Jon Leibowitz talks a lot and says nothing:
President Obama deserves enormous credit for ensuring regulatory review throughout the federal government, including at independent agencies. Although regulations are critically important for protecting consumers, they need to be reviewed on a regular basis to ensure that they are up-to-date, effective, and not overly burdensome. For all agencies – independent or not – periodic reviews of your rules is just good government. The announcement raises the profile of this issue, and I think that’s a constructive step.
The Federal Trade Commission boss refers here to a cosmetic “review” of government regulations nominally ordered by the White House earlier this year. Technically this doesn’t apply to the FTC — which as an “independent agency” holds a Vatican-like status outside the purview of normal government oversight — but Leibowitz wants to be a good sport and go along with Obama’s public relations effort.
Gary Galles noted just last week that the Obama reforms were mere window dressing:
The intent was to defuse attacks on Obama’s regulatory abuses by claiming the reform mantle. But an “intense review” of burdensome regulations that only turned up hundreds of millions of dollars in savings, from an annual regulatory burden of over 1 trillion dollars, could not really be intense, especially when the waste and abuse discovered were obvious and longstanding.
Consider the milk reform. Sunstein wrote, “Since the 1970s, milk has been defined as an ‘oil’ and subject to costly rules designed to prevent oil spills.” But the EPA has now concluded the burdens were unjustifiable, and given dairies an exemption saving them $140 million a year. Unfortunately, rather than demonstrating that Americans no longer need worry about abusive regulations, it illustrates the opposite.
The fact that a clearly nonsensical and costly policy persisted for decades, despite multiple “reforms,” reveals that almost no attention is actually given to outdated and overly burdensome regulations. But when public outrage becomes severe, a few idiocies must be recognized and sacrificed to pretend regulatory responsibility. Once such a minimal reform diminishes outrage, Americans will again stop paying much attention to the regulatory bureaucracy, and the constraints on abusive regulations will once again shrivel. And thanks to Obama’s regulatory expansions, abuses then will apply to more of our lives than ever.
Also revealing is that during this unjustified regulation hunt, the EPA issued extraordinarily costly new rules requiring US coal-fired power plants to further reduce their emissions of mercury and other air pollutants, finding the costs justified in lives saved and medical benefits. But the benefit claims were bogus.
Similarly, Leibowitz and his colleagues are using the White House’s cover to make it look like they actually care about the burden his agency imposes on American citizens:
In testimony to the House Committee on Energy and Commerce Subcommittee on Oversight and Investigations, Chairman Jon Leibowitz and Commissioner William E. Kovacic said that since 1992, the FTC has had a systematic and rigorous process in place to review its rules “to ensure that they enhance consumer welfare without imposing undue burdens on business.” As a result of that program, “the Commission has rescinded 37 rules and guides and updated dozens of others since the early 1990s.”
“The Commission will continue to strive to improve techniques for measuring the effectiveness of all aspects of its operations,” said Commissioner Kovacic.
Let’s start with the “37 rules and guides” that the FTC has rescinded. These are basically industry-specific regulations, including, in no particular order: mirrors, luggage, dog and cat food, deceptive use of the word “free” in connection with photographic film and film processing services, beauty and barber equipment, law books, proprietary vocational and home study schools, and my personal favorite, fallout shelters.
Most industry-specific rules are created by the FTC on orders from Congress. Others are Commission initiatives. The problem is that for every rule or guide you eliminate, the FTC will create more. There’s no restriction on the actual power to create regulations, and that’s the core problem.
These formal regulations are also a drop in the bucket compared to the uncodified, often unwritten mandates the FTC imposes through its own Star Chamber process. When the FTC invents a new theory of antitrust liability, it doesn’t have to write a regulation. It can simply sue a company, force them to sign a one-sided settlement, and then use that “precedent” to bludgeon other companies in the same industry into adhering to identical terms. Since the FTC’s mandate is to identify and ban all “unfair competition,” there’s effectively no limit to the agency’s regulatory power. Streamlining a few forms and taking some outdated written rules off the books doesn’t alter that.