Heeding the message of the electorate

Democrats on Tuesday received the worst drubbing, nationally and locally, suffered by either political party in more than half a century. This battering of epic proportions, primarily a repudiation of the economic policies and high-handedness of Barack Obama, Nancy Pelosi and Harry Reid, was also an implicit condemnation of a left-wing regulatory philosophy that unnecessarily burdens those who create jobs and wealth.

In his stunningly clueless press conference on Wednesday, the president admitted that “America succeeds only when business is succeeding” but rejected any hint that his administration’s policies are excessively regulatory or anti-business, and he dismissed a major redirection of policy. Once again, he attributed the electoral meltdown to failures in process and communication and seemed oblivious to the linkage between personnel choices and policy directions.

Many federal agency policies are not only ideological and unwise but do violence to Americans’ life, liberty and the pursuit of happiness, to coin a phrase. The Democratic Congress often not only failed to investigate such policies but actually encouraged them. With Republicans in control of the House, we should now see pressure on executive branch departments and agencies to curb their excesses and adopt more constructive approaches.

How can we identify the worst of the excesses and flawed regulatory policies? Federal agencies are required by presidential executive order to prepare a regulatory impact assessment in support of any economically significant regulatory action, an important component of which is a benefit-cost analysis. Nevertheless, because politics and special interests (including regulators themselves) often prevail, all regulations are not created equal, not even remotely equal. Some serve society — and taxpayers — well, while others are so wrongheaded and costly that they are actually harmful.

Office of Management and Budget (OMB) analyses of major regulations often show wide disparities between benefits and costs. For example, nutrition labeling of meat and poultry yields benefits of $1.75 billion against costs of $245 million, while wind standards for manufactured housing have benefits of $79 million but cost $511 million and standards for double-hull boats yield benefits of $15 million but cost $641 million.

The Environmental Protection Agency fares badly in OMB analyses. Of the 30 least cost-effective regulations throughout the government, the EPA had imposed no fewer than 17. For example, the agency’s restrictions on the disposal of land that contains certain wastes prevent 0.59 cancer cases per year — about three cases every five years — and avoid $20 million in property damage, at an annual cost of $194 to $219 million.

In order to revise many of these government policies and programs, we need personnel changes — which could be accomplished, literally, overnight. Most important federal government business is conducted not by the handful of cabinet-level officials, but by those at the next rung who occupy senior positions at the myriad departments and agencies and perform pivotal day-to-day decision- and policymaking. Few of these appointments require congressional confirmation; the incumbents serve at the pleasure of the president. They seldom receive much public or media attention, but they are critical, especially at “gatekeeper” government agencies such as the FDA, EPA and USDA, which must approve products such as pharmaceuticals, pesticides and genetically engineered plant varieties before they can be marketed.