Topic: Regulatory Studies

EPA on Guard against Spills

Well, at least of the dairy kind:

New Environmental Protection Agency regulations treat spilled milk like oil, requiring farmers to build extra storage tanks and form emergency spill plans….

The EPA regulations state that “milk typically contains a percentage of animal fat, which is a non-petroleum oil. Thus, containers storing milk are subject to the Oil Spill Prevention, Control and Countermeasure Program rule when they meet the applicability criteria.”

Peter Daining of the Holland Sentinel (Holland, MI) has a report, including predictions that smaller dairy producers could be driven out of business by the cost of the containment rules.

A Life-Saving Approach to Transplantable Organs

Raymond Raad, physician and coauthor of the Cato study, “Bending the Productivity Curve: Why America Leads the World in Medical Innovation,” has an oped at the Daily Caller arguing that the United States could save thousands of lives per year by allowing individuals (or insurance companies, or the government) to pay people who agree to give their organs to patients who need them.

Raad cites the experience of Iran, which has eliminated its waiting list for transplantable organs. (The United States has 83,000 people waiting for kidneys alone. Forty percent will die waiting, and those who do receive a kidney die sooner because their health deteriorates while waiting.) He also cites the three main criticisms of compensating donors/sellers – “One, the prospect of payment can be so tempting that it blinds donors to the risks involved; second, it may lead only poor people to donate; third, it may turn altruistic donors away” – and shows that recent polling data contradicts all three.

Raad concludes:

Since this is the best data we have, and with 5,000 people expected to die this year on the waiting list, we owe ourselves at least a geographically limited experiment in monetary incentives for kidneys.

For more on how eliminating this government-imposed price controls would save lives, read Arthur Matas’ Cato study, “A Gift of Life Deserves Compensation: How to Increase Living Kidney Donation with Realistic Incentives,” and Healthy Competition: What’s Holding Back Health Care, and How to Free It.

Short-Sighted Rules for Affordable Housing

The state of Maryland wants more people to have affordable housing – at least if they’ve already got it. Concerned that the owners of mobile home parks might sell the land for other uses, “affordable housing advocates” succesfully lobbied Maryland legislators this year for

legislation that, they say, discourages owners of mobile-home parks from selling their properties. If the landowner does sell, it provides the homeowner with some protection.

Under the law, which was passed earlier this year, a mobile-home park owner who wants to sell and change land use must give written notification to the residents and provide displaced homeowners with a relocation plan and relocation assistance that equals 10 months’ worth of rent. The legislation applies to mobile parks with more than 38 sites.

Now the first thing to be said about this is that it is theft. That’s become so common in legislatures that we’ve become accustomed to it. But we shouldn’t lose sight of what happened here: Some people spent their own money to buy land. They rented that land to people with mobile homes, who knew that they were not buying the land, they were just renting a place to park their mobile homes. (The word “mobile” might be a tipoff that they’re made to move.) And then the government took away the owner’s right to change the use of his land. The owner could still sell it, of course, as long as he gives written notification of his plans, provides the renters with a “relocation plan,” and pays them 10 months’ rent to leave his land. That’s a huge burden; the government has simply appropriated much of the value of the owner’s land.

But there’s an obvious long-term consequence here, too, one that the Washington Post didn’t get to in its 1000-word story. What’s going to occur to a landowner as she reads this story? She’s going to think, if I allow anyone to park a mobile home on my property, I’ll be permanently harnessed to that tenant, like a medieval serf. So maybe I’d better not rent any space to a mobile home owner. But then she’s going to think a bit further: What about other kinds of affordable housing? If I build inexpensive apartments or bungalows, and rent them to people who need affordable housing, will the state of Maryland decide that I shouldn’t be allowed to change the use of the land or sell it? After all, wealthy Montgomery County, Maryland – which doesn’t have many mobile homes – does have a 20-page handbook of rules and restrictions for any owner who might want to convert an apartment building to condominiums, including the county’s right to buy the land and a guarantee of lifetime tenancies for low-income elderly tenants. William Tucker pointed out in a 1997 Cato paper how rent control laws usually had to be followed by condo conversion restrictions, as building owners tried to find some way to make a profit on their buildings. And then of course the whole series of attempts to “protect” affordable housing leads to housing shortages and sky-high rents.

If you want people to supply affordable housing, it’s probably a good idea not to pile taxes, restrictions, and threats of confiscation on the backs of those who do.

Minimum Wage Hikes Deserve Share of Blame for High Unemployment

Even though the Obama Administration claimed that squandering $800 billion on so-called stimulus would  keep the joblessness rate below 8 percent, the unemployment rate today is almost 10 percent. There are many reasons for the economy’s tepid performance, including a larger burden of government spending and the dampening effect of future tax rate increases (tax rates will jump significantly on January 1, 2011, when the 2003 tax cuts expire).

A closer look at the unemployment data, though , suggests that minimum wage laws also deserve a big share of the blame. In this Center for Freedom and Prosperity video, a former intern of mine (continuing a great tradition) explains that politicians destroyed jobs when they increased the minimum wage by more than 40 percent over a three-year period.

