Dynamist Blog

Regulation Matters Most

An economist friend (and Bush supporter) writes to make the point I implied, but didn't state, in the post on regulation below:

The articles you cite are inadvertently a counter to the right-wing criticism of Bush's economic policies. His most severe anti-market move was the tariff on imported steel, which was highly porous legislation that did not even continue, and which may have served as a low-cost sop to protectionists in certain states. In contrast, on the more important and less easily observable work of micro-efficiencies -- the Bush skepticism of regulation, which is in fact the default position of the entire economic profession -- looks to be exactly the sort of thing free marketeers would want. Would people like Tyler Cowen or Dan Drezener really prefer a Kerry administration which was Clintonesque on visible free trade and biased in favor of activist legislation away from the public eye?

After all it's the day to day accretion of unexamined regulations that probably do as much if not more damage to the long run efficiency of the economy -- than the bigger-splash macro policies on the deficit and trade.

On economic policy, I always care most about regulation because it's capable of creating huge distortions, is largely unscrutinized by the public, and is almost impossible to get rid of once it's in place. Here's another reason to watch Arnold's veto pen.

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