Reversing the Ratchet
2020-08-05 · Guest: Ryan Young (Senior Fellow at CEI) · 52:01
Government response and regulatory barriers during COVID-19
Bob Zadek and Ryan Young of the Competitive Enterprise Institute discuss the government’s response to the COVID-19 pandemic, focusing on how regulatory barriers exacerbated the crisis and how spontaneous individual action was often more effective than top-down mandates. They explore the concept of “flash policy”—hasty legislation passed during crises—and the long-term benefits of permanent deregulation.
Topics: COVID-19, deregulation, flash policy, occupational licensing, telemedicine, Competitive Enterprise Institute, economic recovery, administrative state, public choice theory
Speakers: Bob Zadek, Ryan Young
The Government’s Role in the Crisis [00:18]
Bob Zadek: Good morning, everyone. Welcome to the Bob Zadek Show, the longest-running live libertarian talk radio show on all of radio. The show this Sunday and always of ideas, never once the show of attitude. Thank you so much for listening this Sunday morning.
How much of the crisis that we are enduring, broadly described as the pandemic virus—but the crisis is perhaps more so an economic crisis than a health crisis—how much of the crisis was, as they say in sports, an unforced error? How much of the crisis can be laid, or the extent of the crisis can be laid, not at the foot of a little virus, but at the foot of a large government?
Is it unfair to just place the blame or a portion of the blame on government without starting to foam at the mouth and sound like an anarchist and just blather on about “government is bad” and “get rid of government”? This is not that type of a show. But we have to understand. We have to understand where the mistakes lied, because as informed voters, unless we understand, we don’t know how to use the treasured vote, the use of the ballot box, to fix what’s wrong. After all, if government is at fault, then we are at fault because we are responsible for the government that governs over us.
So, this morning’s show, we will try to understand how government is at fault and therefore we are at fault, so we as informed voters can understand the process and we as informed voters can fix it. That’s a challenge. And to help us get through this challenge, I’ve invited back to the show this morning Ryan Young. Ryan is a senior fellow at CEI, the Competitive Enterprise Institute, a very important think tank which does remarkably good, effective, objective work in the area of regulatory reform. This is Ryan’s portfolio: regulatory reform, trade policy, also antitrust regulation. Ryan has hosted the CEI podcast called “The Week in Ridiculous Regulations.” And perhaps if we ask Ryan really nicely towards the end of the show, Ryan will share with us some of those very ridiculous regulations that he was happy to bring to our attention on the blog that he worked on. Ryan has an MA in economics from George Mason University in Virginia, and his personal blog is “Inertia Wins.”
Ryan will help us understand to what extent can the responsibility for the extension of the current crisis—and remember, crisis is far beyond merely a health crisis; it is an economic crisis, it is a political crisis, so crisis is writ large as we use the phrase this morning—how much can the responsibility for the crisis be laid at the feet of government, which means at the feet of the voters? After all, we put them in office and we have to learn from our own mistakes. And what good can come of this crisis? Because I strongly believe that on the other side of the crisis, it’s all good and little is bad. Ryan, welcome to the show this morning.
Ryan Young: Bob, thank you so much for having me. That is a very broad opener right there.
Bob Zadek: It is, isn’t it? So I can now go about my day and leave you alone on my show and you can respond for an hour. So that, Ryan, was an opening but not a question. That would be an unfair question. So let’s start with drilling down a little bit from the opening premise. So we had a virus—not the first time on earth we have had a virus. And the next event is government reacts to the crisis, and in reacting to the crisis, we experienced what you have often referred to as the enactment of “flash policy.” So tell us about the process by which government reached that conclusion, if you want to assign a somewhat rational approach. What was the thought process by which the lockdown was enacted, and what about that from the standpoint of government controlling the behavior of us citizens?
