Category Archives: regulation

Getting Rid of Federal Government Rules

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A couple of random thoughts triggered by a Wall Street Journal article.  The Republican Congress has been using the Congressional Review Act to rescind rules enacted by various Executive Branch agencies.  The Act allows Congress, by simple majority vote (no Senate filibuster) and Presidential signature to rescind rules so long as the rescission is done within 60 days of the rule’s promulgation in the Federal Register or formal reporting to Congress.  There are potsful of rules that haven’t yet passed that threshold, and so Congress can reach back years for rescissions under the Act.

Senate Democrats have insisted the rules have lengthy debate time….

This isn’t necessary.  The rules have already been debated extensively, both in the public and via the rule’s public comment period during which experts in the subject matter as well as the general public have conducted extensive debate.  Except for rules rushed through at the end of a President’s term or whose comment period was held sub rosa, like many of the EPA and CFPB rules have been.  Those rules had their chance at lengthy debate, and the relevant rule-making authority has already said that lengthy debate wasn’t necessary.

Senator Chris Coons (D, DE) said the “Republican majority has misused” the act and has repealed regulations “adopted genuinely to protect the environment, protect consumers, protect the public.”

Of course.  It’s the thought that counts for Democrats, not the actual <ahem> disparate impact they have in their failure to protect much of anything and the actual damage they do, especially to consumers, citizens, and individual choices.

Congress should push the pace; the extraneous rules are costing us money.  Just the 13 rescinded already have saved the public some $85 billion.  There’s also nothing in the Act that prevents Congress from batching up related rules (or unrelated rules, come to that) and rescinding them en masse.

The Durbin Amendment and Price Fixing

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Senator Dick Durbin (D, IL) added to Dodd-Frank an amendment that mandated the maximum price large banks could charge merchants who process debit-card payments.  The House’s Financial Services Committee, in marking up Chairman Jeb Hensarling’s Financial Choice Act, included repeal of the Durbin Amendment.

Naturally, Durbin has demurred, and he did so, among other place, in a Letter to the Editor of The Wall Street Journal.

It’s no secret that Wall Street hates the swipe-fee law that I authored in 2010. This law finally reined in the debit swipe-fee price-fixing that Visa and MasterCard were doing on behalf of banks. The old rigged system permitted Visa and MasterCard to fix the same fees for all card-issuing banks, and without competition the fees always went up. It was a market failure and merchants and their customers ended up paying for it.

And

The 2010 reform law said that if the nation’s top 1% of biggest banks are going to let Visa and MasterCard price-fix their swipe fees, then the fees must be reasonable and proportional to the cost of conducting the transaction.

Wow.  Price fixing is OK as long as it’s Big Government doing to fixing, says the Progressive-Democrat from Illinois.  No.  There exist, already, laws against such collusion; all that’s necessary, were the banks actually colluding as Durbin claims, is to enforce existing law.  There is neither need nor excuse to expand Government by writing a new law to fix a failure from enforcing existing law.

Market failure?  Again, no.  Not every burble, bubble, or dislocation represents a market failure; indeed, they’re the normal volatility of a thriving free market.  Or they would be with less government interference so we actually had a free market.  Far from a market failure, this failure is another failure of Big Government’s central planning for our market.  It’s time—long past time—to dump the Durbin amendment.

It’s time—long past time—for competition to reenter the credit and debit card free market niche and to let the free market “fix” the prices.  It’s time—long past time—for Big Government to leave the market.

An Example of the Climatistas’ Political Failure

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Neil deGrasse Tyson in some recent remarks:

…when it comes time to make decisions about science, it seems to me that people have lost the ability…to judge…what is true, and what is not.  What is reliable, what is not reliable.  What should you believe, what should you not believe.

And

When you have people who don’t know much about science, standing in denial of it, and rising to power, that is a recipe for the complete dismantling of our informed democracy.

