The Costs of Regulating–and Not Regulating

A few days ago, I wrote about the REINS Act, a Congressional effort to block administrative regulatory activity. A commenter asked for a discussion of what we know about the costs of regulation, so I did a bit of research.

What I discovered reinforced my belief that the answer to most questions is: “it depends,” and/or “it’s more complicated than that.”

It turns out that there is not a lot of research calculating the costs of regulatory activity, and what does exist comes to very inconsistent results. Scholars argue about how such costs should be measured, and how best to conduct accurate analyses.

Despite these uncertainties, it is standard procedure to subject proposed rules to a cost/benefit analysis before they are promulgated. Since those analyses are being conducted prior to the implementation of proposed regulations, they are based upon estimates of both the costs and the benefits, and no matter how good-faith those estimates, they are essentially guesswork.

Anti-regulation politicians who throw around huge numbers that “demonstrate” how burdensome regulations are rarely admit that there is very little agreement on those numbers, nor do they address the benefit side of the equation, so a concrete example, assessing the actual costs of regulations that have been in effect for a long enough period of time to permit more accurate assessment, is instructive.

Vanderbilt University recently studied the compliance costs the university incurred, and came up with a big number. 

So let’s see which of those nasty, costly regulations we could dispense with.

The great majority of the university’s compliance costs were connected to research. There are a number of stringent rules governing academic research: some require respecting the privacy of human subjects, others ensure that volunteers in medical studies have information they need in order to make informed decisions about their participation. Still others ensure that the research will not pose unnecessary risks to individuals or communities.

Which of those “costly” rules should we dispense with?

Universities also bear the costs of obtaining accreditation. Accrediting agencies require lots of information in order to ascertain whether a given institution of higher education is providing…what’s that called?…education. Without accreditation, students would have to make expensive decisions about attendance without knowing whether the “product” had been adequately vetted, and whether a degree from that institution would be valued or discounted by potential employers.  (Actually, I’d favor a far more rigorous examination, since some “accredited” schools hardly seem to merit that credential. But that is a post for another day.)

Universities must also comply with regulations that are generally applicable. They must, for example, abide by rules governing immigration. Would the Congressional critics of regulatory costs prefer that University personnel turn a blind eye to the immigration status of their students? What about Human Resources regulations requiring compliance with civil rights laws?

Whole industries must comply with costly regulations governing food and drugs. Even if we could measure those costs with reasonable accuracy, how should we count the benefits? How do we determine–let alone value– the number of lives saved? How do we calculate, let alone value, reductions in illnesses from impure drugs or spoiled foods?

It seems likely that the REINS Act is aimed at environmental regulations. How do we value the benefits of clean air and water?

None of this is to say that all regulatory activity is wonderful or necessary. The “take away” is that both purported costs and anticipated benefits should be viewed with healthy skepticism, and all regulations should be evaluated individually and on their own merits.

Bottom line: it is perfectly justifiable to argue that the benefits of a specific regulation are not worth the costs involved in complying with that particular regulation. But ideological arguments against an activity called “regulation” are–excuse the expression–bullshit.

 

Telling It Like It Is

Today, unfathomable as it is, Donald Trump will become President of the United States. How could this happen?

Granted, Trump lost the popular vote overwhelmingly, but despite being manifestly unfit for the office, he mustered enough support from millions of Americans to win the Electoral College. The Chattering Classes have offered a number of explanations, almost all of them centering on Democratic failures: the “liberal elites” were unable to “connect” with middle America; Clinton paid too little attention to Michigan, or to the economic distress of rural voters; Democrats didn’t show enough respect for the values of small-town America. Etc.

Trump’s voters often said that what attracted them was that “he tells it like it is.” At risk of being very politically incorrect, let me tell you what I think they heard. Let me tell it like I think it is.

Post-election analyses showed that most Trump voters were not poor. As Myriam  Renaud recently reminded us, however, there’s a difference between “psychic” and fiscal poverty, and she shared a trenchant Eric Hoffer observation.