Ryan Young: It wasn’t government that started the lockdown. People did. Once people learned about what it takes to flatten the curve and what physical distancing and wearing masks can do, people started doing it. And frankly, that’s been much more helpful than any mandate that came along later. Politicians in different states have reacted differently. Some have come down with very severe mandates, others, depending on the situation, arguably not severe enough. But government isn’t in charge here. I mean, at a fundamental level, the virus is. But ordinary people like you and like me are the people in charge of how we choose to respond, whether or not we choose to think of people in our lives who are vulnerable to the virus, whether due to age or being in a high-risk occupation or due to a health condition. It’s up to us to decide whether or not we wear masks or observe physical distancing. And ultimately, what politicians do is they see which way, which direction the parade is headed, and they scramble to get to the head of that parade. They’re not really leading; they’re following.
The Common Law of Pandemic Behavior [07:43]
Bob Zadek: And what’s really significant in what you just said—it almost sounded like you were stating the obvious, but you were not. You were stating something far more profound than that. The history of laws in our country, and indeed in England from which we derive a lot of our legal system, is that we had something called the “common law.” That is, we had people behaving in a society in a certain way, and it evolved not by legislation, but by people observing behavior that certain things were wrong. It was wrong to steal, it was wrong to kill, etc. And without the passage of laws, those acts society determined were wrong. And it was not one person or several people; it was millions and millions of people interacting that the law evolved.
And then, late in the game, statutes were passed, not to alter behavior, but to put the force of government behind behavior, behind norms that millions and millions of people, not meeting each other, concluded was the right way. So laws merely codified what people learned through their behavior. And Ryan, that sounds like it was sort of the common law of behavior in a pandemic. People learned, they were given information, yes, and they processed the information and reached the conclusion. And I think the beauty of the process was the conclusion that people reached was first of all freely arrived at, and second of all, it fit their circumstances. Isn’t what you said simply: do you like “one size fits all,” or do you like every individual, armed with good information, using that information in a personal way that fits their lifestyle? Isn’t that what you have said?
Ryan Young: That’s exactly right. And in fact, there’s more to the story. This is a new virus. It’s called a “novel virus” for that reason. We’re still learning about it. We’re still adapting to it. And it’s an ongoing process. And when you’re dealing with trial and error, a big part of trial is error. So people can make mistakes and learn from them and adapt to them much more quickly and, frankly, on a much more mass scale than can Congress or a governor or a state legislature. So in a way, it’s also for safety that while I’m in the odd position of being very pro-mask and pro-physical distancing, I also tend to oppose government mandates for those things.
The “Never Needed” Deregulation Campaign [13:09]
Bob Zadek: And in the process of government now imposing the lockdown, which, as you have observed, Ryan, the lockdown was in effect codifying the behavior of individuals applying hopefully accurate information which they got from the government and from other sources—they processed it not in a self-destructive way, in a way that fit them. So we have the government imposing the lockdown. Now, Ryan, one of your sweet spots is, of course, regulation and economics. And the kind of underreported story, Ryan, that I’d like you to comment on is that implicit in the government’s decision to impose a lockdown, which means shut down the economy, the government made a massive, massive, crucial decision that in weighing two existential circumstances that affect society—economic life and health—the government decided, without any discussion, health trumps economic life. As opposed to taking one step back and saying, “No, it’s not health versus economic. It’s which has the overall least adverse effect: shutting down the economy or allowing people to work, suffering the health consequences because the economy is overall more important?”
So speak to that I think underreported issue of the process by which government seems to have decided that the only consideration is health and the economy will take care of itself later. And if you can, put that in the context of how our country has treated economic rights over time, because economic rights took a clear backseat during this lockdown phase.
Ryan Young: Well, the first thing they teach you in economics is that tradeoffs are everywhere. And what we’re seeing here isn’t exactly a strict tradeoff. It’s not the economy or health. You can have a little bit of both. And in fact, we’ve seen government do some good things in getting rid of policies where those policies were, in fact, harming both with no benefit. In fact, CEI, where I work, has a whole campaign called the “Never Needed” campaign, where we’re highlighting all the rules that government has gotten rid of during this crisis that did no good.
