regulation

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This Is the Government We Pay For

Tuesday, April 15th, 2014

We live in a time when the governing political party and the dominant strain in the major media constantly harp on two themes:

  1. Capitalism is wasteful, not environmentally sound, and
  2. We need more regulation from government.

So, it is especially droll to witness the Food and Drug Administration pounce upon an age-old recycling practice between breweries and farms. In the name of “better regulation,” and “safety,” of course.

For well over a century beer brewers have disposed of their spent grain product — the non-beer product of the beer-making process — by giving or selling it cheaply to farmers, who feed it to livestock.

It would cost a lot to dispose of this in landfills, so brewers save money by letting farmers take the dregs off their hands.

But now the FDA, in a new set of proposed rules (proposed not by Congress, by the way), wants to protect cattle’s food supply by requiring brewers to dry the spent grain before shipping it off.

That’s a killer cost. One Oregonian brewer referred to it as an “enormous burden,” and warned that higher consumer prices would be the result.

I’m with Oregon Senator Ron Wyden (D), who demands that the agency go back to the drawing board.

“I don’t know everything about beer,” Wyden has been quoted, “but I do know when a federal agency acts like it has had one too many.”

For my part, I don’t see this as aberrant behavior from a federal agency. I see it as typical.

Typically drunk on power.

This is Common Sense. I’m Paul Jacob.

Just What We Need

Monday, February 3rd, 2014

Why is schooling so expensive? Government makes it so.

Take the recent example, in California, of “coder boot camps.” These are “schools” where computer coders receive training. We now learn that the Golden State’s education bureaucrats are cracking down on this unlicensed and unregulated form of learning.

Unless they comply, these organizations face imminent closure and a hefty $50,000 fine. These organizations have two weeks to start coming into compliance.

In mid-January, the Bureau for Private Postsecondary Education (BPPE) sent cease and desist letters to Hackbright Academy, Hack Reactor, App Academy, Zipfian Academy, and others.

The regulators insist that these private enterprises fall under their regulatory domain, and they are going to do their job, dangit, even if it helps . . . no one.

Reaction from the coder academy heads has been boilerplate. They’ve attested to their will to co-operate with regulators, but worry that current regulations do not really have much to do with what they are up to.

Hey, regulators, rather than shut these academies down, or cook up new regs, why not just let the operations go on as before?

Worried about quality control in a consumer-protection sense? Then make one requirement: The schools should notify paying students that the academy’s services and education contracts are unregulated by the state. Make do, students, with caveat emptor, as before. That is, by the principles of market supply and demand, and undergirding laws against fraud.

This is Common Sense. I’m Paul Jacob.

Planners Cover Up Waste

Friday, January 3rd, 2014

You know that politicians waste money. You guess that they waste a lot of time.

But did you know they deliberately waste our time?

Transportation scholar Randal O’Toole regales us with the fix that California’s overlords have put themselves in. Merely assuming that dense city living decreases commuting, California’s legislators cooked up a law requiring local governments to increase population density.

But it turns out “transportation models reveal that increased densities actually increase congestion, as measured by ‘level of service,’ which,” O’Toole informs us, “measures traffic as a percent of a roadway’s capacity and which in turn can be used to estimate the hours of delay people suffer.”

So what to do? Golden State’s august solons have exempted cities and municipalities from calculating and disclosing the bad effects of their own legislation. They offer other standards, all of which, O’Toole explains, demonstrate only “that planners and planning enthusiasts in the legislature don’t like the results of their own plans, so they simply want to ignore them.”

The gist of the new standards of “regulation”? “[T]hey ignore the impact on people’s time and lives: if densification reduces per capita vehicle miles traveled by 1 percent, planners will regard it as a victory even if the other 99 percent of travel is slowed by millions of hours per year.”

It’s quite apparent that politicians are willing to sacrifice our time to get what they — not we — want. Time is not money. Time is more important than money.

This is Common Sense. I’m Paul Jacob.

You Ignorant Fool

Tuesday, December 10th, 2013

About the title  —  that’s the FDA talking, not me. It’s their apparent attitude toward people who dare learn about their genes.

For $99, 23andMe analyzes your saliva and tells you about your DNA. Their site includes plenty of caveats about the possible emotional impact of the information, the possibility of errors, the limits of what one can infer about health tendencies, the advisability of taking no remedial action without further testing and consultation.

Nevertheless, the FDA has sent a WARNING LETTER to 23andMe co-founder and CEO Ann Wojcicki expressing concern that customers may, for example, rush to have dangerous prophylactic surgery like breast removal if they learn about some genetic risk factor. The company must stop marketing its product until it satisfies FDA regarding false positives, recipients with no common sense, etc. Otherwise, the agency just may have to seize 23andMe and impose penalties.

Yet, as Harry Binswanger notes, “A false positive does not force you to obey it.”

