by Richard Belzer

in Regulatory Policy, People & Institutions

The White House announced on January 8 that President Bush has renominated Susan Dudley as administrator of OMB's Office of Information and Regulatory Affairs. Her nomination is included in a list of 69 nominations for Senate-confirmed government positions.

6 Jan 2007

The Unintended Consequences of Regulation
An end to the Senate's "candy desk"?

by Richard Belzer

in Legislation, People & Institutions

In the Wall Street Journal's A-hed column, Sarah Lueck reports on the possible demise of the Senate's "candy desk." The story, interesting in its own right, has lessons for regulatory policy, the incentive effects of zero prices, and understanding... More...

5 Jan 2007

Rules for the 110th Congress
H. Res 6

by Richard Belzer

in Legislation, People & Institutions

Conventionally, federal regulation is understood as an action taken by an Executive branch agency (or an independent commission, such as the FCC, SEC, or FERC). This view misses the rich body of regulation enacted directly by Congress. Sometimes, Congress regulates itself. At the beginning of every two-year session, each house establishes the rules that will govern its activities and the behavior of its members.

Yesterday, the House of Representatives enacted rules for the 110th Congress. For convenience of our readers, we print these rules below. We will follow up later with analyses of regulatory content. For now, we offer the following observations:

• Congress as an institution knows how to write regulations. These rules are sufficiently complex to disprove the myth that Congress needs to delegate regulatory details to Executive branch agencies because it lacks facility with complicated ideas and concepts. What distinguishes legislation from the House rules is that the former are negotiated compromises for which textual ambiguity is necessary for passage. The latter are not.
• The rules have loopholes. In many cases, the rules state strong prohibitions combined with significant exceptions, some of which are textually ambiguous.
• Individual Members will need lawyers to guide their daily actions. Title II establishes new ethics rules, and these rules are the epitome of regulatory complexity. Like business entities regulated by the Executive branch, Members will be able to legitimately claim that the rules are so complex that they do not understand them. Also like business entities, they will have to hire attorneys to master the new rules, identify the loopholes, and present to their principals options for exploiting them.

20 Dec 2006

"The Blog Mob"

by Richard Belzer

in People & Institutions

Wall Street Journal assistant editorial features editor Joseph Rago today publishes a dissent on blogs. He says blogs display many of the same faults of newspaper reporting plus a few new ones. Rago's opinion column is worth reading, and may be somewhat ironic because the Journal hosts one of the most widely read daily contributions to the blogosphere.

We use the occasion of Rago's column to reiterate what Neutral Source is about, and suggest how we are different from most blogs.

13 Nov 2006

The Market Failure in Men's Business Suits:
A note on the threshold for regulation

by Richard Belzer

in Regulatory Economics, Regulatory Policy, People & Institutions

In our recent multi-part series on Susan Dudley, whose nomination to be the next Administrator of OMB's Office of Information and Regulatory Affairs comes up today, we offered a few comments on the meaning of market failure.

Executive order 12866, the presidential directive Dudley would be responsible for enforcing, says that market failure must be "significant." Dudley and her critics differ concerning how much market imperfection qualifies as "significant." Of the 19 public interest comments she authored or co-authored on specific proposed regulations, she said the agency had failed to meet this test of significance in 10 cases. Her critics appear to believe (but do not say directly) that the agencies satisfied the significance test in these 11 cases. Whereas Dudley accepts the market failure justification for regulation in some cases, her critics appear to accept it in all cases.

Dudley and her critics also disagree concerning whether regulation is always the best approach for remedying a market failure deemed to be "significant." In her Primer on Regulation Dudley wrote: "Government should only impose regulations in the case of a clear market failure that cannot be adequately addressed by other means" (pp. 38-39)." The other means she has in mind include clearer assignment of property rights. Her critics say regulation should be the first public policy choice.

The weekend edition of the Wall Street Journal included a long article on men's business suits. Their research showed the existence of a market failure. Did they find a "significant" market failure"? If so, will the market correct itself or must government intervene to correct it?

8 Nov 2006

Susan Dudley, Part 8
Summing Up

Susan Dudley, Part 5
Dudley's "Impossible Requirements"

by Richard Belzer

in Regulatory Policy, People & Institutions

On Monday we began a multi-part series on Susan Dudley, the Bush administration's nominee to head OMB's Office of Information and Regulatory Affairs. Her confirmation hearing is scheduled for November 13. A campaign is being led by Public Citizen and OMB Watch to scuttle her confirmation. Our series analyzes the merits of their opposition report. Tuesday's installment provided background on Public Citizen and OMB Watch, the activist organizations who authored the report. Wednesday we posted a discussion of the three dominant themes in the introduction to the Opposition Report. Thursday provided an analysis of the airbag case, which figures prominently in the Opposition Report.

Today we examine a section in the Report titled "Dudley's Impossible Requirements." The authors say that if confirmed Dudley would impose analytic burdens on regulatory agencies that they could never satisfy, the practical effect of which would be to paralyze federal regulation..

2 Nov 2006

Susan Dudley, Part 4
The case of airbags

by Richard Belzer

in Regulatory Policy, People & Institutions

On Monday we began a multi-part series on Susan Dudley, the Bush administration's nominee to head OMB's Office of Information and Regulatory Affairs. Her confirmation hearing is scheduled for November 13. A campaign is being led by Public Citizen and OMB Watch to scuttle her confirmation. Our series analyzes the merits of their opposition report. Tuesday's installment provided background on Public Citizen and OMB Watch, the activist organizations who authored the report. Wednesday we posted a discussion of the three dominant themes in the introduction to the Opposition Report.

Today we provide an analysis of the airbag case. In 1998 Dudley submitted a public interest comment on the National Highway Traffic Safety Administration's proposed advanced airbag rule. Although it was just one of 33 such public interest comments, the Opposition Report say this document "epitomizes all the reasons that Susan Dudley is unfit to be given power over regulatory policy" (p. 7).

1 Nov 2006

Susan Dudley, Part 3
An introduction to the Opposition Report>

by Richard Belzer

in Regulatory Policy, People & Institutions

On Monday we began a multi-part series on Susan Dudley, the Bush administration's nominee to head OMB's Office of Information and Regulatory Affairs. Her confirmation hearing is scheduled for November 13. A campaign is being led by Public Citizen and OMB Watch to scuttle her confirmation. Our series analyzes the merits of the opposition report. Tuesday's installment provided background on Public Citizen and OMB Watch, the activist organizations who authored the report.

Today we provide an analysis of the introduction to the Report. Because the introduction is essentially an executive summary, we limit our review to a synthesis of what the document alleges and whether its allegations are supported by potentially credible evidence. If an allegation is raised and discussed extensively elsewhere in the report, we postpone our review of that issue until we address the relevant section.