Regulatory bans against telemedicine, which were already on the books for no reason—those were gotten rid of early on after COVID hit, and they’ve had immense benefits, and they might, in fact, change the way people get healthcare forever and for the better. So far, at state, local, and federal levels, they’ve gotten rid of about 850 regulations like that: permit regulations for restaurants, rules against remote learning for schools, those sorts of things that have no benefit. Occupational licenses, which are required for nearly a third of all American workers—we’re seeing those erode, perhaps permanently. And that in a way, that kind of response is heartening. Of course, there are 1.1 million regulatory restrictions in the Code of Federal Regulations; state and local are extra. So the more attention we can pay to that, the more we can have a regulatory state in public policy that benefits both health against the virus and economic growth and recovery.
Shortages and Regulatory Barriers [14:49]
Bob Zadek: Now, I’m glad you mentioned the area of regulations that with remarkable speed and effectiveness were simply dismissed as being—this was not the political word, but this was the de facto word—these regulations were dismissed as being counterproductive and quite stupid. And what happened was—well, let me take a step back. I have observed that the activity that our government is the best at—the best, it knows it has no peer—and that is in creating shortages. Oh my goodness, are we good at creating shortages, including shortages in this case of skilled healthcare providers.
So, Ryan, you mentioned just briefly, and I want to drill down a bit, the types of regulations that had the clear effect of creating a shortage, and now when we needed desperately healthcare workers, we had to un-create the shortage and create an adequate supply. So tell us a bit, because you mentioned them briefly, drill down just a bit and tell us some of the key regulations that Governor Cuomo and other governors—and I’m not just singling him out, but he was so much in the news that his name has to come to mind pretty quickly—that they found these regulations interfered with providing healthcare and had to be dismissed. And they were by executive order—ugh—they were suspended. So tell us about the suspension by executive order and what some of these regulations were in a bit more detail, how they created a shortage, and how quickly and easily it was to get rid of that rule during a time of crisis so that we had an increased supply of what we desperately needed.
Ryan Young: Sure. And it’s not just people that were lacking in the healthcare field; it’s supplies. If there’s one thing the American economy is good at, it’s creating lots of stuff. If Washington creates shortages, people and entrepreneurs try to address those shortages, and they’re very good at it. The problem is regulations can get in the way. So for example, we have trade barriers against importing face masks and latex for gloves and all kind—you name it. The tariffs in the US have doubled in just the last three years. And easing tariffs and quotas and other restrictions can go a long way, and in some cases already has, to easing equipment shortages.
Other businesses are retooling from completely different applications. There’s a company in New York called D’Addario, and one of the things that they make are drumheads for drum sets, the plastic skins you put on the drums and you bang on. They retooled their factory away from making those and using that same sort of plastic to make face shields for healthcare workers. And in a lot of places, if you want to do that, or convert your, say, your distillery over to making hand sanitizer, you need permits and you need a lot of them. And in some cases, you will have waiting periods of 45 days or 90 days. We don’t have that kind of time. There’s a crisis on. So easing those kinds of regulations in a lot of cases has saved lives.
Occupational Licensing and Telemedicine [18:33]
Bob Zadek: Now, you mentioned quickly the regulations barring healthcare workers, which is a licensed activity in probably every state, but certainly most states, from practicing their profession in another state, even though the state that awarded them the license might have had the exact same licensing regime as the state where they now want to work. So we had those regulations which kind of seem pointless. Do we not trust New Jersey’s regulatory regime in being able to select competent doctors to hold a license? Putting aside whether a license should be needed at all—that’s another show—but is New York really skeptical that New Jersey does an inferior job in licensing its physicians, treating New Jersey like a third-world country? So tell us a bit about those licenses and how they prevented the influx in New York, for example, of healthcare workers because they didn’t have the license, and how quickly and easily it was to get rid of that rule during a time of crisis.