Wojcicki has now spoken up about the FDA’s letter, allowing that 23andMe is “behind schedule” in providing FDA with information, calling the bullying agency a “very important partner,” and in general speaking very carefully while stressing that new technology is not per se a bad thing.

What she doesn’t say is that any FDA interference with our ability to buy and evaluate information about our DNA, and Wojcicki’s right to discover and sell it to us, would be a very bad thing.

This is Common Sense. I’m Paul Jacob.

Bailout Follies

Wednesday, September 18th, 2013

Economic news, these days, seems to be driving home some very old economic wisdom — about foolishness.

In an essay on banking from the 19th century, a writer quipped, “The ultimate result of shielding men from folly, is to fill the world with fools.” This basic lesson — that it is dangerous to shore up bad practices with bailouts and specially tuned central banking policies — is being borne out, once again, in the American economy. Thank the L.A. Times’s sad, sad article “Forget too big too fail: some banks now too small to succeed.” The article’s blurb nicely synopsizes smaller, non-bailed-out banks’ plight: “Small banks are finding it increasingly tough to survive, in part because of the cost of complying with regulations stemming from the financial crisis.”

Remember that 2008’s financial implosion led to a double whammy of governmental overkill:

  1. Bailouts for the biggest fools and
  2. Regulations for everybody, including the wisest players.

The former kept the fools in place and ready to do more damage, since their folly had basically been rewarded. The latter burdens all players, but the costs are hardest for smaller outfits to bear, while bigger outfits can easily jump those regulatory hurdles.

The details of all this constitute “news,” but the principles are old (I’ve discussed them here many times). Bailouts reward the biggest fools, and regulations protect the biggest players from competition from smaller ones.

Yes, indeed, the ultimate result of shielding bankers from the effects of their folly is to fill the world with foolish bankers.

This is Common Sense. I’m Paul Jacob.

Prosecution Magnet

Thursday, September 5th, 2013

Buckyballs are little round magnets that can be sculpted into intricate geometrical patterns, providing responsible adults good clean fun.

Though marketed to adults, and despite the company’s extensive informational systems to discourage their use by unsupervised children, Buckyballs were indeed ingested by a few kids, alas. The ultimate misuse.

Even if you haven’t read those few horror stories — thankfully, no deaths have been reported, something you can’t say for drape drawstrings, tricycles, and bathtubs — you can probably imagine the huge havoc little magnets can wreak in little intestines.

Perhaps you might think it is up to parents to keep such adult playthings out of reach of toddlers and ultra-foolish older children, but this is America — and this is the age of regulation and loose liability lawyering.

So of course they were banned, and the company that made them, Maxfield and Oberton, folded.

There is a long story behind the Consumer Product Safety Commission’s ban on Buckyballs. One could use it to limn the strange world of modern American product liability and business regulation. But it’s not the only story. As Ari Armstrong put it,

Now, not satisfied with destroying Maxfield and Oberton, the CPSC is seeking to destroy the company’s former CEO, Craig Zucker — who led a spirited although ultimately unsuccessful public campaign against the CPSC’s actions.

Zucker’s “Save Our Balls” campaign was, he said, a success, “but not successful enough to save the company.” Apparently it really ticked off folks at the CPSC, for the agency, against its own legal authorization, continues to prosecute Zucker personally.

Zucker fears this personal vendetta “is just the beginning.”

This is Common Sense. I’m Paul Jacob.

Work, Shirk, or Bug Out?

Tuesday, August 27th, 2013

Which is better: helping the working poor through regulations on business, mandating employee benefits, and cushy hire-and-fire terms . . . or through higher unemployment benefits, assistance to families, or other direct aid?

Both yield unfortunate consequences.

Italy’s employment policies protect workers, on paper. Whatever the ostensible worker salary is in the country, the mandated benefits cost the employer more than twice as much.

This proved a problem for businessman Fabrizio Pedroni, whose factory near Medona hasn’t made a profit in five years. He blames high taxes, heavy regulatory burden, and low worker productivity. So, while his employees were off on holiday, he packed up his factory and shipped it to Poland.

Actually, the tail end of his move was stymied, for a while, by a hasty union blockade. Pedroni cited this as evidence for his need to bug out in secret. Had he announced the plan, the government would have just taken the property for the benefit of his employees. “I had three options — either close, move the factory, as many other businesses have done, or shoot myself in the head.”

Meanwhile, a new Cato study shows that in 16 of our United States, a “combination of food stamps, temporary cash grants, WIC, and housing assistance is worth a pre-tax value more than $30,000” to families that qualify. For some, it’s much easier to live well unemployed than employed.

No wonder unemployment persists. And economic recovery is so slow.

In both cases, programs to help everyday folks hurt them in the long run, undermining productivity, increasing dependence, and scuttling the source of progress: business enterprise.

This is Common Sense. I’m Paul Jacob.