Industrial Insight

cut regulations…. | December 5, 2011

Iain Murray and David Schoenbrod
The Regulatory Thicket
It’s time to cut it back.

My colleague Wayne Crews has surveyed the growth of the regulatory state every year since 1996 in his annual report, Ten Thousand Commandments. In that time, he has seen the number of pages in the Federal Register grow from 67,000 to 81,405. Each page (apart from the bizarre blank ones) contains a rule that imposes costs on businesses while creating more jobs for bureaucrats. Small businesses suffer disproportionately from these rules because their owners have to deal with compliance themselves (they usually give up and hire someone else to handle it when they reach about 30 employees). The costs of complying with regulations average $10,585 per employee, the SBA says—enough to throw a small firm of 20 employees with $200,000 in profits into just-breaking-even territory.

Two British policies invite imitation in the United States. Congress could experiment with “regulatory budgeting,” a system currently being introduced in the United Kingdom, by approving a proposal of Democratic senator Mark Warner’s: for every new rule introduced, an old one of equivalent cost would have to be repealed. Congress could also implement an American version of Britain’s new Red Tape Challenge, which enables citizens to air grievances about particular regulations.


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About author

I'm the executive vice president for a steel casting trade association, the Steel Founders' Society of America. I've got a crazy wife, five crazy children, three crazy people that married into the family, and two crazy fun little grandsons.







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