The phenomenon known as “midnight regulation”—a surge of regulation that occurs at the end of presidential terms between Election Day and Inauguration Day—is well documented. The Obama administration could issue 50 or more midnight regulations before the president leaves office. One major concern with midnight regulations is that they will be ineffective or excessively costly, because they are not thought through as carefully as other regulations.
The federal role in highway spending is expected to get smaller because fuel tax revenues are decreasing and Congress is holding off on raising the federal gas tax rate. Meanwhile, states are not getting the most out of their highway spending. Traffic congestion plagues urban areas, and simply investing in highways and transit will not be enough to fix the problem.
A new study for the Mercatus Center at George Mason University discusses general principles that can help states maximize the value they get from their highway spending. While no two states are identical, policymakers can still learn from one another by observing what works and using the same general principles to create reforms that work for their states.
Small businesses feature prominently in the US economy because they employ about 50 percent of the workforce and pay about 50 percent of American wages. Also, small businesses are often a source of innovative ideas that can drive growth. To the extent that access to finance plays a role in bringing those ideas to the real economy, small-business finance remains important for the future of the economy. Yet new financial regulations arising from the Dodd-Frank Act that were intended to stabilize the banking industry after the 2008 financial crisis may be unintentionally limiting small businesses’ access to credit.
In a new study from the Mercatus Center at George Mason University, researchers Stephen Matteo Miller, Adam Hoffer, and David Wille provide a review of the latest academic research into the major sources of capital used by small businesses in the United States and summarize the major trends and challenges that small-business owners face in obtaining capital today.
The Bureau of Consumer Financial Protection (the Bureau) proposes a rule to prohibit mandatory arbitration agreements in consumer financial-product or service contracts. The Bureau bases its proposed rulemaking on findings from its 2015 study, which was mandated by Congress under Section 1028(a) of the Dodd-Frank Act.
In a new public interest comment for the Mercatus Center at George Mason University, University of Virginia law professor Jason S. Johnston, George Mason University law professor Todd J. Zywicki, and Mercatus Center senior policy writer Michael P. Wilt examine the Bureau’s proposed rule and findings, and they demonstrate that the Bureau’s data and analysis are often inconsistent, inadequate, and flawed.
Because of flaws in the methodology and data, the Bureau’s 2015 study should not be used as the basis for any regulatory proposal to limit the use of consumer arbitration. Furthermore, regulatory efforts to limit the use of arbitration will likely leave consumers worse off. A deeper analysis of the Bureau’s data shows that arbitration is, in reality, relatively fair and successful at resolving a range of disputes between consumers and providers of consumer financial products.
If communities are to recover after a disaster, community members must engender and engage in a process of social learning involving experimentation, communication, and imitation. This paper explores the post-disaster social learning process.
Defined-benefit pension plans for state and local government employees have imposed rising costs and financial risk on government budgets. In response, some reformers have proposed shifting newly hired public employees into defined-contribution plans similar to 401(k)s. But critics of this proposed reform have argued that closing a pension plan to new entrants would impose “transition costs” on plan sponsors as liabilities under the old defined-benefit plan are paid down.
A new study for the Mercatus Center at George Mason University explores how closing a pension plan to new entrants affects existing liabilities and whether there are significant costs imposed when transitioning to a defined-contribution, 401(k)-type plan. In fact, transition costs are very small, and they are more than offset by the reduction of newly accrued liabilities.
Federal regulations affecting food are intended primarily to protect public health by ensuring that food is safe. These regulations affect both the cost of growing and manufacturing food and the ever-changing makeup of the food supply. According to President Clinton’s Executive Order 12866, food safety regulations (like all regulations) must be based on “the best reasonably obtainable scientific, technical, economic and other information concerning the need for, and consequences of, the intended regulation.” Agencies are also legally responsible for ensuring that the science and analysis within these regulations satisfies quality, objectivity, utility, and integrity requirements. Yet far too often, federal food regulations conform to none of these requirements. As a result, food regulations cost far too much and accomplish far too little, far too often.
My testimony today will touch on these problems with our current food regulation system. I will provide several examples of failed food safety regulations and explain why there are better approaches to solve food safety problems than regulations that try to anticipate every conceivable problem.
In a new video, Mercatus Center Senior Research Fellow Brian Blase discusses a report from the Department of Health and Human Services that finds Medicaid enrollees who gained coverage through the Affordable Care Act cost almost 50 percent more, on average, than the government projected just one year ago.
Central banks' part in the Great Recession, and the lackluster recovery since, are reviving interest in monetary rules. That revival raises crucial questions. Might the Federal Reserve and other central banks have performed better if they’d adhered to monetary policy rules? Could rules have avoided the crisis altogether? Can they avoid future crises? If so, which rules work best? Can a monetary policy rule work even in a world of near-zero, or negative, interest rates?
Rebounding after disasters like tsunamis, hurricanes, earthquakes, and floods can be daunting. How do residents of these communities gain access to the resources they need to rebuild while overcoming the collective action problem that characterizes post-disaster relief efforts?
Please join the F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University for a panel discussion featuring Hayek Program Senior Fellow Virgil Storr and his new book Community Revival in the Wake of Disaster: Lessons in Local Entrepreneurship.
As the world’s first decentralized digital currency, Bitcoin has the potential to revolutionize online payment systems and commerce in ways that benefit both consumers and businesses. Individuals can now avoid using an intermediary such as PayPal or submitting credit card information to a third party for verification—both of which often involve transaction fees, restrictions, and security risks—and instead use bitcoins to pay each other directly for goods or services.