Too Many Laws

For some people “there aught to be a law”  is the visceral response to nearly every problem; these are the same folks who think that whenever things go unexpectedly wrong it should be possible to sue somebody for damages. The unspoken and presumably unconscious premise held by such people is that we are all children and that we need the government to shelter us.

Laws should set the enforced outer limits of allowed behavior; a shared sense of civic duty should set the inner limits of socially acceptable behavior. We make trouble when we use laws to try to set the inner limits without the consensus that is possible around the outer limits.

To the extent that laws are clear and represent limits on behavior that have an overwhelming level of support in society – like the laws against rape, murder and theft – the administration of justice represents one of the vital functions of government. But where laws do not command a true consensus of support among citizens, are inherently vague or incomprehensible, or are arbitrarily enforced, they unduly limit our freedoms and greatly diminish respect for the law itself.

The absence of a consensus of public support for any law raises important questions about its legitimacy. Legislators should fear to tread on ground where public support is less than overwhelming, because in such cases a slight majority is using the power of the state to impose its will on everybody else – surely the antithesis of a free society.

Two examples: under Roe v Wade, early stage abortion may not be outlawed; but even if it could be, doing so would represent the forceful imposition on about half the population of a law that they fiercely oppose: whether or not I think that abortion is ethically troubling (and I do), I believe that to outlaw it, when half the population vehemently disagrees, would be an improper use of governmental power. Similarly, Obamacare (which has commanded the support of slightly less than half the population since before its enactment) reorders roughly 18% of GDP on a basis that a majority of polled citizens opposed at the time, and opposes still. If on such issues an adversely affected individual feels that a law is both wrong and not reflective of a true consensus, how much respect will he have for the law? Only the respect born of fear.

The enforcement mechanism for every law is ultimately a police officer; do we want a cop in the doctor’s office enforcing laws that half the population hates? And behind the police officer there is a prosecutor, who has all the resources of the government to bring to bear on whatever prosecution he or she chooses to bring, and little to no downside to bringing a politically popular but abusive prosecution, or one that the general public doesn’t even notice.

In addition to laws that do not represent the consensus views of the citizenry, we have many laws that are hopelessly vague or confusing.

The story is told that in the Southern District of New York, the lawyers in the Federal Attorney’s office have a little game: one will pick the name of some paragon – Mother Theresa and Nelson Mandela are said to have been examples – and the prosecutors figure out the grounds on which they could indict and easily convict her or him.

An amusing game, no doubt; but also a scary one. It illustrates the extent to which our nation’s laws have become an incomprehensible net that can be used to catch any fish. So you had better hope that the fisherman has really good judgment.

Many laws are intentionally vague. Congress may want to evade responsibility for tough decisions by passing the detailed wording and interpretation work on to regulatory agencies that get to fill in the blanks on what constitutes, for example: fraud, or pollution, or an endangered species. Or they may wish to hand almost limitless powers to prosecutors to, say, go after the mob, and do so by writing laws like RICO that can be – and are – used to bludgeon almost any defendant, innocent or guilty.

And finally, the enforcement of many laws is overtly arbitrary. When the speed limit is 55, but everybody is driving 75, what is the law? Whatever the officer decides; and if he needs to write more tickets to fill his quota, tough luck for you.

Laws that seem flat out wrong to half the country, the sheer volume of laws that surround us, their complexity, their vagueness and their arbitrary enforcement all cause people to lose respect for the system. When there are too many laws, laws lose their status as a proxy for the thick black line between right and wrong. Instead, they look like somebody else’s idea of where the inner limits line of socially acceptable behavior is drawn, and as we all know, that line is subject to sharply varying opinions as to appropriateness and enforceability. Some of the sense that we live in a civil society is lost as well, because we start to see life as a game, where the guy who wins is the one who gets away with the most.

 

Regulations Aren’t Free (originally posted in spring, 2013)

Political activists, journalists and legislators often seem to labor under the illusion that the Congressional Budget Office’s scoring of a piece of legislation is the last word on its expected costs. This is wrong both because such scoring is regularly “gamed” to produce the desired result (see, for example, the CBO’s estimate of Obamacare’s ten year cost as $940 billion at the time of its enactment by one vote, re-scored a year later to $1.93 trillion) and because the CBO scoring looks only to the effect of legislation on the US budget – it is silent on the costs the proposed legislation and its associated regulations will impose on all of us.

Before focusing on regulatory costs, though, let’s start by taking a moment to consider why I will use the term “regulations” rather than “laws” in this post. Nowadays, laws are rarely simple rules written by Congress and signed by the President. Congress almost never enacts laws that require no administrative regulatory interpretation.

Instead, it typically enacts laws embodying high-minded goals – like protecting endangered species or clean air –with vague wording, and leaves it to the regulators to determine exactly what their words mean in practical terms – and those regulations may run to hundreds or thousands of pages of words that must in turn be interpreted by lawyers on behalf of businesses all over the country.

This style of lawmaking enables Members to stand boldly for universally laudable goals while leaving the complicated work of writing the relevant regulations to bureaucrats. This way, when enforcement turns out to be unpopular, Members of Congress can wash their hands of responsibility, claiming that the EPA or FDA or other agency is over-reaching its statutory authority.

