Critiques of Regulatory Policy Regulatory Successes n n

Critiques of Regulatory Policy

Regulatory Successes n n n FDA since 1900 Environmental regulation n Through the 1980 s Workplace safety Civil rights Banking n Sort of - lots of moral hazard problems

Regulations that Did Not Work so Well n n Airline rates and routes Trucking rates and routes Telecommunications Who wins and who loses in economic regulations? n Small towns and rural areas? n Unions? n Big business?

Are We Better Off? n n What has improved over the past 50 years? n Health? n Racism? n Do more people have more stuff? n What does it mean to be poor in the US over the past 50 years? What has gotten worse? n Income disparities? n Role of expectations?

Why Doesn't the Public Trust Agencies? n n What are examples of public distrust of agencies? Are these justified? What is the impact of this distrust? Why don't people want to pay taxes?

Cost Benefit Analysis n n n How much should we spend to save a life? n Why does Congress refuse to put a price on human life? n Why does this make CBA more difficult? How much to prevent injury? How much should personal responsibility matter?

CBA Costs - Tables from Saving Lives: A Review of the Record n n What is the problem with lives saved analysis? Are they the same lives for different risks? What about disability? What are the most cost effective regulations? n Interesting that vaccinations and clean drinking water are not here

Could We Spend the Money More Wisely? n n What type of risks do we spend the most on with the least return? n Asbestos abatement of stable asbestos in buildings n Superfund risks n Overstated health risks - LA cancer corridor What risks get the least attention? n Smoking? n Immunizations? n Primary care?

What is the Cost of Unemployment? n n Economic costs to the individual n Lost opportunities for your children n Loss of assets, making recovery harder Health costs n Stress n Reduced access to care Self-esteem Crime

Should we do CBA at All? n n Why not prevent all possible risks? n Precautionary principle What are the trade offs? How does the US concern with risks affect our cost of business production? When can preventing one risk cause another? n Natural pesticides n Smaller, lighter cars n More expensive power?

FDA n n Drug lag? What are the tradeoffs in FDA regulation? n Safety n Effectiveness n Should cost be part of the equation? Why are consumers in a poor position to judge drugs? n Background Information? n Timeframe of action? n Comparison with other drugs? Why not let the market sort it out?

Health Care as a Regulated Industry n n What are the problems facing health care in the US? n What has happened to nature of disease over the past 100 years? n How does this complicate health care policy? n What does this tell us about the Charity Hospital system? What are the financial incentives in

How is Ethanol a Regulatory Problem? n n n Would anyone burn ethanol as motor fuel without government subsidizes? What is the policy basis for pushing ethanol? What are the political issues? What are the downsides of ethanol? Is this a wise regulatory choice?

Should We Control Personal Risk Decisions? n n n Should consumers have the right to buy much cheaper and better mileage cars that are less safe? Should consumers have the right to use unapproved drugs? n What if they are dying? What about not getting their kids vaccinated? Smoking? n Smoking dope? Being fat?

Impossible Tasks n n Why do legislatures give agencies impossible tasks? What are the possible agency responses? What is the conflict between LSU owning both the charity hospital system and the medical school? What about the state regulating state owned hospitals?

Civic Republicanism n n n How can agencies be better representatives for the whole population than are the elected officials? What are the pressures on elected officials? How are these different for agencies? n Independent agencies? Should there be more public participation? Should congress and the executive have to disclose all contacts with the agency?

Regulatory Alternatives

Economic Incentives and Taxes for Environmental Risks n n n Tradeable permits for a fixed amount of pollution n Looks at total pollution or greenhouse gas, not process of control n Lets industry see who can do it the most efficiently What if you are downwind? n Does an aggregate reduction, which benefits more people, make you any happier? Carbon Tax n Goes to the heart of the CO 2 program n What are the downsides?

Collective bargaining for working conditions and safety n n n What are the limits on this? How could we change them? Is this a good idea?

Non-Agency Regulation: Tort and Compensation Law n n n How is tort law a regulatory process? Is it a democratic process? n What is the public input? n Who protects the public's interest in tort cases? What are the standards for scientific decisionmaking? n Breast implants? n Erin Brockovich? What are the standards for CBA? What if later evidence shows that the verdict or settlement was wrong?

What about Natural Monopolies? n n What are natural monopolies? n Why not allow cable companies to compete for business in a given community? How can natural monopolies change with time? n Telephones? n IBM mainframe computers?

CBA - Federal Flood Insurance n n Should the feds provide flood insurance? Why does it not work in the private market? Why are the political pressures on the feds? n Do local communities really want accurate flood maps? n Do people really want accurate storm probability predictions? n Are the feds really going to charge accurate premiums? What are the perverse incentives of the program?

CBA: Should We Rebuild New Orleans? n n n Would NO be in better or worse funding position if they had properly evacuated the folks before Katrina? n What is the CBA for real evacuations? What is the CBA for rebuilding? n What are the trade-offs? Who should pay n Should folks in low risk areas subsidize the Big Easy lifestyle? n How about rebuilding rich folks houses on the Mississippi coast? What about the responsibilities of the homeowners? n Should we bail them out when they do not buy insurance? n How much do you want to pay? What about coastal erosion and subsidence? n Should we rebuild homes before it is safe? n If we do not rebuild, what happens to the CBA?