Mr. Divounguy is correct when he says businesses are not charities and that they only create jobs when they think a worker will generate net revenue. Higher minimum wages, needless to say, are especially destructive for people with poor work skills and limited work experience. This is why young people and minorities tend to suffer most - which is exactly what we see in the government data, with the teenage unemployment rates now at an astounding (and depressing) 26 percent level and blacks suffering from a joblessness rate of more than 15 percent.

In a free society, there should be no minimum wage law. From a philosophical perspective, such requirements interfere with the freedom of contract. In the imperfect world of politics, thought, the best we can hope for is that politicians occasionally do the right thing. Sadly, the recent minimum wage increases that have done so much damage were signed into law by President Bush. It’s worth noting that President Obama’s hands also are dirty on this issue, since he supported the job-killing measure when it passed the Senate in 2007. When the stupid party and the evil party both agree on a certain policy, that’s known as bipartisanship. In the real world, however, it’s called unemployment.

Warning on a Go-Cart: ‘This Product Moves When Used’

For the 13th year, Bob Dorigo Jones has compiled the finalists for his annual Wacky Warning Label contest. Another, on a Bluetooth unit: “use of a headset that covers both ears will impair your ability to hear other sounds.” A few years back Jones compiled some of these into an amusing book entitled Remove Child Before Folding (from a stroller warning). For many more examples, check my blog Overlawyered, including warnings on not putting birthday candles in your ears, using your cocktail napkin for navigation, and ironing clothes while you’re wearing them.

Although regulatory agencies account for some of it, the main driving force behind over-warning is the “failure to warn” branch of modern product liability law, and the uncertainty it creates through its inability to generate clear guidance on what will and will not be considered adequate warning. Rather than invite suit – with its attendant risk of encountering a paternalistic, sympathy-driven or redistributionist judge or jury – most companies would rather include a silly or overbroad warning on the product, even at the cost of numbing consumers to the occasional warnings that really do deserve their attention.

A Soda Tax Completely, Utterly, and Totally Unrelated to Individual Choice

An interesting article in Slate today about the social psychology of “sin taxes”  and how people in general resent being told what to do. They may, in fact, react by consuming even more of the sinning item than before the nannies intervened, just to prove a point.

Unfortunately, the point of the article seems to be how to implement sin taxes – in this case, a soda tax – without annoying people to the point where the tax is counterproductive.  Something about “refram[ing]” the tax so it doesn’t tip people off as to its real purpose. The author concludes with this gem:

If we want to implement a sweetened beverage tax and maximize its effectiveness, the best approach would be to dissociate it from the larger issue of individual choice and focus on its immediate practical benefits, such as the revenue it produces. Over time, we’ll get used to it. We might even wonder why we didn’t do it sooner.

To end on a positive note, many of the comments are striking a distinctly libertarian tone.

The Sleazy Combination of Big Business and Big Government

There’s an article today in the Wall Street Journal showing how already-established companies and their union allies will use the coercive power of government to thwart competition. The article specifically discusses efforts by less competitive supermarkets to block new Wal-Mart stores. Not that Wal-Mart can complain too vociferously. After all, this is the company that endorsed a key provision of Obamacare in hopes its hurting lower-cost competitors. The moral of the story is that whenever big business and big government get in bed together, you can be sure the outcome almost always is bad for taxpayers and consumers.

A grocery chain with nine stores in the area had hired Saint Consulting Group to secretly run the antidevelopment campaign. Saint is a specialist at fighting proposed Wal-Marts, and it uses tactics it describes as “black arts.” As Wal-Mart Stores Inc. has grown into the largest grocery seller in the U.S., similar battles have played out in hundreds of towns like Mundelein. Local activists and union groups have been the public face of much of the resistance. But in scores of cases, large supermarket chains including Supervalu Inc., Safeway Inc. and Ahold NV have retained Saint Consulting to block Wal-Mart, according to hundreds of pages of Saint documents reviewed by The Wall Street Journal and interviews with former employees. …Supermarkets that have funded campaigns to stop Wal-Mart are concerned about having to match the retailing giant’s low prices lest they lose market share. …In many cases, the pitched battles have more than doubled the amount of time it takes Wal-Mart to open a store, says a person close to the company. … For the typical anti-Wal-Mart assignment, a Saint manager will drop into town using an assumed name to create or take control of local opposition, according to former Saint employees. They flood local politicians with calls, using multiple phones to make it appear that the calls are coming from different people, the former employees say. …Former Saint workers say the union sometimes pays a portion of Saint’s fees. “The work we’ve funded Saint to do to preserve our market share and our jobs is within our First Amendment rights,” says Jill Cashen, spokeswoman for the United Food and Commercial Workers Union. Safeway declined to comment. …Mr. Saint says there is nothing illegal about a company trying to derail a competitor’s project. Companies have legal protection under the First Amendment for using a government or legal process to thwart competition, even if they do so secretly, he says.