regulation

A New Economy from Old Roots?

Dave Johnson — Wed, 30 Sep 2009 16:11:44 -0700

How do we build a new economy out of the collapse of the old economy? How do we start fresh to begin creating jobs again, while building in economic and environmental sustainability, as well as workplaces that respect human needs and rights? How do we change things so that we all get to share the benefits of the economy rather than just contributing to the increasing wealth of a few vastly wealthy people?

While we look for a vision for a new economy, we should examine what has worked in the past. America had periods in which regular people enjoyed sustained increases in their standard of living. For a long time it was a conventional wisdom that each American generation would do better than the previous generation, more people would receive good educations, medical care would get better, the middle class would grow, leisure time would increase, poverty rates would decrease, retirement would be easier, etc.

But this pattern stopped. Beginning in the late 1970s and especially in the 1980s incomes began to stagnate, wealth increasingly concentrated at the top, working hours and workplace pressures steadily increased, availability of good health care started to decrease, etc. The standard of living of most Americans began to and continues to decline. At the same time corporations became more predatory as consumer protections vanished. Meanwhile outsourcing, deunionization and other anti-worker policies led to increasingly unpleasant, stressful and unrewarding worklives for more and more people.

Many of today's problems are traceable directly to the policy results of anti-government propaganda that was blasted out from well-funded conservative think tanks starting in the 1970s. The anti-government campaign led to defunding of many national, state and local government programs that improved education, helped the poor or enriched people's lives. We suffered deregulation in many areas where the government had protected consumers, workers, investors and the environment. Huge reductions in taxes for the wealthy were either offset by tax increases for the rest of us or government borrowing. And that borrowing has led to increasing problems of paying the interest and threats to funding even basic programs like Social Security and education.

So what worked, before the conservatives trashed the place?

Regulation

One thing we know for sure now, learned the hardest way thanks to the financial crisis: regulation worked. Regulation was necessary, it worked, it kept firms from taking risks that could bring down the economy. And we can also see now how regulations protected consumers from predatory corporate activities, workers from wage theft or unsafe working conditions, and the environment from exploitation and destruction.

Taxes

Before Reagan the tax rates at the top were very high. After you reached - and took home - a certain very high income you paid a high percentage of the rest in taxes. This had many beneficial results – even for the people who paid higher taxes. Government could afford to keep the physical, education and legal infrastructure in good condition without borrowing. Government could afford to invest in programs that improved our standard of living, health, knowledge and technology, which helped businesses grow. Businesses thrived in such well-watered soil.

The high tax rates also kept the bad side of human nature in check. When it took years to build up a fortune businesspeople had to rely on the health of the greater community to nurture their own wealth-building enterprises and keep them thriving over a long period. They had to think and act long-term. The roads needed to be kept in repair, the schools needed to provide excellent education to potential employees, the courts needed to be functional to enforce contracts, and they wanted the communities they were going to have to stay in to be pleasant places to live.

But once taxes were lowered vast windfalls could be realized from a single event and it made more sense to try to fleece the community with quick-buck schemes than to rely on it. We began to see corporate raiders break up solid, ongoing companies, steal pension funds, etc., while encouraging communities to cut spending on schools, roads, etc. It became more profitable sell off or outsource our manufacturing capacity. And then, as things fell apart, the few who benefited could just fly away in their private jets or sail away in their huge yachts. The greater community was no longer any use to them except as crops to be harvested. Vulnerable consumers are the only crop that is coming up in this economy.

Big Government

Government is We, the People making the decisions. "Big government" is simply another way of saying that more of the important decisions are made by the people. Shrinking government means handing the decisions over to big corporations. In the real world this is the choice. And in the real world big corporations make decisions that benefit them, and only them. Before you badmouth government think carefully about what the alternative is.

Old-Fashioned Government Planning

As I said in a post here a few months ago,

The phrase “industrial policy” sounds so Walter Mondale, 1970s, smokestacks and brick factory old-fashioned. I suspect the subject turns people off, eyes glaze over, hands reach under the table for iPhones and Blackberries…

But here we are without an industrial policy. How’s that working out for us? Every other country has one. China seriously has one. We instead have huge trade deficits. We don't make things here so we have to borrow money to buy things made elsewhere.

To add insult to injury, recently Deutsche Bank released a research note advising investors that the U.S. was not a good investment because of our lack of a government industrial policy. See Deutsche Bank: Absence of US Clean Energy Policy Will Send Global Capital Elsewhere.

While we envision a new direction for our economy, maybe we should also be looking at returning to a few old-fashioned ways of doing things, too.

Regulation Showdown

Batocchio — Mon, 24 Nov 2008 13:51:45 -0800

The Bush administration continues to try to strip as many safety and oversight regulations as it can on the way out the door. It's encouraging that these moves are getting more media attention, but it'd be nice if more mainstream outlets really pressed the question – how do any of these actions serve the public good? Perhaps Bush, or at least Dana Perino, can explain how these moves are a positive addition to the Bush legacy.

