A theory of regulation.
I am working on a tentative theory of regulation. It goes like this:
- There are two kinds of regulations: custom regulations and bulk regulations.
- A custom regulation is designed to accomplish a particular goal. You want people to do something, so you write a rule mandating that they do it and punishing them if they don't. For instance, if you want U.S. companies to keep jobs in the U.S., you might write a rule to mandate that, and to "impose a 'very major' border tax on companies that move jobs outside the U.S." That is an example of a custom regulation, and it is good because it keeps jobs in the U.S.
- Bulk regulations are the kind that you buy by the yard, ones that you measure by quantity rather than purpose. They don't have a purpose, really; they are just generic "red tape." These are the regulations that presidents frequently announce they will cut in half, or freeze with an executive order. They're the regulations that come not from a reasoned desire to achieve a particular goal, but from a pure impulse to regulate. Bulk regulations are bad because they prevent businesses from doing business-y things without accomplishing anything good.
- All regulations are custom regulations.
- All discussion of "regulation" is about bulk regulations, which do not exist.
Anyway yesterday President Donald Trump met with business leaders and promised to "cut regulations" -- read: bulk regulations -- "by 75 percent." (If you want to "do something monstrous and special,"
he told them, "you're going to have your approvals really fast.") He does not seem to have gotten into specifics on
which regulations he would cut, which fits neatly with my theory. On the other hand, he did promise to impose new regulations requiring companies to keep their operations in the U.S. ("When you have a company here,
you have a plant here"), and increasing their taxes if they don't. Companies will also face new restrictions in trying to
export goods, as Trump is planning to
abandon various trade agreements. Those are of course important and burdensome
new regulations, but they are
customregulations, and so they are not covered by Trump's promise to cut bulk regulations by 75 percent. It all makes perfect sense, but you have to have a theory.
In perhaps related news, Trump announced a
hiring freeze for federal workers while he is in the middle of
hiring thousands of people to staff his administration. That sounds weird, until you realize that Trump is freezing
bulk hiring while continuing
custom hiring.