Indeed.  And yet guys like Tyson are loathe to look into the mirror and see who it is that stand in denial of science, even of the basic tenets of science, like constant questioning, comparing theory with observation and adjusting theory to fit the observations—rather than the climate pseudo-scientists’ practice of ignoring those offending observations while decrying those who disagree with their settled science.

Climate pseudo-science has a long and venerable track record of failed predictions; it’s models still can’t predict simultaneously the past and the present.  Indeed, its predictions of the present are wildly at odds with empirical observations from satellites and high-altitude balloons.  Global temperatures haven’t risen significantly for nearly 20 years, and the rise since the early 19th century still leaves us below the long-term global average.  Atmospheric CO2, far from being a pollutant (a bald, unsubstantiated declaration of the EPA’s pseudo-science), is a well-known plant food.

The only tangible effect of anthropogenic CO2 to date is that CO2 is greening the Earth, stimulating faster plant growth, and more drought resilience across a broad range of species.

And so guys like Tyson decry the failure of democracy and of democratic principles because other guys, of whom they disapprove, get elected.

Because only the correct outcome is democratic.

This isn’t petty hubris.  It’s dishonesty.

Social Security Trust Fund Investing in the Stock Market

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The Wall Street Journal held one of its aperiodic debates last Sunday, this time on whether the Social Security Trust Fund should be allowed to invest in stocks.  One debater argued that such investing would reduce the need for dependence on benefit cuts or tax increases; the other claimed that government should stay out of the market.

It’s certainly true that investing in the stock market could produce better returns than the Trust Fund’s current requirement to invest wholly in (unmarketable) Federal debt instruments.

Stocks are riskier than bonds, so shifting some Social Security assets from low-risk, low-return Treasury bonds to high-risk, high-expected-return stocks would expose the program to greater financial risk. This risk, however, has to be balanced against the likelihood of a larger trust fund and thereby less need for benefit cuts or tax increases to shore it up down the road. Economists also make a theoretical argument that the plan would especially benefit the young—who haven’t yet accumulated much financial wealth—by enabling them to invest in high-yielding financial assets without direct exposure to market risk.

The problem with this, though, is that a realized loss risk in those stock investments would negatively impact everyone so invested: every person with a present or future claim on the Trust Fund were Social Security to take such a chance, rather than only those individuals who make the choice for themselves.  I’m one of those confident in the long-term profitability of stock investing, but that’s my choice.  No one else should be dragooned into the outcomes of my choice were I to turn out wrong and wind up eating cat food inside my cardboard box under a bridge abutment.

[N]o one wants the Social Security trust fund to control the stock market. Even if the entire trust fund was plowed into stocks, it would account for only a fraction of the market.

This is disingenuous.  It’s the government doing the investing; of course, it will move to protect its investment with laws attempting to bar losses, laws attempting to dictate the kinds of risks companies in the market should be permitted to take, laws demanding taxpayers make the Trust Fund whole from market downturns, laws….  Politics cannot be divorced from the Trust Fund’s investments or the outcomes of those investments.  Especially since, as is currently the case, so much of the Trust Fund’s contents finds its way into the general treasury through “borrowing.”  All for the welfare of our seniors, of course.

Better to duck the question altogether, and make an even more radical change to our retirement safety net: privatize Social Security, as I’ve suggested before.  Let individuals invest their monies (including those, if any, by law earmarked) for their own future retirement in the stock market—if they wish—and be responsible for their own outcomes only and not, as taxpayers, for the government’s, and so everyone else’s, outcomes also.

YGTBSM

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This episode is from Newark Mayor Ras Baraka (D).  He claimed last Sunday, with a straight face that

Attorney General Jeff Sessions is “targeting” mayors like himself, and intimidating them into being “fugitive slave catchers that run around and do their bidding in our cities.”

Milwaukee County, WI, Sheriff David Clarke was more polite than I:

I’ve heard a lot of stupid things [but] comparing fugitive slaves to illegal immigrants is the gold standard of stupidity[.]

I say, rather, that Baraka’s TDS has turned him into an irrational election-denier.