[Hoffer] found that the intensity of the discontent found among the new poor is not necessarily tied to economic hardship. Indeed, individuals born into misery do not usually revolt against the status quo—their lot is bearable because it is familiar and predictable. Discontent, the emotion Trump tapped into so adeptly, is more likely to afflict people who have experienced prosperity. When their comfortable life is diminished in some way, the result is intolerable. According to Hoffer, it is usually “those whose poverty is relatively recent, the ‘new poor,’ who throb with the ferment of frustration. The memory of better things is as fire in their veins.”

Economic uncertainty, not deprivation, and the loss of white male privilege explain a lot more than fiscal distress. Trump won because he gave people who were experiencing a perceived loss of status or privilege someone to blame for that loss.

It is impossible to argue that a vote for Trump was a vote for his “policy agenda.” He didn’t have one, unless, of course, you think that building a wall to keep Mexicans out, ejecting Muslims (or in the alternative, creating a registry), demeaning women, threatening (brown) immigrants, cozying up to the KKK and the neo-Nazis, and insisting that our first black President was illegitimate are “policies.”

In the wake of the election, Trump has backed off other campaign promises, but his overt racism and misogyny have continued. As an article in the American Prospect put it,

President-elect Donald Trump wasted no time in establishing a hideous double standard of racist privilege in the White House. His appointment of Stephen Bannon as chief strategist and his picks of Jeff Sessions for attorney general and retired Lieutenant General Michael Flynn as national security adviser have been praised without qualification by Klansmen, neo-Nazis, the alt-right, and other white supremacist groups.

While “nice” liberals offer economic explanations of the election and counsel “kinder, gentler” attitudes toward Trump voters (who were predominantly, albeit certainly not exclusively, less-educated white rural males), scholars who have analyzed the data have reached different conclusions. There is an emerging consensus among those political scientists that although economic dissatisfaction was part of the story, racism and sexism were much more important.

As an article in the Washington Post explained,

Donald Trump repeatedly went where prior Republican presidential candidates were unwilling to go: making explicit appeals to racial resentment, religious intolerance, and white identity. ..racial attitudes were stronger predictors of whites’ preferences for Trump or Clinton than they were in hypothetical matchups between Clinton and Ted Cruz or Marco Rubio..

Other research confirms, as FiveThirtyEight reported, that prejudice was one of the “distinguishing attitudes” of Trump voters in the 2016 primaries.

The Economist tested Clinton’s “deplorables” percentage:

At first glance, Mrs Clinton’s 50% estimate looks impressively accurate: 58% of respondents who said they backed Mr Trump resided in the poll’s highest quartile for combined racial-resentment scores. And at a lower threshold of offensiveness—merely distasteful rather than outright deplorable, say—91% of Mr Trump’s voters scored above the national average.

What about the argument that Trump voters “overlooked” Trump’s narcissism, sexism and racism because they thought he would be more effective at job creation? Salon reported on the results of an American National Election (NES) study probing that possibility.

Eighty-four percent of whites who believe it is “extremely likely” that whites can’t find a job because employers are hiring people of color instead support Trump, compared with 23 percent of those who think it is “not at all” likely. Among white Democrats, 58 percent who believe people of color are taking jobs support Trump over Clinton, compared with less than 1 percent of those who believe it is not at all likely. Eighty-one percent of white women who think it is “extremely likely” people of color are taking jobs supported Trump, compared with 26 percent who don’t think that.

I have colleagues who privately admit that the evidence points to the importance of racial resentment and the appeal of White Nationalism in motivating Trump voters, but who shrink from making that claim publicly.

The problem is, if we refuse to face facts–if we refuse to acknowledge the deep wells of tribalism, racism and sexism that persist despite America’s constitutional and legal commitments to equality–we will never eradicate it. We will never have honest conversations about the fears and resentments to which people like Trump so skillfully appeaI. (That actually may be the only real skill Trump has.)

When Trump promised to “make America great again,” his voters heard “I’ll make America White again.”

