Last week saw the publication of several new Mercatus research products. The titles and summaries are presented below.
Salim Furth and Olivia Gonzalez | Mercatus Research
California’s statewide housing crunch is not news. Academics, journalists, and political leaders have increasingly focused on strict regulation of housing supply as the culprit behind the state’s high and rising rent and home prices. Although California has many statewide rules affecting housing construction, zoning restrictions are enacted by city and county governments. In “California Zoning: Housing Construction and a New Ranking of Local Land Use Regulation,” Salim Furth and Olivia Gonzalez develop an index of regulatory stringency that ranks 249 California cities, and they find that more regulation is associated with slower housing growth.
(Salim also released a policy brief on a new idea called "development dividends," or the involvement of renters as direct beneficiaries through special payments in order to overcome opposition to new development. For more, see his paper, "Development Dividends: Sharing Equity to Overcome Opposition to Housing.")
Scott Sumner | Policy Brief
From the brief: "When evaluating Fed policy, one shouldn’t just look at interest rates. Rather, one should focus on changes in variables such as inflation and GDP. If interest rates are low, but inflation and GDP are also falling, then the low rates may reflect broader macroeconomic forces, not easy money.
Nominal GDP growth is composed of the sum of inflation and growth in real GDP. Because interest rates are not a reliable indicator of monetary policy, many economists (including former Fed Chairman Ben Bernanke) believe that changes in nominal GDP provide a better indication of whether monetary policy is too easy or too tight."
Comments to the Federal Communications Commission on Telehealth Policy
"Studying and Deploying Telehealth" | Jared Rhoads | Public Interest Comment
From the comment: "Telemedicine and telehealth present exciting opportunities for healthcare, and it is encouraging to see an effort to develop and realize this long-held potential—including one that examines the role of expanded internet access. However, the Commission’s pilot is expensive, vague, and not well positioned to make “go or no-go” implementation determinations as a pilot program should be prepared to do. The pilot could find that subsidizing internet access improves certain aspects of healthcare, but that expanding such subsidies nationwide likely would be prohibitively expensive. This pilot is thus more akin to a large research effort, which is good for researchers and patients during the study period but provides questionable lasting benefit. The public should be concerned about the cost of this proposal and the level of oversight that would be required to ensure good stewardship of public funds. Equivalent knowledge about the feasibility of various teleservices potentially could be obtained by removing regulatory barriers that slow telehealth development and letting private health systems test their ideas in a more decentralized way using their own funds. Approaches that do not rely so heavily on subsidized internet access will likely be more scalable in the long run."
"Promoting Telehealth for Low-Income Consumers" | Darcy N. Bryan | Public Interest Comment
From the comment: "[T]here are key public policy challenges in making telemedicine a reality in aiding underserved populations in America. Innovation in healthcare provision is often stymied by the precautionary principle, which is an aversion to assuming the risk inherent in trying new approaches. This leads to a shortage of capital going into funding and supporting healthcare information technology and innovation. The regulatory environment can be unpredictable and punitive, crushing startup companies before they have a chance to become successful. State-level regulations provide a significant barrier as well, with restrictive state-based medical licensing and scope-of-practice laws preventing the free flow of labor to regions in the United States with inadequate healthcare resources. State regulations make it difficult for healthcare providers using telemedicine to care for patients outside their state. At the federal level, digital health startups are regulated in a piecemeal fashion by the FDA, the FTC, and the Health Insurance Portability and Accountability Act, all of which makes it hard to develop a successful business strategy without the help of expensive legal aid."
Brent Skorup | Public Interest Comment
From the comment: "For 20 years, the FCC has administered the Fund and its various subprograms. The government audits and scholarly assessments of the Fund over the years have typically been critical. Distortionary financing, increasing costs, and occasional fraud are among the Fund’s problems. Despite updates and reforms, there are alarming signals that the Fund is ineffective at its statutory aims. A cap on the program would be a good first step so that interprogram comparisons can more easily be made. In the long term, the FCC should consider larger reforms, including reduction of Fund fees and disbursements, which will take into account the significant changes in the marketplace since the creation of the Fund."
James Broughel and Jonathan Nelson or Walter Stover | Policy Briefs
It would take an ordinary person almost three years to read the entire US Code of Federal Regulations (CFR), which contained nearly 104 million words in 2017. The sheer size of the CFR poses a problem not just for the individuals and businesses that want to stay in compliance with the law but also for anyone interested in understanding the consequences of this massive system of rules. States also have sizable regulatory codes, which add an additional layer to the large body of federal regulation. In these snapshots of state regulations, James Broughel, Jonathan Nelson, and Walter Stover apply the Mercatus Center's State RegData tool to analyze and visualize the regulatory codes of these four municipalities.