Ryan Young: I don’t think those licensing regulations were motivated by health. I think they were motivated by doctors wanting to restrict their competition. When your services are scarce and there’s a shortage on, you can charge a higher price. That is, I think, the primary driver behind a lot of those restrictions, and not just in healthcare. It can be in law, it can be in occupations like cosmetology or barber shops, decorating. Even the funeral industry has its state-based licensing regulations. These are rarely motivated by public health and nearly always essentially a protectionist racket for the people involved so they can limit their competition. And it turns out that when you get rid of those regulations, that turns out to be true. It benefits consumers, prices go down, and in a situation like we have now with COVID-19, people who need it desperately can get access to the healthcare that they need. That’s a regulation with almost no downside and a whole lot of upside. So the more of those we see, the better. And I think New York deserves praise for getting rid of—and a lot of other states—for getting rid of those regulations.
Bob Zadek: You also mentioned quickly the bar against telemedicine. Now, telemedicine is nothing other than a doctor’s appointment being transacted through the telephone or online rather than face-to-face. Now, how—why in the world would anybody care if the doctor feels he could competently advise a patient and the patient is comfortable with the quality of the advice and the whole experience? Why would anybody in government care about whether telemedicine is conducted or not? How could that possibly have a serious public interest? And if not, you’re invited to be skeptical, Ryan. Why do you imagine there was this regulatory ban interfering with the doctor-patient relationship, this regulatory ban just saying, “No, willing buyer, willing seller not enough, we forbid it”? How did a ban like that—what could possibly be the motivation?
Ryan Young: The reason is privacy. The federal standards are called HIPAA. I forget exactly what the acronym stands for, but they’re very strict privacy rules and they’re intended to protect the confidentiality of patient-doctor interactions as well as medical records. Under those regulations until now, telemedicine could only be practiced if both doctor and patient were on sufficiently secure connections, not using either of their personal equipment. The trouble with that is that doctor and patient know best, not HHS or the FDA. So that relationship was reversed. Patient and doctor should be in charge, not the regulators. And when COVID hit and it was for a lot of people, especially people with compromised health or who were vulnerable to the virus for some other reason, visiting your doctor in person would be riskier than not going to the doctor at all. That’s not a tradeoff anyone should have to face. So regulators were very quick and deserve a lot of credit for getting rid of those regulations.
In another area is Certificate of Need laws, where if a hospital wants to expand its facilities, build a new cancer wing or a children’s wing or this or that, they can’t just do it. They have to get permission and prove that the area needs it before they can build it and start helping people. Again, that should be a doctor and patient and hospital decision, not a decision coming from Washington or from a state capital. And those regulations have also been started to be eroded recently, and I think that’s all for the better.
Bob Zadek: If you want to be a little bit cynical, you might also throw into the mix in so far as telemedicine is concerned the fact that doctors can treat many more patients through telemedicine than they can through appointments. There’s just the physical problem of getting there, sitting in the waiting room and the like. And the fact is that insurance companies would have to cover more incidences of these appointments. And by prohibiting telemedicine, the insurance companies—if you want to be really cynical, and this is not a database conclusion—if you want to be really cynical, you might observe that this was a provision that also benefited the insurance companies who had to pay out less for doctor visits because a doctor couldn’t treat as many patients. That’s being a bit cynical, but I think somewhat realistic.
The Rise of the Regulatory State [24:51]
Bob Zadek: So now we have all of these regulations. Now, in our political ethos in our country, Americans were historically—perhaps not so much anymore—were historically self-reliant and felt they were, they had the agency and they were in charge of their own lives. With the advent of the regulatory state, with 1.1 million regulations and counting, and counting very fast, that agency of control over one’s life is transferred from the individual to the state. Now, since that’s so violative of first principles in our country, how did we get here? How did we get so reliant upon the regulatory state? And do you see this as a long phase? Is this a trajectory that will never end? And does the experience of COVID and the discovery that these regulations really are counterproductive—do you see any optimism that maybe America collectively can reverse the tide of these regulations? How did we get here and what do you think is likely to happen through the lesson of the virus?