I understand that it isn’t pretty. I understand that confronting it is uncomfortable. But ignoring the elephant in the room is no longer an option.

There are numerous “resistance” movements springing up in the wake of the election. They are all important, some critically so. But nothing is more important than resisting Trump’s efforts to take politics back to an “us versus them” power struggle, where “us” means white Protestant straight males and “them” is everyone else.

Why Ignorance is So Dangerous

There is evidently a widespread belief that–while your dentist should know what amalgam to use in filling a cavity, and your car mechanic should have at least a passing familiarity with automobile parts–anyone who can fog a mirror can run a government agency, or the country.

Surprise! Public officials actually need to know stuff.

Understanding complex global interrelationships, for example, matters. As Fareed Zakaria pointed out in a column for the Washington Post, Trump’s inability to “connect the dots” (or even see dots) could be the best thing that has happened to his nemesis China in a long time. China plans to

exploit the leadership vacuum being created by the United States’ retreat on trade. As Trump was promising protectionism and threatening literally to wall off the United States from its southern neighbor, Chinese President Xi Jinping made a trip through Latin America in November, his third in four years. He signed more than 40 deals, Bloomberg reported, and committed tens of billions of dollars of investments in the region, adding to a $250 billion commitment made in 2015.

The Huffington Post had another example, in an article focused on Trump’s intent to make significant changes in U.S. policy toward Israel and the Palestinians.

President-elect Trump and his surrogates are dropping heavy hints about plans to break with longstanding U.S. positions vis-à-vis the Israeli-Palestinian conflict, in the direction of changes that both Israelis and Palestinians would view as turning away from a negotiated peace agreement…few people today seem to grasp the consequences – entirely unrelated to Israel and the Palestinians – such changes are set to unleash, or the profoundly negative implications they would have for all Americans.

It’s hard to argue with the assertion that most Americans haven’t the foggiest notion that such policy changes would affect anyone outside the Middle East. Knowledgable people, however, know better.

it seems that in the early 1990s Congress passed laws requiring the U.S. to de-fund any United Nations (UN) agency that admits the Palestinians as a member. Unfortunately, de-funding requires giving up any U.S influence over the agency in question.

Back then, nobody gave the laws a second thought, since in those days it was considered beyond the pale to suggest that there might ever be a Palestinian state. Today, things are very different. Support for a two-state solution has been U.S. policy since 2002, and in 2012, the Palestinians were admitted to the UN as a non-member observer state. This status grants them the right to join specialized UN agencies – a right the U.S. cannot block, and admission in many cases is either automatic or requires only a simple majority vote.

Pursuant to the law, when Palestinians joined UNESCO, America withdrew.

The law is still in effect, so Trump’s proposed changes would trigger some very unpleasant consequences, totally unrelated to Israeli-Palestinian relations. As the writer explains,

Take, for example, the International Atomic Energy Association (IAEA). Americans already feeling threatened by the nuclear programs of countries like Iran and North Korea will have even greater reason to worry when the Trump Administration has to de-fund the key watchdog monitoring civilian nuclear programs around the world (the U.S. is the IAEA’s largest donor, so de-funding would be devastating to its operations).

Or what about the World Health Organization (WHO)? After being forced by Zika and Ebola to accept that borders can’t stop the spread of deadly diseases, Americans will have greater reason to be fear for their own well-being when Trump is forced to cut off funding to the key international body charged with dealing with international epidemics and pandemics.

Then there are the immediate concerns to most Americans: jobs and the economy. Here let’s consider the impact of the U.S. de-funding the World Food Program (WFP) and the UN Food and Agricultural Organization (FAO). Rural America may not care about the Israelis or Palestinians, but American farmers and shippers will be shocked when agricultural export programs specifically designed to benefit U.S. farmers and shippers suddenly end.

And then there is the World Trade Organization (WTO) and the World Intellectual Property Organization (WIPO). While threatening to pull out of trade agreements and organizations like these may seem like smart politics in an election season, America’s businesses may be less sanguine when, because of actions taken on Israel-Palestine, Trump literally has no choice but to give up all influence in organizations from which US businesses derive real benefits when it comes to defending their rights and equities around the world.