The Rules Game

It's harder to overturn changes after they've been put into effect as law, hence the rush by the Bush administration. Its calculations about the deadline, though, may be wildly off. As The Politico (via Cernig) outlines:

Last May, White House chief of staff Joshua Bolten instructed federal agency heads to make sure any new regulations were finalized by Nov. 1. The memo didn’t spell it out, but the thinking behind the directive was obvious. As Myron Ebell of the conservative Competitive Enterprise Institute put it: “We’re not going to make the same mistakes the Clinton administration did.”

President Bill Clinton finalized regulations within 60 days of the 2001 inauguration, meaning Bush could come in and easily reverse them.

It could take Obama years to undo climate rules finalized more than 60 days before he takes office — the advantage the White House sought by getting them done by Nov. 1. But that strategy doesn’t account for the Congressional Review Act of 1996.

The law contains a clause determining that any regulation finalized within 60 legislative days of congressional adjournment is considered to have been legally finalized on the 15th legislative day of the new Congress, likely sometime in February. Congress then has 60 days to review it and reverse it with a joint resolution that can’t be filibustered in the Senate.

In other words, any regulation finalized in the last half-year of the Bush administration could be wiped out with a simple party-line vote in the Democrat-controlled Congress.

The Congressional Review Act has gotten some coverage from Rachel Maddow and others. Of course, Congress must actually exercise this oversight for the law to be any good.

Meanwhile, the Bush administration is pushing on regardless, and can speed its process by judging changes "insignificant." As Jim Tankersley reported for the Los Angeles Times on Friday, 11/21/08 (emphasis added):

"The Bush administration is trying to prevent Obama from doing to it what it did to Clinton," said Matt Madia, a regulatory policy analyst for OMB Watch, a Washington-based watchdog group.

Under federal rules, it takes 60 days to enact an economically "significant" regulation, which carries an estimated impact of $100 million or more. Other regulations take 30 days. Today is the deadline for "significant" regulation, though [White House spokesman Tony] Fratto calls it "irrelevant to our process."

The process moved especially quickly in the case of oil shale. In July, the administration proposed rules that would eventually lead to leasing 2 million acres of public land in Colorado, Utah and Wyoming for oil shale extraction, even though serious questions remain about how much power and water -- a particularly scarce resource on much of that land -- would be needed to make it work.

The rules were finalized this week.

The Bush push leaves the incoming Obama administration and Congress with a number of decisions, not only on the rules themselves but how to address them procedurally.

Endangered Species

The Bush administration is attempting a major change to the Endangered Species Act by eliminating interagency input and ignoring climate change. While several outlets have covered this, The Washington Post's article by Juliet Eilperin gives the best rule-making detail that I've seen:

The Bush administration is finalizing changes to the Endangered Species Act that would ensure that federal agencies would not have to take global warming into account when assessing risks to imperiled plants and animals…

The main purpose of the new regulations, which were first unveiled in August, is to eliminate a long-standing provision of the Endangered Species Act that requires an independent scientific review by either the U.S. Fish and Wildlife Service or the National Oceanic and Atmospheric Administration of any federal project that could affect a protected species. Under the administration's proposal, individual agencies could decide on their own whether a project would harm an imperiled species.

The latest version of the rule goes further than the language Interior Secretary Dirk Kempthorne issued in August by explicitly excluding climate change from the factors that would trigger an interagency consultation. The move is significant because the administration has listed polar bears as a threatened species under the act on the grounds that their sea-ice habitat is shrinking, but Kempthorne has repeatedly argued that this move should not trigger a federal curb on greenhouse gas emissions linked to the melting of sea ice.

The Bush administration's preferred stance seems to be that polar bears may be endangered, but it's impossible to say why or to address the cause of their endangerment.

The public commenting period on this measure was also odd. As the AP reports:

When the proposal was first announced in August, the public was given 30 days to comment. That period was doubled after Democratic lawmakers pressed for more time.

Then, last month, the head of the endangered species program corralled 15 experts in Washington to sort through 200,000 comments in 32 hours.

"This is definitely lightning quick," said John Kostyack, executive director of the National Wildlife Federation's Wildlife Conservation and Global Warming initiative. "I would be surprised that they spent all this time rushing it through if it wasn't greased."

And remember the different deadlines for "significant" versus "insignificant" rule changes? Dan Froomkin sharply picks up on this passage from the Eilperin piece:

Interior Department spokeswoman Tina Kreisher said the administration is close to issuing a final rule but is still reviewing the language for potential changes. Interior has classified the proposal as "a minor rule," which means the government has determined that it would not have a major economic impact. It will take effect 30 days after being published in the Federal Register.

