall Street Journal stories expressed the essence of the closed-lane metaphor. One referred to Dodd-Frank, the 2,300 page post-2008 melt-down legislation built for the purposes of preventing future financial calamities. Now, nine years later, with the legislation still putting barrels in highways, a new administration has come to town, elected partly perhaps on the promise to re-examine and require justification for regulations old and new. Dodd-Frank barrels that constrain financial traffic are high on the list for possible removal.

The second story referred to re-examination of the Sarbanes-Oxley Act of 2002 that followed the dot.com stock market collapse. Now, some 15 years later, politicians are eyeing the yellow and black barrels to see if at least some may be removed.

There are other pylons that need to be re-examined. For example the Energy Independence and Security Act of 2007, as the name implies, was designed for a nation that had diminishing native oil and gas reserves. Thanks to fracking technologies, the United States is now the 900-pound energy gorilla, but we still have energy-regulation barrels in highways that need to be scrutinized and perhaps removed.

Our major water and air pollution statutes were written for a smoke-stack economy that existed in the early 1970s when the statutes became law. Though amended numerous times, the basic command-and-control blueprint is still in place.

The smoke-stack economy disappeared decades ago. There are lots of barrels in lots of highways. Some have been in place for 40 years. It's high time the basic statutes were rebuilt from the inside-out.

Wouldn't it be wonderful if unnecessary highway barrels and pylons could be removed quickly and our commutes to work would just as quickly be accelerated? Wouldn't it be wonderful if some of our regulatory barrels were removed as well, so that we might once again participate in a fast-growth economy?