Megan McArdle on the Trump administration’s attempt to rein-in the regulation machine of the US federal government and its many, many agencies:
One of the first things Trump did as president was to sign an executive order requiring that two regulations be rolled back for every new one that was promulgated. As a longtime advocate of rolling back regulatory complexity, I found a lot to like in this rule. Unless strenuous effort is made to regularly prune them back, regulations have a tendency to blindly grow until they have wrapped the economy so tight that nothing can breathe, much less thrive. Trump’s executive order forces us to do some very necessary maintenance.
Unfortunately, it’s a rather crude instrument for the job. It’s possible that nothing more nuanced would actually work; nuance and flexibility, alas, give regulators quite a bit of discretion to put off an annoying chore. Just the same, we should recognize the dangers of cutting with such a dull knife.
In agencies that are dealing with a genuinely new and disruptive force — one for which innovators need regulatory clarity before they can bring a product to market — such a strict regulatory requirement faces them with an unpalatable dilemma. Every new regulation that is vitally necessary means finding two regulations that aren’t. But each of those dusty old rules was created for a reason. Some of those reasons were bad; in some cases the rule never worked as intended; and in others the rule later became obsolete. But that does not describe all of our regulations. And imagine the brutal publicity that will ensue if someone dies or gets hurt in an accident that could plausibly have been prevented by a rescinded rule.
An even larger problem is that the “two for one” rule doesn’t really tell us about the relative quality of the regulations involved. An agency could satisfy that executive order by issuing a terrible, stupid, costly regulation that forced power companies to rip out their windmills, as long as it repealed two sensible and necessary regulations that (for now) prevent factories from dumping toxic waste into our watersheds.
Reducing regulatory complexity is an important goal, but it cannot be our only goal. We ought to strive for less regulation, yes, but also for good regulation, and for regulation that gives companies enough clarity to innovate and build their businesses. Unfortunately, while the Trump administration has proven enthusiastic about the first goal, we’ve seen much less talk about the others. And given how long it has taken for Trump to staff all the agencies he oversees, we haven’t really had the personnel to deliver on things like better regulation, even if doing so were the Trump administration’s main priority.