Ryan Young: I do see what we’ve seen as the increase in centralization of things as a long-run trend and a trajectory that’s been repeated often in history, including in this country. At the same time, I don’t think it’s inevitable, and in fact, I see a lot of reasons for optimism. There are two main reasons for this.
One is psychological. People don’t see things as being effective unless someone is behind them. There’s someone doing the planning, there’s somebody in charge, somebody is pulling the levers. People just psychologically do not tend to trust the common law approach that we were talking about earlier, when people were starting to lock down all by themselves when they realized what was happening with COVID. People want strong authority figures. It’s comforting, it’s visible, instead of the “invisible hand.” And people seem to want that, and that’s why you see even in relatively liberal places, over time you tend to see more and more centralization as people move public policy from areas they don’t trust to areas where they do trust. This is often not a wise decision, but it’s a tendency that we have as a species. We evolved that way.
The second reason I think is political. We see a tendency for even within government, policy tends to move from local jurisdictions on up to the state level and on up to the federal level. And even inside the federal level, policies tend to move from a branch like Congress over to more centralized branches like the executive. One reason for that is that congressmen face election every two years or every six years. But if they can shift policy over, or they can shift blame for a policy over to the executive branch or agencies that never face election, they can take credit for a bill they passed, or if it backfires, they can shift the blame over to the agency. So they have an incentive to behave that way. So long run, this is a trend, but I also think it’s not inevitable.
Bob Zadek: And what’s really important and I want to just emphasize it if I might: that being in Congress must be a really good job. The pay isn’t that great, but there must be a lot of perks because an awful lot of people—kind of mediocre people at that—sort of want the job. So there must be some profound psychic and other benefits in that job that you fight very hard to get it and fight very hard to keep it, which is kind of scary. The fact that people are fighting so hard just for the right to rule me kind of scares me, because the ones who win are the ones who wanted it the most, and they are the ones who really wanted to rule me. And that’s kind of scary because we end up with the people who crave the power the most end up being in office. That’s for another show and that’s psychologizing. Let’s pass over that issue.
But the fact is, once you’re in Congress, you want to keep the job. And the best way to keep the job, to use a non-political concept, is not to get yelled at that much. If nobody is angry at you and you didn’t do anything wrong, you’re going to get to keep the job just through inertia. Therefore, Congress can pass a law that says, “I voted for a law that says the water must be pure and the air must be clean and not harmful.” That’s a great statute. Now, how do you get it done? Well, Congress says, “We assign the authority to get it done to the EPA.” So now the EPA is given the task of making the water pure and the air clean. And they are the ones who pass the regulations, who actually prohibit individuals from doing or forcing individuals to do something. So all of the heat is directed to the unelected regulators. And Congress says, “Don’t yell at us, we passed the Clean Water Act or the Clean Air Act. We did the right thing. Yell at the executive branch.” And the executive branch is not all that concerned because the regulators are unelected, faceless, and nameless. So the president can simply say, “Well, gee, the regulatory state is kind of hard to control. They’re bureaucrats, they have the benefit of civil service.” So nobody has the responsibility. So the dynamic really is the perfect petri dish to allow this system to continue.
