Supersized Drinks, Social Welfare, and Liberty
Cross-posted from Legal Planet.
Obesity is an environmental issue because the food system (from farm to table) uses a lot of energy and produces significant water pollution. More food equals a bigger environmental footprint. Sweetened soft drinks are a good example: they use corn sweetener, and corn production has a large footprint because so much fertilizer is required. There is a growing epidemic of obesity and of childhood obesity in particular.
The New Scientist has a very thoughtful review of the evidence regarding the connection between sweetened soft drinks and obesity. The evidence is mixed, but favors the existence of a link — especially if you exclude studies financed by the food industry or by researchers with other close ties to the industry. So there’s some reason to think that New York’s recent ban on supersized soft drinks may reduce obesity. That would be good for the environment, and good for the health of the individuals involved. However, it’s not a slam dunk in terms of proof of causation.
What about personal liberty? It’s at least irksome for the government to tell us what size drink we can order, though I find it hard to believe that …
If cost-benefit analysis (CBA) is really part of the furniture, you wouldn’t think recently departed OIRA Administrator Cass Sunstein would need to dedicate a column to convincing us it’s so. But there it is, and though Sunstein is now but a private citizen like the rest of us, the claims merit a response.
We’re told “cost-benefit analysis has become part of the informal constitution of the U.S. regulatory state,” but that’s some odd constitution – not approved by any legislative body (and often, in fact, at odds with the dictates of the U.S. Congress), followed very selectively, and adjusted quickly at the whims of pressure from powerful industries. Billed as a non-ideological analytical tool, CBA today is in fact the opposite: questionable value judgments masked as technical calculations, all used as window-dressing to block rules that benefit the public but upset powerful …
The proposed Independent Agency Regulatory Analysis Act, S. 3468, is a troubling idea. As Rena Steinzor explained here when the bill was introduced, it would authorize the President to bring independent agencies under the purview of OIRA. This proposal is worrisome given the persistent flaws inherent in OIRA’s cost-benefit approach; extending the reach of a poorly functioning process is hard to justify. But even more problematic is where S. 3468 treads: the domain of independent agencies. This development calls for thoughtful attention to the reasons for independence in the first place.
The fundamental difference between executive and independent agencies lies in the degree to which each is insulated from presidential control. For example, executive agencies are typically headed by individuals who serve at the will of the President—but independent agencies are governed by multi-member commissions who are removable only for cause. While executive heads are …
Former President Bill Clinton, campaigning for President Obama in Florida on Tuesday, the 9/11 anniversary, offered a passionate defense of government employees, the AP noted. I was curious about the whole quote, so I watched and wrote it out (via C-SPAN, at 34:55):
On this day, of all days, we should know that there are good and noble people who work for the government. I remember when the Oklahoma City bombing occurred – which, before 9/11, was the biggest terrorist incident in the United States' history – and a man who had been on my Secret Service detail, had transferred there because he thought it'd be a great place to raise his children, and he was killed that day, along with other people.
And I had, like every politician, on occasion, gotten upset by some example of government waste or something the way we all …
Mitt Romney added a new twist Tuesday to false right-wing claims about the EPA’s regulation limiting mercury and other pollutants from coal power plants.
EPA estimated that the “utility MACT” will have annual monetized benefits of $37-90 billion and costs of $9.6 billion. A critique we’ve heard over and over again from the industry and its supporters goes something like this: “But only $6 million of those benefits come from reducing mercury pollution, the top target of the rule!” It’s sort of an odd critique, but it’s misleading anyway: the mercury numbers are so low because EPA simply didn’t monetize most of the mercury reduction benefits. Putting a dollar value on not poisoning kids with a neurotoxin is difficult or impossible, and the benefits of the rule far outweigh the costs already anyway.
Now here’s the twist. On Tuesday, the …
Reposted from RegBlog.
Traditionally, the field of law and economics has treated government regulation as if it were a mere transaction. This microeconomic approach to law assumes that government regulators should aim to make their decisions efficient by seeking to equate costs and benefits at the margin.
As I argue in a new book, The Economic Dynamics of Law, the microeconomic model of government regulation misconceives the essence of regulation. Government regulation produces not an instantaneous transaction, but a set of rules intended to influence future conduct, often for many years. Accordingly, regulation provides a framework for private resource allocation, rather than allocating the resources itself. This framework performs a macroeconomic role by reducing systemic risks that might permanently impair important economic, social, and natural systems. As such, government regulation resembles monetary policy, which likewise affects, but does not control, resource allocation. 
Properly understood, the relationship between …
A draft of the Republican party platform, posted by Politico on Friday afternoon, reveals that the party has incorporated some of the more absurd claims and proposals on regulations pushed by House Republicans and some more radical trade organizations.
The draft claims regulations cost $1.75 trillion each year – that’s from a discredited study sponsored by the Small Business Administration’s Office of Advocacy. It turned out that 70 percent of that figure came from a regression analysis based on opinion polling on perceived regulatory climate in different countries (and much of the rest of the number came from cherry-picking the highest available estimates). The SBA study was debunked by a CPR white paper, the non-partisan Congressional Research Service, and the Economic Policy Institute (twice).
The draft platform says: “Constructive regulation should be a helpful guide, not a punitive threat.” In other words, we suggest that …
Governor Romney claims that burdensome regulations are an immense but hidden tax holding back the American economy. As proof for this proposition, he cites the study on regulatory costs sponsored by the Small Business Administration – a study that’s been debunked by a CPR white paper, the Congressional Research Service, and others. Romney lays out some solutions to this supposed problem in Believe in America: Mitt Romney’s Plan for Jobs and Economic Growth, issued in September of last year. One of these ideas is to require affirmative congressional approval of all major rules.
People who drop by CPR’s website likely know that Republicans have already tried to pass legislation to this effect in the form of the Regulations from the Executive in Need of Scrutiny (REINS) Act. The bill passed the House in late 2011, but has gone nowhere in the Senate. Proponents of the …
The White House today announced the departure of Cass Sunstein, Administrator of the White House Office of Information and Regulatory Affairs. CPR President Rena Steinzor issued the following statement:
Cass Sunstein brought impressive credentials and a personal relationship with the President to his job as Administrator of the Office of Information and Regulatory Affairs. But in the final analysis, Sunstein has continued the Bush Administration’s tradition of using the office to block needed health and safety protections disliked by big business and political contributors. Worse, the narrative that Sunstein helped craft about the impact of regulations on American life — that regulatory safeguards are fundamentally suspect — was discordant with the rest of the President's agenda and the arguments he makes for his reelection.
Sunstein’s departure is an opportunity for the Administration to reset its regulatory policy and embrace public health and safety protections that have …
Talk about trying to fix the wrong problem: Senators Mark Warner, Rob Portman, and Susan Collins have introduced a bill today that seeks to move the rulemaking process further away from agency experts and transparency and more toward hidden corners of the White House, where well-heeled industries can buy access and push political operatives to block rules.
The bill at hand is the Independent Agency Regulatory Analysis Act. In a press release and accompanying fact sheet today, the senatorial trio – one conservative Democrat, one potential Republican VP nominee, and a once-moderate Republican who has changed her stripes – boast how the bill seeks to bring the “independent agencies” under the purview of the White House. Those agencies include the Securities and Exchange Commission (SEC) and the new Consumer Financial Protection Bureau, both of which have great potential to exasperate the big bankers and security brokers who bankroll elections …
