Good Rules: Ten Stories Of Successful Regulation

Good Rules: Ten Stories Of Successful Regulation

February 7, 2011
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In the school of brutally hard knocks, America has relearned something about the business world: it needs rules. When we let corporate and financial insiders decide large questions of right and wrong for themselves, we invite trouble. The most devastating financial crisis since the Great Depression, the biggest mining disaster in four decades, and the worst undersea oil leak (and one of the worst environmental tragedies) ever have driven that point home.

This report documents another under-appreciated lesson of our national experience — that good rules and effective enforcement are within our power to achieve. It may be hard to look past the cascade of calamities; but if we make the effort (and turn down the volume knob on the cynical voices telling us to expect no better), a more hopeful story comes into view. That story is one of daunting health, safety, and environmental problems overcome or eased by acts of federal, state, and local rule-making; of measures that have saved lives, prevented sickness, empowered workers and consumers, spurred innovation, and advanced the common good.

Here's an overview of the ten rules and regulations studied in-depth in this report:

1. BUILDING CODES AND CONFLAGRATIONS:

It wasn’t just Chicago; New York, Philadelphia, Charleston, St. Louis, Boston, Seattle, and Atlanta had downtown-destroying fires too. Then, one by one, America’s cities faced up to the need for serious rules of safe construction.
 

2. THE AMERICANS WITH DISABILITIES ACT:

Twenty years after its enactment, America’s streets, theaters, restaurants, and workplaces are far friendlier to people with disabilities. It might not have happened without the partnership of a famously liberal Democrat and a staunchly conservative Republican.
 

3. CAR SAFETY:

Americans drive three times as much as they did when auto safety regulation began. Yet even the absolute number of fatalities has fallen – from 54,000 in 1972 to under 34,000 in 2009. Taking distance into account, the progress is even more remarkable - from 4.2 deaths per million miles in 1972 to about 1.16 deaths per million miles today.
 

4. BANNING DDT:

Until Rachel Carson blew the whistle, chemical and agribusiness companies could spray almost anything they pleased onto America’s food and farmland. One favorite pesticide of the 1950s and ‘60s, dichlorodiphenyltrichloroethane, was decimating bird and fish populations as well as a host of small flying and crawling creatures.
 

5. THE FAIR LABOR STANDARDS ACT:

In one law, the U.S. banned child labor, established a minimum wage, and made the 40-hour week a national standard.
 

6. “DO NOT CALL.”

Regulation is often stereotyped as rigid and cumbersome. Here, Congress and the Federal Communications Commission developed a light-touch answer to the problem of aggressive telemarketing.
 

7. CIGARETTE SMOKING:

Stymied in Washington, antismoking forces shifted their efforts to the state and local level. Today, thanks to higher taxes and smokefree zones (starting with public buildings, ending with restaurants and bars), just a fifth of all high school seniors smoke, down from a third in the mid-1990s.
 

8. THE COMMUNITY REINVESTMENT ACT:

After sweeping civil rights and fair lending laws failed to address the problem of “redlining,” congressional leaders devised a way to use disclosure to prod lenders into a process of self-examination and reform.
 

9. ACID RAIN:

In 1966, a graduate student dreamed up a new approach to the problem of “externalities” – the costs that industries offload onto society. Why not develop a system of permits, and let companies buy and sell the right to pollute? Three decades later, when Congress finally gave the idea a try, results came quicker and less expensively than almost anyone expected.
 

10. DRUG PRE-TESTING:

Thalidomide caused an estimated 12,000 birth deformities. Isoproterenol inhalers led to the deaths of 3,500 asthmatic children. Aminorex, an appetite suppressant, caused pulmonary hypertension and more than two dozen fatalities. In each case, other countries suffered while America was largely spared, through the diligence of the Food and Drug Administration.