Friday, November 11, 2011

Catch of the Day

Kevin Drum makes an absolutely great point:
This is probably the biggest reason that no one should take too seriously Republican complaints about burdensome regulations strangling the economy. The truth is that most reformers prefer fairly simple rules. In the tax world, they'd prefer to simply tax all income. In the environmental world, they'd prefer to set firm limits for pollutants. In the financial world, they'd prefer blunt rules that cut off risky activity at its knees.
But businesses don't like simple rules, because simple rules are hard to evade. So they lobby endlessly for exemptions both big and small.
 Yup. The other half of this to remember is that a lot of the specific words you hear during elections, or spin in general, are very much the results of polling and focus group testing. On both sides, of course. So odds are that "regulations" just doesn't test well (or, to put it the other way, railing against regulations probably tests very well). That's fine; there's not much harm from all players describing their policies in the best possible language. Nor is there anything wrong, for that matter, with adjusting the policies that you support to account for what's popular.

Where politicians and parties go wrong is when they adjust the policies they favor in order to be able to use the words that test well, and then mistakenly believe that the underlying policies are actually popular.

Hmmm....I seem to have made a completely unrelated point. I guess because Drum hit the main point here perfectly.  I guess the only thing I'd add to it is that I wouldn't assume that regulatory complexity in order to address specific interests is necessarily a bad thing. It can be -- it's generally not good for public resources to be transferred to a particular group just because they've found a way to get political clout -- but in a continental nation of 300 millions, it's quite likely that simple, one-size-fit-all rules won't be as good as rules that can adjust for the many, many particular circumstances out there.

At any rate: Great post, and great catch!


  1. Hey JB, JB, I think you may have just modified your good-rep-keeps-a-contract-with-voters (*any* contract) theory:

    Where politicians and parties go wrong is when they adjust the policies they favor in order to be able to use the words that test well, and then mistakenly believe that the underlying policies are actually popular.

    That doesn't nec. contradict anything you've said before, but it does open some daylight for defining 'contracts' that are illusory or no good for anyone.

  2. I think Drum's point is pretty stupid. He seems to assume that, because 'risky' is a two-syllable word, it is 'simple' in the real world to distinguish what is and isn't 'risky'. When you propose a 'simple' regulation that includes a nebulous word like 'risky', you are asking for thousands of pages of definition, and the associated rent-seeking.

  3. Yep. There is an old argument that business wants "certainty".


    What business wants is to get off the hook. Or have regulations apply to a competitior. When you see business propose a regulation, it is because they are benefitting from it.

    Going back to healthcare, the one thing Obamacare could have done is elimaite 99% of the paperwork. Single-payer, baby.

  4. Charlie,

    I used to favor a single-payer plan, but now I can't get past the notion that another George Bush would get elected someday and ruin it for everybody, either on purpose or by accident.

  5. Corporations Hate Regulation, Until They Love It


    How could such a jejune statement be noteworthy?

    Is there anybody, anywhere, who doesn't understand that individual corporations seek rent in Washington, using the tax code, regulations, or whatever else is at their disposal?

    It would have to be somebody living in a cave on one of those remote islands in the Indian Ocean. Everybody else already knew this. I guess Drum didn't know it, however.

    Isn't that the Obamabots stock-in-trade... crony corporatism... and taking care of their buddies? I'd think lefties would have figured that out by now.

    That's why businesses seek simplicity and certainty. Businesses want government to stop them before they lobby again. But short of that, they'll play the game, and do as the Romans do. They have to, because governments can turn out their lights, like ObamaCare is turning out the lights on that medical implant facility here in Michigan, and costing us jobs.


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