Mistake Leverage and Flash Policy [31:31]
Bob Zadek: And the danger—and Ryan, I’d like you to help us understand this—when you have the decision, for example, with the virus, whether to go to work, whether to go to a restaurant, whether to wear a mask, if the decision is personal, then if I make the wrong decision—putting aside the side effect of my harming somebody else, which of course I should not do—but if I make the wrong decision, I have harmed myself and perhaps those people in my immediate sphere of influence, my family. If government makes a mistake—witness the lockdown—it profoundly affects tens of millions of people. So we have, Ryan—I’d like you to speak to this—this what I’ll call “mistake leverage.” A mistake made by government is far more drastic than a mistake made by individuals. So if individuals are allowed to make their own decision, they will collectively discover what works and doesn’t work. I know you have written about this. Help us understand this dynamic about why we want to limit the power of government because of the leverage effect if they get something wrong.
Ryan Young: Yeah, one of the most important lessons of designing a good government is to limit the amount of damage that one individual can do. If you can limit that power successfully, you will insulate a lot of people from a lot of harm. If you or I were to go somewhere recklessly and either catch COVID or spread it to someone else, that is limited to a fairly small circle. Not only that, but we would also—it’s much easier to make us responsible for what we’ve done. Under a system like we have with so much power concentrated just among a few people in Washington, and with over the last many decades—not to single out the current administration—but with the growing prominence and authority that the presidency has been granted for many, many decades, that sound lesson in public policy—limiting the amount of damage that one person can do—is being ignored. And I do not think that’s healthy in the long term. I think people really need to look not just at getting rid of this or that regulation that’s been doing harm; you need to take a close look at the system that makes those rules possible in the first place and that continues to generate them. And absent reform, it will continue to generate them and make us vulnerable to the next crisis whenever that hits.
Bob Zadek: With that recognition—and when we talk about governmental power, it’s the power to make a really bad mistake. Wow, that’s a big power. As opposed to if the government doesn’t have that power, we have now become protected from really bad mistakes. And if you say the corollary, “Well, but that’s also taking away the power to do really important good things”—well, but individuals—that assumes individuals cannot do good things without the government, without the government’s help, which is, as I said at the outset of the show, the wrong premise. Individuals by and large have shown over all of recorded history they figure it out. Now, it might be slower, but as Ryan pointed out, through trial and error—but the error is individual—through trial and error, individuals get it right. And the fact that it takes longer—well, the detriment of it taking longer is more than offset by the detriment caused by a serious error.
And Ryan, you have written about the conflict, if you will, or the decision-making between social norms, decisions being made by the behavior of collectively tens of millions of individuals acting individually—the norm, the social norm decision-making versus decision-making by government and the pressure upon government to act promptly. You have used the term “flash policy” describing that pressure of government to do something. And when the government is required by whatever to just do something, history shows us that the pressure to do something, albeit with incomplete data, causes disasters. And remind us, Ryan, of some of these what you have called flash policy decision-making where it’s simply nothing other than the pressure of doing something immediately and without the luxury, because the public doesn’t think you have the time, to be thoughtful. So just remind us all, if you will, Ryan, of these important decisions made through the operation of flash policy.
Ryan Young: Yeah, I’d be happy to. There are lots of examples, including some current ones. A lesson that we need to keep in mind is that we’re making these policies not with the government that we want, but with the government that we have. Yes, it is possible for government to enact sound policy that does a lot of good. But that’s in an ideal model. With the government that we actually have, that is a lot less likely. And even if we do pass sound legislation, a lot of people have the incentives to execute it badly or corruptly. We have to keep that in mind just as a bit of realism when we think of what policies we want to enact.
But “flash policy” is a term my colleague Wayne Crews actually coined the term, and I think it’s a beauty, so I’ve been using it a lot too. It’s policy that during a crisis is made in great haste with little thought, as quickly as possible. People enact flash policy when they are scared. After 9/11 hit, Congress passed the Patriot Act in, I believe, three days, maybe a week. I forget exactly how long. That’s a classic flash policy that gave us the Department of Homeland Security as we know it today, with the NSA and the TSA. It gave us two wars that we’re still in, at least to some degree. The financial crisis of 2008, we got stimulus bills, we got the Dodd-Frank financial act, other classic examples of flash policy.
Bob Zadek: And TARP.
