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Another Teachable Moment Squandered: Regulation's Role

Michael Lipsky

In talking to my friend Jim the other day, I found myself expressing dismay at President Obama's decision to cancel the Environmental Protection Agency's revision of the Federal smog standard. The decision has particular resonance because it comes during our critical national debate on the role of regulation in America.  The subject is sure to be refreshed tonight when the President shares with the nation his ideas on job creation.    

I pointed out to Jim that, overwhelmingly, analyses of the costs of regulation show net benefits to jobs and the economy, in addition to protecting the environment, improving health and saving lives.  Moreover, all new Federal regulations are subject to cost/benefit analyses, so that policy makers are virtually required to tailor proposed new regulations with an eye to both their effectiveness and impact on the economy.

Jim said he knew all that, but that "the average American" assumes that regulations are costly and interfere with job creation.  He maintained that the President, in considering the EPA action, could not be expected to put himself in a position which would be widely misunderstood and certainly not appreciated by the general public.

This is precisely the problem. The public is not hearing that regulations generally do not undercut job growth, and many in fact promote employment. Of course the general public will accept the pro-business line that regulations are job killers if people do not hear anything to the contrary.  The Democrats, and particularly the President, are not investing in explaining the origins of our regulatory system, the efficacy of existing regulations, or the relatively open process by which they are developed. 

If you doubt this assertion examine the White House website.  A search for recent communications about “regulation” reveals the White House endorsement of the business community’s critique.  One finds several blog posts by Office of Management and Budget official Cass Sunstein explaining the President’s efforts to find and eliminate unnecessary regulations.  One also finds an account of the President’s efforts to streamline regulation as part of his agenda to improve government accountability and transparency.  

Although advocacy groups representing consumers, and environmental and good government interests, have been trying to offer a more constructive message on regulation, they can hardly compete with the relentless and well-funded drumbeat against regulation orchestrated by the Chamber of Commerce and their allies in Congress.