On Mt. Sinai, the Lord handed Moses the Ten Commandments divinely traced by His own finger. The Torah expounded these into 613 laws; but in 2018 the collected regulations issued by the federal government, known as the Federal Register, took up 61,308 pages.
Incredibly, the code has been trimmed by more than one-third from its historic high of 95,894 pages under President Barack Obama. In fact, in 2017 it had the lowest number of rules since they were first measured in the 1970s.
Still, federal regulations cover life in a virtually comprehensive, and costly, way. They establish “standards for grades of canned baked beans” and the “tobacco product standard for characterizing flavors in cigars,” among other trifles.
The damage federal regulation does is real, notes the report’s author, Wayne Crews, CEI’s vice president for policy.
Here are five ways federal regulations harm society:
1. Direct cost: $1.9 trillion. By imposing additional burdens on businesses, federal regulations amount to a hidden tax of $1.9 trillion. Businesses pass this cost on to consumers, costing each American family $14,615 annually. This amounts to “20 percent of average income before taxes, and more as a share of after-tax income,” Crews writes – more than “every annual household budgetary expenditure item except housing.” He continues:
Regulatory costs amount to up to 24 percent of the typical household’s expenditure budget of $60,060. The average U.S. household “spends” more on hidden regulation than on health care, food, transportation, entertainment, apparel, services, and savings. Of course, some costs of regulation are not hidden. Consumers pay for regulatory agencies more directly through taxes.
On top of the tax burden, the government claims another fifth of the family’s income to spend on its own priorities, not the family’s needs or desires.
2. Cost to constitutional order and the rule of law. When Congress defers its constitutional law-making power to unelected – and unaccountable – federal regulators, rules multiply in ways the Founding Fathers never intended. Crews writes:
The “Unconstitutionality Index”—the ratio of rules issued by agencies relative to laws passed by Congress and signed by the president—underscores the triumph of the administrative state over the Constitution. There were 11 rules for every law in 2018 … In calendar year 2018 regulatory agencies issued 3,368 final rules, while the 115th Congress passed and President Trump signed into law 313 bills. While Trump’s rule count was lower, the number of laws enacted was higher than in recent years. The average over the past decade has been 28 rules for every law.
Since federal bureaucracies usually “administer earlier legislation,” new regulations would be written even if Congress never passes another law. Through creative interpretations, statutory law can take new forms and permutations for years, or decades, to come.
3. Cost in transparency, justice, and self-government. “Unlike on-budget spending, regulatory costs are largely obscured from public view,” Crews writes – shrouded like the top of Mt. Sinai when Jehovah delivered the Decalogue. But unlike the divine law, we often have no idea where federal regulations originate. As the late John Lukacs wrote:
The bureaucracy (and its language) are anonymous and impersonal. The first mention of the decision may be in the minutes of a National Security Council Task Force or of a Curriculum Steering Committee of the Faculty. But who pushed the decision? … [T]he anonymity and the hypocrisies of the bureaucratic process, disguised by democratic trappings, go hand in hand. The proponents of an idea or of a decision – whether within a government or a faculty – know how to efface themselves.
The lack of transparency in federal rule-making authority invites corruption and collusion.
4. Cost to small businesses, while distorting the market in favor of Big Business. Federal regulations cost businesses $9,991 per employee, according to the National Association of Manufacturers – “but,” CEI notes, “the effects by firm size vary.” Large, established corporations are better able to absorb compliance costs than small and medium enterprises “(SMEs). The cost to “firms of fewer than 50 workers can be 29 percent greater than those for larger firms—$11,724 for smaller firms, compared with $9,083 for larger ones.”
Society thrives when individuals are not drowning in edicts and diktats 50-times longer than War and Peace – or, more to the point, the Bible.
No wonder big businesses often favor regulations as a way to shut down potential competitors. Ralph Nader and his fellow progressives call this “regulatory capture”; conservatives call this “crony capitalism.” In either case, it corrodes creates the appearance – and sometimes the presence – of impropriety.
5. Cost in jobs never created. Regulations impose costs for every existing employee. However, “regulation affects not only current jobs, but also the inclination for entrepreneurs to create them in the future.” The number of jobs never created due to the self-defeating costs of regulatory compliance, CEI notes, are “immeasurable.”
Overregulation is a transatlantic problem. Germany, the UK, France, and Italy are among the eight nations with a greater overall regulatory burden than the U.S. Canada, Russia, Australia, and Spain lag just behind. Much of this is due to the endless stream of EU regulations coming from Brussels, which member states are obliged to adopt in full.
Society thrives when individuals are not drowning in edicts and diktats 50-times longer than War and Peace – or, more to the point, the Bible. Bureaucratic rules stifle innovation and slow commerce to a crawl. When they are intended to protect society – say, from pollution – they regulate external behavior.
But for those who wish to live in prosperous, dynamic economies, a better choice is to encourage self-restraint. The Ten Commandments, joined with the two great commandments of love, become “the perfect law of liberty.” The believer who gives himself over to a Spirit-led process of sanctification, as Matthew Henry writes in his commentary, becomes “happily disabled for sin. There is a restraint, an embargo (as we may say), laid upon his sinning powers.” He now uses his God-given talents by creating wealth to meet his own needs and serve others, as he deems most prudent.
The government should leave people alone to regulate their own lives according to the inner light of conscience, not multiply regulations that violate their conscience, hinder the economy, and harm national well-being.
(Photo credit: Ted. This photo has been cropped. CC BY-SA 2.0.)