Overregulation in America

Rick Moran
This piece in the Economist nails it as far as the true cost of laws like Dodd-Frank and Obamacare - the incredible burden of excessive, poorly written regulations:

Dodd-Frank is part of a wider trend. Governments of both parties keep adding stacks of rules, few of which are ever rescinded. Republicans write rules to thwart terrorists, which make flying in America an ordeal and prompt legions of brainy migrants to move to Canada instead. Democrats write rules to expand the welfare state. Barack Obama's health-care reform of 2010 had many virtues, especially its attempt to make health insurance universal. But it does little to reduce the system's staggering and increasing complexity. Every hour spent treating a patient in America creates at least 30 minutes of paperwork, and often a whole hour. Next year the number of federally mandated categories of illness and injury for which hospitals may claim reimbursement will rise from 18,000 to 140,000. There are nine codes relating to injuries caused by parrots, and three relating to burns from flaming water-skis.

Two forces make American laws too complex. One is hubris. Many lawmakers seem to believe that they can lay down rules to govern every eventuality. Examples range from the merely annoying (eg, a proposed code for nurseries in Colorado that specifies how many crayons each box must contain) to the delusional (eg, the conceit of Dodd-Frank that you can anticipate and ban every nasty trick financiers will dream up in the future). Far from preventing abuses, complexity creates loopholes that the shrewd can abuse with impunity.

The other force that makes American laws complex is lobbying. The government's drive to micromanage so many activities creates a huge incentive for interest groups to push for special favours. When a bill is hundreds of pages long, it is not hard for congressmen to slip in clauses that benefit their chums and campaign donors. The health-care bill included tons of favours for the pushy. Congress's last, failed attempt to regulate greenhouse gases was even worse.

Deliberately trying to make the law as complex as possible serves two purposes. As mentioned above, it allows for stealth legislation aimed to benefit a politician's cronies. But second, by making the law unintelligible to ordinary people, the elites are able to maintain their dominance. They are the only ones who either understand the new regime or are rich enough to hire someone to interpret it. How much of Obamacare was written by health care lobbyists? We'll never know.

Every well ordered society needs some regulation. But with the Federal Register - the bible of the regulatory community - at 145,000 pages with 6,000 or more being added every year, the term"overregulated" has lost its meaning. More to the point, we have the heel of government on our necks and the weight continues to get worse.


This piece in the Economist nails it as far as the true cost of laws like Dodd-Frank and Obamacare - the incredible burden of excessive, poorly written regulations:

Dodd-Frank is part of a wider trend. Governments of both parties keep adding stacks of rules, few of which are ever rescinded. Republicans write rules to thwart terrorists, which make flying in America an ordeal and prompt legions of brainy migrants to move to Canada instead. Democrats write rules to expand the welfare state. Barack Obama's health-care reform of 2010 had many virtues, especially its attempt to make health insurance universal. But it does little to reduce the system's staggering and increasing complexity. Every hour spent treating a patient in America creates at least 30 minutes of paperwork, and often a whole hour. Next year the number of federally mandated categories of illness and injury for which hospitals may claim reimbursement will rise from 18,000 to 140,000. There are nine codes relating to injuries caused by parrots, and three relating to burns from flaming water-skis.

Two forces make American laws too complex. One is hubris. Many lawmakers seem to believe that they can lay down rules to govern every eventuality. Examples range from the merely annoying (eg, a proposed code for nurseries in Colorado that specifies how many crayons each box must contain) to the delusional (eg, the conceit of Dodd-Frank that you can anticipate and ban every nasty trick financiers will dream up in the future). Far from preventing abuses, complexity creates loopholes that the shrewd can abuse with impunity.

The other force that makes American laws complex is lobbying. The government's drive to micromanage so many activities creates a huge incentive for interest groups to push for special favours. When a bill is hundreds of pages long, it is not hard for congressmen to slip in clauses that benefit their chums and campaign donors. The health-care bill included tons of favours for the pushy. Congress's last, failed attempt to regulate greenhouse gases was even worse.

Deliberately trying to make the law as complex as possible serves two purposes. As mentioned above, it allows for stealth legislation aimed to benefit a politician's cronies. But second, by making the law unintelligible to ordinary people, the elites are able to maintain their dominance. They are the only ones who either understand the new regime or are rich enough to hire someone to interpret it. How much of Obamacare was written by health care lobbyists? We'll never know.

Every well ordered society needs some regulation. But with the Federal Register - the bible of the regulatory community - at 145,000 pages with 6,000 or more being added every year, the term"overregulated" has lost its meaning. More to the point, we have the heel of government on our necks and the weight continues to get worse.