Clean Air

We've previously covered the most significant Bush changes to the Clean Air Act, a redefinition of pollution limits by an hourly versus yearly rate so that, per McClatchy, "[power] plants could run for more hours and increase overall emissions without exceeding the threshold that would require additional pollution controls."

I wanted to highlight one section of that earlier post, though. In the case of the Endangered Species Act, the public commenting seems to have received cursory consideration at best. However, even that level of review was better than that for the EPA's power plant changes:

The EPA official said that concerns in the agency were that the analysis justifying the rule change was weak and the administration didn't plan to make the analysis public for a comment period, as is customary...

The EPA is under no obligation to reveal internal deliberations, so in many cases the public never knows what objections may have been raised.

The White House wouldn't comment on its views about changing the rule, Kristen Hellmer, a spokeswoman for the White House's Council on Environmental Quality, said Monday.

It's worth noting as well that EPA officials and many career employees at other regulatory agencies are unhappy about both the Bush administration's proposed changes and their procedures for implementing them.

Reproductive Rights

Obama is expect to drop the "global gag rule":

…barring international family planning groups that receive U.S. aid from counseling women about the availability of abortion, even in countries where the procedure is legal, said Cecile Richards, the president of Planned Parenthood Federation of America. When Bill Clinton took office in 1993, he rescinded the Reagan-era regulation, known as the Mexico City policy, but Bush reimposed it.

The Bush administration may be unable to stop that, but is attempting changes on the domestic front, as The New York Times reports:

A last-minute Bush administration plan to grant sweeping new protections to health care providers who oppose abortion and other procedures on religious or moral grounds has provoked a torrent of objections, including a strenuous protest from the government agency that enforces job discrimination laws.

The proposed rule would prohibit recipients of federal money from discriminating against doctors, nurses and other health care workers who refuse to perform or to assist in the performance of abortions or sterilization procedures because of their “religious beliefs or moral convictions.”

It would also prevent hospitals, clinics, doctors’ offices and drugstores from requiring employees with religious or moral objections to “assist in the performance of any part of a health service program or research activity” financed by the Department of Health and Human Services.

As seems to be the trend, these changes are not welcomed by career officials:

But three officials from the Equal Employment Opportunity Commission, including its legal counsel, whom President Bush appointed, said the proposal would overturn 40 years of civil rights law prohibiting job discrimination based on religion.

The counsel, Reed L. Russell, and two Democratic members of the commission, Stuart J. Ishimaru and Christine M. Griffin, also said that the rule was unnecessary for the protection of employees and potentially confusing to employers.

Title VII of the Civil Rights Act of 1964 already prohibits employment discrimination based on religion, Mr. Russell said, and the courts have defined “religion” broadly to include “moral or ethical beliefs as to what is right and wrong, which are sincerely held with the strength of traditional religious views.”

As John Amato notes, Hillary Clinton and Patty Murray (D-WA) have introduced legislation in the Senate to block this Bush change, and in the House, Diana DeGette (D-CO) and Louise Slaughter (D-NY) have done the same. From the Clinton-Murray press release:

In the final days of his administration, the President is again putting ideology first and attempting to roll back health care protections for women and families. The fact that the EEOC was never consulted in the drafting of this rule further illustrates that this is purely a political ploy. This HHS rule will threaten patients' rights, stand in the way of health care professionals, and restrict access to critical health care services for those who need them most.

Consumer Protections

We've covered this before as well, although the list seems to keep growing. As the Wall Street Journal has reported, "the administration has written language aimed at pre-empting product-liability litigation into 50 rules governing everything from motorcycle brakes to pain medicine."

Watchdog Groups

In addition to efforts at this site, OMB Watch keeps a close eye on many rule changes, and Pro Publica has a list of 25 rule changes and their current status – open for comment, OMB review, finalized, in effect, and so on. Or one can dig through the Federal Register or the Unified Agenda.

It doesn't seem likely that the Bush administration will be shamed out of stopping any of these last-minute efforts, most of which seem to be giveaways to friends in industry or other political allies. That means the challenge for the incoming Obama administration and Congress is mostly one of procedural maneuvering. However, the bigger issue for the public and the press is how government approaches these issues in the first place. Is scientific counsel valued and heeded? Are agency personnel hired due to competency, and allowed to do their jobs? Is the public informed of changes, informed of their consequences, and invited to comment? And is the government responsive and working for the public good? While the economic crisis is sure to demand a great deal of attention, some of the most telling and important battles are often waged at the smaller agencies, and it would wonderful if competency became the fashion once more in Washington.

( Hat tip to Dan Froomkin for several of these links.)

Clifford Dubery

Clifford Dubery — Wed, 17 Sep 2008 20:24:48 -0700