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trying to make sense of it all » regulation-o-rama
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Posts Tagged ‘regulation-o-rama’

Organic Farmers and the FDA

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The L.A. Times reports Planned food safety rules rile organic farmers. While it clarifies that “full enforcement of the rules is still years away,” …

Now, farmers are discovering that the FDA’s proposed rules would curtail many techniques that are common among organic growers, including spreading house-made fertilizers, tilling cropland with grazing animals, and irrigating from open creeks.

Obviously there are negative implications for small businesses:

“They are going to drive farms out of business,” said Dave Runsten, policy director for Community Alliance with Family Farmers in Davis, Calif.

“The consumer groups behind this don’t understand farming,” Runsten says. “They talk out of both sides of their mouth. They demand these one-size-fits-all regulations, then say, ‘I don’t want to hurt those cute little farmers at the farmers market. I shop at the farmers market.’ It is frustrating.” …

“The public loves to love and idealize us little family farmers,” he [Crawford, a farmer] said. “But the vast majority of us are hanging by a thread. Now, the government is saying, ‘We are going to put a lot more weight on that thread.'”

And I hate to get back into regulations being trade-offs, but the shoe seems to fit. Of course we need common sense food regulations, but isn’t the trickle up economics obvious? Small farms close and big-agra is either unaffected or can subsume and move on.

And what about the EPA and the environmental groups that shape its agenda (as the consumer groups shape the FDA’s)? Petrochemical fertilizers rather than compost or animal manure? Get your water from someplace far away rather than the nearby creek? Using fossil-fuel driven machinery rather than grazing animals (granted, I’m sure PETA is pleased)? I can’t see Greenpeace, etc., getting behind that.

Somehow we need to find a more comprehensive view of the regulation environment. There are shared goals of liberty, economy, ecology, and safety here. To pursue one without heeding the others will not end well.

Side note:
I also find interesting that when the L.A. times says, “Tens of millions of consumers are sickened by tainted food each year, and some 3,000 die annually as a result,” they link to this page from the CDC. I’m not sure where they got the “tens of millions” number, as the five illnesses listed here make up 91% of all cases and add up to less that ten million. That said, the number one cause of illness (58%) is Norovirus, which the CDC itself says you can get, “from an infected person, contaminated food or water, or by touching contaminated surfaces.” The question this raises is how many of these 5,461,731 cases of Norovirus were directly related to food and not from person-to-person or surface-to-person contamination? If it includes the other two, isn’t the five million plus figure misleading? I may just be cynical and this may be above board, but it just seems like they’re using these numbers to justify constrictive regulations which will have little to no impact on said numbers.




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More on Regulations

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In my last post, I wrote generally about the trade-offs in regulations. The idea being that regulations are simply “good” versus “bad” is not a constructive argument. In this post, I hope to highlight some regulations I consider bad and perhaps look into more appropriate regulations.

The Dodd-Frank Wall Street Reform and Consumer Protection Act is probably a good place to start. As the linked article points out, the Consumer Financial Protection Bureau (CFPB) is not funded by congress and hence very little accountability to them. So-called “Systemically Important” banks is essentially codifying “Too Big to Fail” — exactly the wrong message to send to banks that were bailed out for previous failures. Nearly 14,000 pages of regulation have been cranked out to implement the law. Note here that the bill itself was approximately 2,253 pages, but couldn’t contain a fourth of the myriad actual regulations it has spawned. This Forbes’  quote represents a what seems to be a consensus:

This sounds all rather confused. But that may just be the point of Dodd-Frank: to keep everything churned up so that no one is sure at any given point what the rules really are. That way financial institutions (very broadly defined in D-F as banks, insurers, and anything else that might conceivably qualify) have to constantly ask for help and guidance from busy and powerful financial regulatory bureaucrats in figuring out what they may or may not do.

And yet they didn’t even address Glass-Steagall, whose repeal many implicate in the crash.

