All the Rules, None of the Benefits? Half a Story on Regulation

This morning, The Washington Post reported on a new study -- commissioned by the Manufacturers Alliance for Productivity and Innovation (MAPI) -- that finds federal regulations that impact the manufacturing sector on a perilous rise. Naturally, conservatives have been passing it around as further proof that, one, this President is the worst President ever and, two, faceless bureaucrats are deliberately holding back the economy.

It's not anything we haven't heard before. We know. Washington's red tape is a great vampire squid wrapped around the face of business big and small:

“The increasing number of regulations has harmed the manufacturing sector’s production,” the report said. All aspects of manufacturing “are impacted negatively by the myriad regulations.”

That negative impact must be grave indeed, given that the manufacturing sector just posted the strongest growth for any 29-month period since 1995.

Regardless, what are we to make of a study on regulation that doesn't fully address the reason why we have such rules in the first place -- or honestly weigh the benefits of these rules against the costs? Scratching the surface of the report itself, the very last bullet of the executive summary reads:

The analysis does not address the benefits of regulation included in regulatory analyses. These benefits are generally in willingness to pay measures for non-marketed goods such as air quality and safety that do not show up in the measures of national income such as GDP and disposable personal income.

So what about those benefits? The report relies on data from the OMB, the very agency that in March of this year released a draft of its annual report, entitled "On the Benefits and Costs of Federal Regulations," and gave us this graph:

Safety and air quality may not be "marketable," and readers of these pages should know our position on GDP, but it's hard to take away too much from a report that goes not much further than "Even libertarians such as Friedrich von Hayek accepted in principle a public sector role in curtailing clear market failures. . ." in incorporating the very real benefits of responsive and comprehensive regulation.