Ryan Young: And TARP, yes, good one. Right now, we’ve seen three bailouts or three stimulus bills. A fourth is being negotiated right now and actually being enacted via executive order, which is further centralization of government. This flash policy is what happens when people are scared, and it’s really something that we need more institutional-level safeguards so that things like that cannot happen, because we do have the government that we have, not the government that we want. And we have to keep that in mind to prevent flash policy from harming both the virus response and the economic recovery.
Bob Zadek: So flash policy has as one of its hallmarks—there are two characteristics that I take away from your explanation. One is it’s policy that is dramatic, done in great haste, and done because people are scared and just want their government to do something. And I will then supplement that by saying: do anything. Just do something. Don’t just stand there, do something. And those are the attributes of flash policy. Now, I think this may be a stretch, but I think given your definition of flash policy, the entire New Deal was flash policy. The flash was over years, but it had the same attributes. People were scared, they wanted government to do something. The government took advantage of the opportunity, the clamoring for government to do something, and the fact that what they were going to do would require the dramatic reordering of government—well, nobody objected because the government had to do something. So without any regard to whether what they were doing was effective, without any regard to whether it compromised first principles of our country, that was subordinate to “do something.” Is it a stretch to say that the entire New Deal, which got us where we are today to some degree, was flash policy with a de-emphasis on the flash?
Ryan Young: It’s not a stretch, but Herbert Hoover also deserves a lot of the blame for this. In his administration, 1928 to 1932, so the first three years of the Depression were on him—or under him, not on him—he doubled federal spending in real terms. There was deflation, so if you look at the dollar amounts, it looks less than that, but when you put it in real terms, adjusted for inflation, he doubled the size of government in four years. He also signed the Smoot-Hawley Tariff bill in 1930. That raised tariffs to some of the highest levels seen in American history. It instantly decreased exports by 15% with much longer-lasting effects that shut down foreign commerce, imports, exports, did a number on the economy, made the Depression worse. And FDR actually campaigned against that Hoover-style flash policy, saying, “I will bring a calmer, more restrained approach to the White House.” And then when he was elected, he saw that people wanted the flash policy. And he took the same approach where “something has to be done, let’s do something.” And a lot of the New Deal policies, when you look at them, you find that some of them actually contradict each other. They would give farmers price controls, which made food more expensive on the one hand, and on the other hand, they would give price breaks to consumers and subsidies to pay the higher prices. Those two policies cut against each other. And what you find is essentially they’re trying to throw spaghetti at a wall just out of flash policy fear and seeing what stuck. And most of it didn’t, and that’s the kind of harm—and it also caused long-running institutional changes in government with greater centralization and greater executive power that we’re seeing the fruits of today. So we really need to be cautious against flash policy and rethink our institutions of government to restrain the executive branch and to restrain federal power.
Long-Term Optimism [45:27]
Bob Zadek: The lesson—a hard lesson, and we don’t quite reach every single American with this podcast, but would that I did—the lesson is, when we are in periods of crisis, the instruction that Americans should give their government is: Stop. Think about it. Make the case and tell us what you propose to do and let us debate it. Yes, time is passing, and meanwhile we will muddle through. But when you come up with an all-points-of-view, thoughtful decision, let us know and we will tell you if we approve it. That voters should instruct government: do not fix it immediately, but go slowly. We want it done right. We will subordinate speed to effectiveness, to cry out for effective government, but do not make a mistake. Follow the Hippocratic oath of first and foremost, do no harm.
Now, what do you see, Ryan, as you have to as an observer of economic life in America and governmental relationship of governments to people—are you more optimistic, neutral, or less optimistic about the longer-term lessons to come from the experience of the kind of botching of this whole pandemic affair by government? Are you somewhat optimistic that we will collectively learn from it, or is it not much positive to look forward to?
