The average American family pays about $11,000 a year in federal taxes, but many families pay an even larger amount in a hidden tax called Regulation. The cost of burdensome federal regulations is estimated to be between $8,388 and $17,134 per household, and new regulations are increasing faster than ever before.
Oh, Thomas Jefferson, where are you when we need you? The great words he penned in the Declaration of Independence are even more apt today: “He has erected a multitude of new offices, and sent hither swarms of officers to harass our people, and eat out their substance.”
Since all federal regulations must be published in the Federal Register. it provides a handy method to record the trend in regulations. The all-time high was reached in 1980 when the Register had 88,000 pages. Under Ronald Reagan, they declined to 47,418 in 1986. In 1991, the Register was back up to 67,715 pages.
Most of the regulations started out with worthy goals. Despite the expenditure of enormous sums of money, however, their track record in achieving their objectives has been dismal.
Numerous think-tank studies have found no significant, improvement in workplace accident rates, worker injuries, or illnesses from OSHA (Occupational Safety and Health Administration) regulations. Other studies have found no reduction in the proportion of unsafe or ineffective drugs reaching consumers as a result of the Food and Drug Administration’s drug approval process.
Studies have found that the biggest effect produced by the Consumer Product Safety Commission, in industry after industry, has been to raise priees, not to improve consumer safety. Examples of products where this is true include matches, mattresses, and bicycles.
For example, government standards have had no measurable effect in decreasing bicycle-related injuries, but regulations have driven up the price of bicycles to U.S. consumers and reduced their options. One study suggests that the real purpose is to make it more difficult for foreign bicycle producers to compete in the American market.
The Corporate Average Fuel Economy (CAFE) regulations show how costly unforeseen adverse consequences can be. The law requires that all auto manufacturers selling new cars must meet a federal miles-per-gallon standard for the average of all its cars.
The required figure for 1991 was 27.5 miles-per-gallon. But, as auto manufacturers reduced the size and weight of their cars to meet this standard, they also reduced the crash-worthiness of their cars.
A recent economic study found that CAFE is responsible for several thousand additional fatalities resulting from accidents over the life of each model-year’s cars. The authors calculate that reducing the weight of American cars to meet the CAFE standard of 27.5 miles per gallon is costing the nation between 2,200 and 3,900 lives, plus 11,000 to 19,500 serious injuries, per year than would have occurred without the regulations.
The costs of federal regulations, which include attorney and accountant fees and staff for paperwork and negotiation as well as direct expense for compliance, are disproportionately unfair to sma1l companies. One study suggests that EPA and OSHA regulations actually benefit large, unionized firms because the regulations are so much more costly to their small-firm competitors.
How much Americans like airline deregulation is manifested in the figures: Americans took 254 million flights during the last year before deregulation, and because of lower prices, greater choices, and more frequent flights, took 453 million flights in 1989, an increase of 78 percent. Meanwhile, carrier insurance rates fell 22 percent, a sure sign that the marketplace thinks deregulated air travel is less risky.
Murray Weidenbaum, director of the Center for the Study of American Business at Washington University in St. Louis, estimates that the 1991 Clean Air Act will cost an additional $25 to $35 billion a year on top of the $100 billion we already spend annually on pollution controls.
The Americans with Disabilities Act, which is just now going into effect, will require private businesses, apartment buildings, restaurants and stores to spent enormous sums of their own money to provide mandated benefits. Chicago economic consultant Robert Genetski estimates that the required physical modifications of office buildings and hospitals alone may cost $65 billion.
The 1991 civil Rights Act has made it radically easier for employees to sue employers and harder for employers to defend themselves. It’s no wonder that employers try to avoid hiring new workers.
The whole notion that bureaucrats can micro-manage the economy with regulations that make ordinary life more safe and fair is not supportable because they can’t foresee or regulate the unintended consequences.
For example, a proposed law requiring a parent traveling by airline with an infant to buy a separate seat for the child would make air travel so much more expensive that thousands of families would decide to drive instead of fly. The result would be more infant travel deaths, not fewer, because driving is far more dangerous than flying.