This 2011 National Review Article gives perspective perspective on the pace of new regulations in general :

How busy have these thousands of regulators been? The numbers tell the story. The first Federal Register was issued in 1936. It contained eleven pages! For the first 147 years of the nation’s existence under the Constitution we somehow managed to get by with only eleven pages of regulations. During that time we went from an insignificant state to the most powerful and economically vibrant nation on the globe. By 2008 the Federal Register contained 31,879 documents and 79,435 pages, while the Code of Federal Regulations comprised 163,333 pages in 226 individual books. Rules have been accumulating at a rate of nine pages a day since 1936. … The Federal Register has grown 20 percent in just the last two years, and there are another 4,225 rules already written and winding their way through the system.

How can anyone keep up with all these rules? Like the Tax Code, they can’t. They hire specialists, often the ones that wrote the regulations.

Moving on The Occupational Safety and Health Administration’s (OSHA), The Hill reports:

For decades, Congress has inserted language in appropriations bills prohibiting OSHA – an arm of the Labor Department – from enforcing provisions of the 1976 Occupational Safety and Health Act at farming operations with 10 or fewer employees.

But in recent months, the agency has begun issuing thousands of dollars in fines under the statute, saying that it has jurisdiction over non-farming operations – including grain storage – on farms, the lawmakers said.

“Lo and behold, OSHA has decided it can label certain sections of the farm as something else – by fiat – and send in their inspectors,” Johanns said in remarks on the Senate floor before Congress adjourned for the year. “OSHA ignored what Congress directed.”

The Food and Drug Administration:

This perfect storm of increased regulations and increased oversight has had a ruinous effect.  For example, during the Bush Administration, Congressman Henry Waxman often pummeled the Food and Drug Administration (FDA), demanding more oversight and more regulatory reviews in an unrealistic quest to find perfect, risk-free medications.

When Barack Obama became president, Democrat acolytes took over the FDA and implemented the strategy of excessive regulatory control that Waxman had advocated.  And what was the effect?

New pharmaceutical development, once an American competitive edge, has slowed to a crawl and the nation is in danger of losing its leadership in new drug development. In 1996, the FDA approved approximately 45 new drugs—and the world clamored to buy American pharmaceuticals.  Now, despite larger budgets, increased manpower and more sophisticated technology, the FDA approves only 20 new drugs each year.

And where to begin with the EPA?

I’d like to do a whole post on the EPA. I’m not saying it shouldn’t exist or doesn’t do any good, but they really seem out of control to me (and, apparently, SCOTUS), micro-managing and usurping state environmental agencies’ power.

If you’re not familiar with crony capitalism, it is “A term describing an economy in which success in business depends on close relationships between business people and government officials.” This generally comes into play when regulations are created  arbitrarily too arduous for small business or other competitor compliance. A very clear case of this is a 2009 law that benefitted Altria/Phillip-Morris over its competitors in the tobacco industry.
Here are a few links speaking of crony capitalism more broadly:

To sum up, I think regulations are essential, but they should be understandable, accessible to congress, and as local as is reasonable.

If you’d like to submit a comment, please fill out this form in triplicate and have it authorized by your supervisor and his or her supervisor. We will get back to you in 10-14 business days.

John Stossel on “Regulation and the Small Entrepreneur”:

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There’s more to regulations than economics, but I think this definition is instructive:

Economics is the study of the use of scarce resources which have alternative uses.

In this sense of scarcity, ocean water is scarce, as opposed to infinite. As these scarce resources have alternative uses, any choice to be made is a trade-off. There is no free lunch.

And so, with regulations, safer cars may be less fuel efficient, more fuel efficient cars may be less safe, and either type of regulation may price the automobiles out of the budgets of the poor.

Don’t get me wrong, there are a lot of win-wins out there, such as computers becoming more energy efficient and cheaper, while maintaining performance, but there’s still the issue of more people buying more computers more often (as they’re cheaper), adding to the ecological footprint, blah, blah, blah.

The point is there’s always some trade-off and I think that should be considered before forging ahead with the regulation panacea du jour.

For example, I think there should be a clearer distinction between regulation specifically enacted by a legislative body and a legislative body empowering a bureaucratic body to enact regulations on its behalf. Both have their place, but it’s not the same thing. Similar considerations arise when looking at various levels of sovereignty.

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