Wednesday, February 8, 2017

"2-for-1" Marketing Ploy is Bad Policy

By: Lesley McAllister

I’ve been thinking about the ridiculous Executive Order, signed last week, calling for two regulations to be “identified for elimination” for every new one proposed.  Trump's so-called "2-for-1" EO.  Amidst all the other horrible news (e.g., the DeVos and Sessions confirmation hearings), it hasn’t gotten as much publicity and criticism as it deserves. 

Federal regulations pass though many steps before they are promulgated. One of the most time-consuming and sometimes contentious is a cost-benefit analysis.  It is time-consuming because it is complicated – imagine trying to put a dollar value on all the costs and all the benefits of a new traffic safety or air pollution rule. Now that such analyses have been required for so many years, we have experts in the agencies and in the White House (specifically in the WH Office of Management and Budget’s Office of Regulatory Analysis, OIRA) who do all this work.  But it is often contentious because it’s not straightforward how to monetize the value of an avoided traffic accident or a asthma-free childhood.  And, importantly, for a regulation to make it into the Code of Federal Regulations, generally its benefits must be deemed to outweigh its costs.

So, when you revoke that regulation, you are losing all those benefits, not to mention the time and energy (of agency staff, of advocates, and others) that went into putting the regulation in place. And I don’t think there are a lot of costly, dumb regulations just waiting for elimination.  Obama and prior presidents were also sensitive to the issue of regulatory costs, and an Obama issued an Executive Order in 2011 that required agencies to review existing regulations to determine if they need modification or repeal.  My guess is that there’s not much deadwood left. 

The bottom line here is that Trump’s EO doesn’t just mimic a marketing ploy, it IS a marketing ploy. It sells the idea that there’s too much regulation and that regulation doesn’t provide benefits. In fact, the reality is the reverse.  Regulations protect our environment, economy, health and safety, and general welfare.  Trump wants to take away the benefits we get from protective regulation, and prevent new regulations that would further benefit and protect us -- from climate change, financial downturns, and many other pressing problems on the horizon. It's a marketing ploy. Don't buy it!

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Knowing regulatory agencies, I am sure they will find a way to work around this. Maybe double the length of new regulations to cover what 2 old regulations addressed!

Posted by: Larry Mugler | Feb 10, 2017 3:38:08 AM

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