But since the regulations promulgated by bureaucrats under the broad authority of such statutes have the full force of the law, to citizens the associated regulations are indistinguishable from the underlying statutes. So we must consider the full reach – and cost – of complicated laws by considering their associated regulations.

All regulations, even those that nominally have no effect on the US budget, cost money. Often, really a lot of money. The paperwork costs of just understanding the ever-growing mountain of regulations are hugely significant for businesses, even without considering the regulations’ substance. And the substance will generally impose both expected and unexpected burdens on everybody. If you have wondered what is gumming up America’s economy, new regulations and taxes are your answer.

Those who crusade to impose some new law or regulation to address a specific problem rarely pause to consider that the proposed regulation’s costs will probably be bourn most heavily by the poor. Regulations make everything more expensive – the only question is by how much each one will do so. The answer will depend on the severity and complexity of the regulation. And insofar as regulations make everything more expensive, they burden the poor more than others.

In a sense, then, regulatory costs act as a regressive tax. Small increases in price in, say, gasoline stemming from regulations restricting the erection of refineries and the inclusion of ethanol in gasoline (a sop to corn farmers) will make a much bigger difference to the poor than to the rich. Same for food regulations, and regulations regarding every other necessity. This phenomenon comes into particularly sharp focus when we consider the effects of zoning – which drives up housing prices and quite intentionally excludes the poor from certain neighborhoods.

Perhaps before launching into more examples of unintentionally expensive regulations, I should mention that we live on a planet where prices are determined by the point where supply and demand meet. Decrease supply and prices will rise. Increase prices and demand will fall. Increase supply and prices will fall. There are only three variables, and they work together endlessly. Simple, I know; but an amazing number of people want to ignore how prices work, at least when it comes to justifying their desired outcomes.

A few more examples of regulations that increase prices, hurting all, but particularly the poor:

Minimum wage laws mean that there are fewer entry-level jobs, and that product prices are higher than they would otherwise be, but they are avidly supported by unions, whose employees make far more than minimum wage, because the unions don’t want low cost competition; the poor be damned.

In many respects, Obamacare is the ultimate example of legislation that imposed astronomic regulatory costs that were not seriously considered at the time the law was enacted. All across the land, businesses and individuals are now toting up their prospective costs of compliance when the law is fully implemented next year – and they are staggering. Many employers are laying people off (or making employees switch to part time status) to avoid having the minimum number of employees that forces them to provide coverage or pay penalties. Larger companies are talking about dropping health care coverage and paying the penalties rather than meeting the costs of providing the new mandated coverage. Employees are losing insurance coverage and facing penalties if they don’t buy expensive policies, while wondering how to pay for their next doctor’s visit.

President Obama’s claim that “If you like your healthcare, you can keep it.” has proven to be utterly false, but there’s no retracting the votes made on the basis of such promises. Who do you think will be most harmed by these uncertainties? Hint: it will not be the well off.

Environmental regulation is particularly interesting from the perspective of conflicting interests that are generally not weighed in the balance when regulations are imposed. First of all, as mentioned in Too Many Laws, nobody wants to drink dirty water or breathe dirty air, so I would certainly not want to be seen as implying that all such regulations are a bad idea.  But when endangered adorable creatures were highlighted to promote the proposed Endangered Species Act, few considered that in practice the law would mean that the presence of snail darters or rodents whose tiny genetic variations might be rare would doom projects all over the country, or that the costs of complying with the Endangered Species Act would add enormously to the time and cost of virtually all infrastructure projects.

I have heard it said that really big projects – like building the Hoover Dam, or erecting new nuclear power plants or oil refineries – simply cannot be done today in the USA. Which is all well and good, I suppose, if you don’t need a job or care what power costs; for the rest of us, though, and particularly for the poor who want work, it is a matter of real concern. Again, my broader point is that we should consider the tradeoffs involved with such decisions, rather than let bureaucrats make the decisions based on some vaguely defined national policy goal, which is our current mode.

There are really three kinds of costs to new regulations: the first is the one that the CBO quantifies so poorly, and is generally the only one considered. The second, which I have been focusing on in this post, is the financial cost of compliance. The third is the most subtle, but no less important for that: every new law and regulation makes each of us a little less free by further restricting what we may legally do.

We live under a mountain of regulation, and its weight is a burden that we all feel, but few consider.

2 comments to Too Many Laws

  • The Raging Scotsman  says:

    I find your writing, ergo, your thinking, to be clarifying and edifying. I am subscribing to your blog for the simple reason that you write very well on the state of the nation via-a-vis law and politics, so it will be interesting to see what you have to say on other subjects. I plan to read ‘Our Mandarins’ next, expecting it to be right in line with my thinking about powerful people. Keep up the good work!

    I salute you, Sir.

    Best,

    The Raging Scotsman

    • M Johnston  says:

      Well, thanks. It’s fun to think this stuff through for its own sake, but even better when I don’t feel like I’m howling into the wind.

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