I would be willing to wager that Trump and his inexperienced advisors are entirely unaware that the law exists, let alone its likely consequences.

I wonder if the supporters who keep giving him a pass would be equally supportive of a dentist who used lead to fill their cavities…..

Birds of a Feather

Unfortunately, they’re cuckoo birds.

New York Magazine has a story titled: “The Scariest Thing About Trump: Michael Flynn’s Team of Nutters.” After reading it, I understand their characterization, although I find it very difficult to single out any one of Trump’s demented choices and activities as “scariest.” (I’ve been in a perpetually  terrified state since November 8.)

That said, the article makes a pretty persuasive argument that Flynn is certifiable. And when you consider that Presidents have far more authority over foreign policy than over domestic matters, it’s pretty chilling.

The opening paragraphs of the article by Jonathan Chait capture the threat posed by a President who lacks not only experience, but judgment, intellect and any interest in educating himself.

The most frightening aspect of the looming Donald Trump presidency is not so much the likely outcomes, many of which are horrifying, as the unlikely ones. Running the federal government of the world’s most powerful country is hard, and many things can go wrong. Full control of government is about to pass into the hands of a party that, when it last had it, left the economy and the world in a shambles. These disasters occurred because the party’s ideological extremism made it unequipped to make pragmatic choices, and because its chief executive was a mental lightweight. Sixteen years after it last came to power, the party has grown far more ideologically extreme, and its head of state is much less competent. Many of the risks of an extremist party led by an unqualified president are difficult to foresee in advance. But one is especially glaring: the appointment of Michael Flynn to be national security adviser.

National security adviser is a crucial position for any president. It is especially so for a uniquely inexperienced one. (Donald Trump being the only president in American history lacking any public experience in either a civilian or military role.) And it is all the more crucial given Trump’s flamboyant lack of interest in getting up to speed (he confounded his aides by eschewing briefing books throughout the campaign, and has turned down most of his intelligence briefings since the election.) Flynn’s appointment is the one that contains the sum of all fears of Trumpian government.

Chait says that Flynn exhibits the worst qualities of Dick Cheney, “but in exaggerated form.” Like Trump, Flynn is a sucker for conspiracy theories. He believes, for example, that Islamists have infiltrated the Mexican border, guided along the way by Arabic-language signs he says he’s seen. (The Mexicans–and even the Texans– might find that belief a bit…bizarre.) Flynn also believes that Democrats have imposed “Sharia law” in parts of Florida. He once suggested Hillary Clinton could have been involved in child sex trafficking.

Chait says that Flynn’s subordinates at the Defense Intelligence Agency gave these frequent theories a name. “Flynn facts,” are code for the opposite of factual.

As the article documents, Flynn has surrounded himself with equally delusional staff. Perhaps the scariest paragraph in the entire article is this one:

Compounding Flynn’s susceptibility to conspiracy theories is his professed hostility to any information that undercuts his preconceived notions. According to a former subordinate speaking to the New York Times, in a meeting with his staff “Mr. Flynn said that the first thing everyone needed to know was that he was always right. His staff would know they were right, he said, when their views melded to his.”

This is the man–and the philosophy–that will guide a President Trump in his dealings with the rest of the world–a man chosen largely because his delusions, self-regard and self-righteous certainty mirror the qualities of our incoming Commander-in-Chief. As the old saying goes, birds of a feather flock together.

If the fact that these two cuckoo birds will have control of American foreign policy (not to mention the nuclear codes) doesn’t keep you up at night, you must have nerves of steel.

The Parade of Horribles

Res Ipsa Loquitur is a legal term meaning “the thing speaks for itself.” Donald Trump’s personnel selections aren’t just speaking–they’re screaming.

Trump has chosen people for cabinet positions who are unalterably opposed to the mission of the agencies they would lead. It is difficult–okay, impossible–to imagine a more terrifying–or less competent– group of cabinet nominees.