Ryan Young: In the long run, I’m very optimistic. In the short run, less so. I don’t have great confidence in Washington to enact policy that is in the public interest, both for reasons that they don’t have the incentive to and for reasons that even if they did, they’re not necessarily capable of it. But in the long run, you have entrepreneurs creating new technologies. I think of Zoom, for example, which maybe six months ago nobody had heard of. And all of a sudden, as soon as lockdowns hit, out of nowhere this new service that someone came up with based on new technology instantly displaced giants like Skype and other video services. And that enabled people, a lot of people, to work from home or to educate their children from home, to connect with friends and family and coworkers. Those kinds of ideas are a constant throughout the economy and throughout history.
When you think in the big picture, people used to live worldwide on an average of three dollars per day. There were things like no electricity, no sanitation. Now, almost nobody lives in that kind of poverty. In fact, depending on what kind of metrics you like to use, people today are 10 times, 30 times—not 10 or 30 percent, 10 or 30 times—wealthier. This is a long-run process over two centuries. It shows no signs of stopping regardless of what current flash policy is going to do. So I see some setbacks in the short term, but in the long run, I think liberal institutions and the power of people is going to do more good for humanity in the long run. So I’m a long-run optimist.
Ridiculous Regulations of the Week [48:01]
Bob Zadek: Ryan, as we near the regretfully the end of our hour together, I cannot control myself. You have edited and written “This Week in Ridiculous Regulations.” Now, talk about—oh my goodness, what a lot of low-hanging fruit. Share with us, so we can end this hour together with a smile on our face—a somewhat cynical smile, but a smile nevertheless—tell us about some of the ridiculous regulations that when you are hanging around with your buds and trading ridiculous regulation stories, what are some of the ones that you share with your friends?
Ryan Young: Oh my goodness, I’ll give you a preview from Monday’s edition, which won’t run until tomorrow, so this is a sneak preview. The FAA just issued its 116th final regulation for foot-launched hang gliders, which I don’t know why they need to pass so many regulations for those. This is only since 1994; anything before that is not on the books. The federal government also has a National Dairy Research and Promotion Board. The USDA just passed a new regulation regulating requirements for membership on its board. And the third one I’ll give you and the last one I’ll give you is squid specifications.
Bob Zadek: Squid?
Ryan Young: Yes, as in the sea creatures. They must have—for the Illex squid species, they must have certain specifications if people are going to catch them at sea.
Bob Zadek: And so this is what—if you take these ridiculous regulations and project them out—remember we have 1.1 million of them—this is where our tax dollars go. Now, how much of us, if we were sitting at the appropriations table, how many of us would say, “Yeah, that’s a good use of our money, let’s go for it. In fact, let’s over-regulate the squid”? Now, does a squid get shot if it flunks this regulatory test, or is this only a classification issue for the squid?
Ryan Young: It’s things like catch size, coloration, things like that. There are different ones for different species. But none of this stuff shows up on the federal budget. So for Congress, it essentially costs us to regulate something instead of just spend money on it. They can just require you to do it and to pay for it. So it’s a very sneaky way, and we get about 3,000 of these regulations every year, brand new.
Bob Zadek: So Ryan, how do our friends out there follow your work? Because it’s both fun, instructive, educational, and important for anybody who really wants to understand how our government operates. How could our friends follow your writing, please?
Ryan Young: The Competitive Enterprise Institute’s website is cei.org, and we have a special COVID project, the “Never Needed” campaign. If a regulation isn’t needed now during a crisis, it was never needed in the first place. There is information on that at neverneeded.cei.org.
Bob Zadek: And “Never Needed” probably applies to a tad less than 1.1 of the million of the regulations. So “Never Needed” is a good way and a good theme to end this show. So Ryan, they are and never were needed. Let’s hope we can rid of them. Ryan, thanks so much for joining us again on your show. Please, keep up the good work. And thanks for all my friends out there. I’ll be back again sure as anything next Sunday. Have a good weekend.