Taking a Qualitative (Rather than Quantitative) Approach to Business and Labor Regulations

The White House today released some business regulatory revisions that are the fruition of a regulatory review the President ordered in January. When the President first issued the order back in January, I cautioned the progressive community to actually look at the order and understand that the President, like so many of his other approaches, was going at this problem with a scalpel rather than a hatchet. I said then that the far Right view that any regulation at all is bad for the economy and the ideologue Left view that all regulations are good for the public are equally dumb. Those views may help preserve our current state of political bickering, but they serve to do little else.

I call these things purposeless political fighting. The ideologues on both sides are so concerned about proving their ideology correct that they forget what the goal of that ideology is. The goal - the only goal - of regulations of business is to protect citizens, consumers, workers, and public resources such as land, air and water. Where regulations or enforcements are lacking in meeting this essential purpose, regulations and/or enforcement must be strengthened - just as the President did with health insurance regulations through health reform, the broadest and most significant financial industry regulations since the 1930s through Wall Street reform, student loan reform, credit card reform, and the nation's most significant food safety regulatory overhaul since the 1930s. But on the other hand, where regulations fail to follow this qualitative test of providing protection and serve primarily to increase paperwork, eliminating and reforming those regulations is an entirely progressive thing to do.

The White House Administrator of the Office of Information and Regulatory Affairs Cass Sunstein outlined the regulatory easing today, saying just a few dozen of the major reforms would save businesses $10 billion. As usual, the US Chamber of Commerce complained that it wasn't enough, and some on the Left complained that it was too much. At first overview, most of the regulatory review seem - at least to me - to be aimed at reducing redundancy, increasing streamlining, and eliminating unnecessary paperwork, without risking the safeguards that are the reasons we have regulations.

While liberals are justified in feeling that overall, in the last few decades, a conservative dogma of deregulation has ruled the political atmosphere, it is not an excuse to assume that any and all regulations are good just by the virtue of the fact that those are regulations. Red tape for red tape's sake should never be acceptable to the liberal frame of mind. Here is an example of what the recent changes ordered by the president will do:
Many of the new reforms focus specifically on small business. For example, the Department of Defense recently issued a new rule to accelerate payments on contracts to as many as 60,000 small businesses, thus improving their cash flow in an economically difficult time.
This should be a welcome, common-sense change for everyone. It is progressives that are the steadfast defenders of small business, and let us not get fooled by the idea that somehow the Right wingers really wanted to ease the regulatory burden on small business. In fact, if any and all regulatory costs are justified, liberals ought to be worshiping at the feet of George W. Bush, during whose second term in office the cost on small business of complying with federal regulations grew by 40%, from $7,647 per employee in 2005 to $10,585 in 2008.

So let's actually look at the regulatory changes the Administration is making, shall we? Here are just some samples. In health care, for example, while the new rules are still being finalized and more detail will be available in September, one change they are looking to make is allowing doctors and nurses who provide Telemedicine services (in rural areas where hospitals are less accessible) under Medicare, to be credentialed at just one of the hospitals rather than all of the hospitals that may operate a moving medicine clinic as a group. The FDA is proposing regulatory changes to increase electronic reports and submissions from drug companies.

Labor department regulations seek to streamline worker hazard training and information, easing the process for both the employer and the employee, and making the regulations easier to follow and to understand. Oh, and it eases the regulatory burden against unions:
The Department intends to review questions of law and policy related to changes made to the Form LM-30 in 2007. The Form LM-30 (Labor Organization Officer and Employee Report) is required by the Labor-Management Reporting and Disclosure Act (LMRDA). The proposed revision would simplify the Form LM-30, reducing the number of pages from nine to two. Also, under the proposed rule, labor organization stewards will not have to complete the form and bona fide loans will not have to be reported. OLMS plans to finalize this rule in August 2011. The 2007 Form LM-30 estimated that there would be 6,916 labor organization officer and employee filers, while the Revised Form LM-30 estimates that there will be 1,932 filers, a reduction of 4,984 filers. The 2007 Form LM-30 also estimates that filers will spend 120 minutes per form on reporting and recordkeeping burden (or 829,920 total minutes for all filers), while the Revised Form LM-30 estimates that filers will need 90 minutes (or 173,880 total minutes), a 30 minute reduction in time needed to file the report per filer (or a 656,040 reduction in total minutes, or 10,934 hours, for all filers).
Oooh, how horrible to reduce the regulatory red tape on organized labor, so that they can spend more time, you know, organizing labor. Recall that another recent proposed rule by the Department of Labor is on track to reduce the regulatory burden on unions in order to put unionization votes on a fast track.

The White House summary of the changes list what is coming. But perhaps the most important part is this: this is not a one-time thing. Just as in life, things that work today may not work tomorrow. Ten years ago, the primary mode of communication for membership organizations with their members was postal mail. Today, communication has evolved to email, social networks, blogs, websites, and even mobile apps. Likewise, the regulatory framework must also adapt to a changing world, advancing technologies and new ways of thinking. In all of it, we must always keep the goal of regulations in mind: which is once again to protect workers, consumers, competition, citizens and public resources.

Stale, ideological ways of simplistic thinking along the lines of "more regulations = good" and "less regulations = bad" (or vice versa) does not work. When it comes to an efficient and activist government, and especially to regulations, a quantitative outlook often distracts us from a qualitative evaluation. It is this temptation we must avoid.



UPDATE on Series: I know I had promised a series on the regulatory changes proposed here. In reading the documents, however, I see that these are generally plans to move forward with making regulatory changes, not regulatory changes in and of themselves. Doing a series on the  plans would not be all that enlightening. I will instead cover the regulations as they are released in draft or final forms to meet the goals set out in those plans.