Under the Government Performance and Results Act, the executive branch has a monopoly on the production of information about the performance of federal programs. Under Executive Order 12866, which governs regulatory analysis and review by the Office of Information and Regulatory Affairs, the executive branch has a monopoly on the production of information about the prospective and retrospective results of regulations. Mercatus Center research projects have found that GPRA and the executive orders on regulatory analysis have improved decision-makers’ knowledge about the results of programs and regulations. But as I noted in my testimony, we have also found that such analysis is often seriously incomplete.
The heated rhetoric coming in March 2017 about whether Congress should raise the debt ceiling will obscure the federal government’s real problem: an unprecedented increase in government spending and the future explosion of entitlement spending has created a fiscal imbalance today and for the years to come. No matter what Congress decides to do about the debt ceiling, the United States must implement institutional reforms that constrain government spending and return the country to a sustainable fiscal position.
While higher capital requirements can reduce the likelihood of banking crises, I would like to raise two key issues concerning the proposed policy statement: 1) bank subsidiary capital requirements may be more effective than holding company capital requirements, and 2) the benefit-cost analysis used to analyze the rule could be improved by adding other dimensions to the analysis.
The Federal Aviation Administration (FAA) has issued an interim final rule creating a new electronic registration system for unmanned aircraft systems (UAS) and requiring, for the first time, the registration of model aircraft operators. This comment highlights an omission in the agency’s alternative scenario analysis, questions some of the purported benefits of the rule, and points out some of the continuing legal shortcomings associated with the FAA’s approach. While we support the advent of a simple and streamlined registration system, we object to the extension of the registration requirement to model aircraft operators.
Virtually all states require auto manufacturers to sell new vehicles through local franchised dealers, protect dealers from competition in Relevant Market Areas, and terminate franchises with existing dealers only after proving they have a “good cause” to do so. In 1979, fewer than half of all states regulated all three of these aspects of the manufacturer-dealer relationship. By 2014, all but one state regulated every single one of these aspects. These state laws harm consumers by insulating dealers from competition and forestalling experimentation with new business models for auto retailing in the twenty-first century.
Contrary to Title II proponents’ claims, wireless carriers do not infringe free speech rights when they filter text messaging content they believe their customers do not wish to receive. Title II regulation of text messaging and short code service would not protect free speech. In fact, because mobile carriers exercise editorial discretion over mass messages they transmit, regulation would impermissibly chill wireless carriers’ exercise of speech. Further, since wireless carriers transmit short codes and other messaging based on individual arrangements and exercise control over the content of certain messages, messaging does not resemble telecommunications. For these reasons, regulating short code and similar messaging services under Title II of the Communications Act would likely be unconstitutional and contrary to law.
The outstanding work of the GAO and agency IGs has never been more important than it is today given the massive financial and performance challenges facing the federal government. I commend the subcommittee for its efforts to ensure that this work gets the attention and action it deserves so that it can achieve maximum impact. I would be happy to provide any further assistance that might be useful to these efforts.
The first fundamental question for policymakers in this area is defining the policy goal. I believe the appropriate goal of competition policy related to online platforms should be the promotion of consumer welfare—a concept rigorously defined in the economics literature. Consumer welfare is maximized when every unit of every resource is employed in the use that consumers value most highly. Competition policy agencies in the United States typically regard consumer welfare as the sole goal of competition policy. Even if policymakers choose to pursue goals other than consumer welfare, they need to understand the impact of policies on consumer welfare so they can act with full information of the relevant tradeoffs.
Citizens expect federal regulation to accomplish a lot of important things, such as protecting us from financial fraudsters, preventing workplace injuries, preserving clean air, and deterring terrorist attacks. Regulation also requires sacrifices; there is no free lunch. Depending on the regulation, consumers may pay more, workers may receive less, our retirement savings may grow more slowly due to reduced corporate profits, and we may have less privacy or less personal freedom. Given the important values at stake, Congress and regulatory agencies should craft regulations with full knowledge of their results. Decision-making in the dark should not be an option.
The Department of Transportation (DOT) is proposing to implement a national registration system for small Unmanned Aircraft Systems (UASs), the details of which are to be recom- mended by a task force no later than November 20. The stated aim of the registry is to assist in identifying owners and operators of UASs that violate the law and endanger safety, thereby closing a perceived gap in enforcement. This comment highlights several major procedural concerns, followed by an examination of whether the safety benefits of a registry are likely to outweigh the societal and budgetary costs.
Nate Silver, today’s most influential statistician and founder of the award-winning data website FiveThirtyEight, will join Tyler Cowen for a wide-ranging, intellectual dialogue as part of the Conversations with Tyler series.
History has shown that tax reforms seldom last when special interests have substantial incentives to lobby Congress for tax breaks. Making the tax code as simple—by taxing a broad base at the same low rate—and as transparent as possible will help reduce the ability and incentives to reverse future tax reforms.