Betsy DeVos wants to destroy public education, so Trump wants her to be Secretary of Education. Jeff Sessions is a (marginally) “kinder, gentler” white supremacist, so of course Trump wants him at the Justice Department. And my cardiologist cousin just sent me the following rundown on Tom Price, nominated to run Health and Human Services (HHS).

I’m not going to paraphrase it: I’m just going to share it. And then I think I’ll go throw up.

________________

This is a summary of an article appearing in the New England Journal of Medicine (Jan 12, 2017). With regard to the department of health and human services (HHS), only two previous secretaries have been physicians. For the most part, all of us physicians work to defend not only our own patients, but society at large against dangers to health, and in the process, usually eschew venal and self oriented goals. That is why most of us chose this respected profession of care-giving in the first place.

Let us begin by describing the good doctors: Otis Bowen, our former Indiana Governor, was Ronald Reagan’s second HHS secretary, and he engineered the first major expansion of Medicare, championed comparative effectiveness research and, together with Surgeon General C. Everett Koop, another exemplary physician, led the fight against HIV-AIDS. Louis Sullivan, HHS secretary under President George H.W. Bush, focused his attention on care for vulnerable populations, campaigned against tobacco use, led the development of federally sponsored clinical guidelines, and introduced President Bush’s health insurance plan, which incorporated income-related tax credits and a system of risk adjustment. All these aforementioned physicians, serving in GOP administrations, drew on a long tradition of physicians as advocates for the most vulnerable, were defenders of public health, and enthusiastic proponents of scientific approaches to clinical care.

Now comes the bad: In sharp contrast with these previous examples, Tom Price, Trump’s pick for secretary of HHS, shows a record that demonstrates less concern for the sick, the poor, and the health of the public, in favor of greater concern for the economic well-being of the rich and the care-givers themselves.

To exemplify this point, let’s enumerate his previous positions.

1. Price has sponsored legislation opposing regulations on cigars and has voted against regulating tobacco as a drug, in reality, this product is actually far worse than most drugs!

2. In 2007, during the presidency of George W. Bush, he was one of only 47 representatives to vote against the Domenici-Wellstone Mental Health Parity and Addiction Equity Act, which improved coverage for mental health in private insurance plans.

3. He voted against funding for combating AIDS, malaria, and TB, and against expansion of the State Children’s Health Insurance Program, and in favor of allowing hospitals to turn away Medicaid and Medicare patients seeking nonemergency care if they could not afford copayments.

4. He favors converting Medicare to a premium-support system.

5. He opposed reauthorization of the Violence Against Women Act, and has voted against legislation prohibiting job discrimination against LGBT people and against enforcement of laws against anti-LGBT hate crimes.

6. He favors amending the Constitution to outlaw same-sex marriage.

7. He opposes stem-cell research and voted against expanding the NIH budget and against the recently enacted 21st Century Cures Act, showing particular animus toward the Cancer Moonshot. Would he continue this stance if he developed cancer himself?

8. He is a leader of the repeal of the ACA (“Obamacare”) in favor of a regressive “plan” which, without going into details, will offer much greater subsidies relative to income for purchasers with high incomes and more meager subsidies for those with low incomes. In effect, Price’s replacement proposal would make it much more difficult for low-income Americans to afford health insurance, diverting federal tax dollars to people who can already afford it, and also substantially reducing protections for those with preexisting conditions. The end result would be a shaky market dominated by health plans that offer limited coverage and high cost-sharing.

9. Strongly anti-abortion and advocating the defunding of Planned Parenthood, he has accepted the validity of the fraudulently modified videotapes used against this organization—despite their many pro-health programs for the poor.

The HHS Department oversees a broad set of health programs that touch about half of all Americans. Over five decades covering nine presidential tenures of both parties, HHS secretaries have used these programs to protect the most vulnerable Americans. The nomination of Tom Price highlights a sharp contrast between this tradition of compassionate leadership and the priorities of the incoming administration.

I am not at all proud of this “fellow” physician!