1615 H Street, N.W., Washington, D.C. 20006
Supporting free enterprise and promoting entrepreneurship is the only way to create the estimated 20 million jobs necessary for economic recovery. Yet increased government regulations threaten to limit the private sector's ability to grow, compete, and create the jobs we need, especially new and small businesses.
At this cosponsored National Chamber Foundation-American Enterprise Institute event, noted scholars examined current U.S. regulatory policy and the impact of new and more aggressive regulations at this time of economic uncertainty.
|8:30 a.m.||Registration and Breakfast|
|9:00||Introduction:||Margaret Spellings, U.S. Chamber of Commerce|
|9:05||Panel I: The Growth of Federal Regulation|
|AEI's D. C. Searle Senior Fellow Christopher DeMuth will present research on the impetus for increased federal regulations, examining why the government is creating more rigid, restricting policies and if they are all necessary. A roundtable discussion will follow.|
|Presenter:||Christopher DeMuth, AEI|
|Discussants:||Ted Gayer, Brookings Institution|
|Alex J. Pollock, AEI|
|James Vitrano, Blessey Marine Services Inc.|
|Moderator:||Nick Schulz, AEI|
|10:40||Panel II: The Surprising Return of Price Controls|
|A bipartisan consensus against price controls in competitive markets has prevailed since the 1970s. Now,slowly but surely, price regulation is returning. Speakers on this panel will examine controls on credit cards and health insurance and possible extensions to other markets. Will the new price controls benefit consumers where the old ones did not?|
|Discussants:||Christopher DeMuth, AEI|
|Scott Harrington, Wharton School of Business|
|Todd Zywicki, George Mason University School of Law|
|Moderator:||Nick Schulz, AEI|
1150 Seventeenth Street, N.W.
Washington, D.C. 20036
1150 Seventeenth Street, N.W.
Washington, D.C. 20036
WASHINGTON, JULY 8, 2010--In light of recent efforts to increase regulation on health care, finance, and the environment, two panels of experts gathered at the U.S. Chamber of Commerce to discuss trends and problems in regulatory policy. AEI D.C. Searle Senior Fellow Christopher DeMuth discussed his recent paper, "Contemporary Conservatism and Government Regulation," tracing the history of regulatory policy and calling for a bipartisan, ideology-free approach to current regulatory challenges. Panelists Ted Gayer, the Joseph A. Pechman Senior Fellow at the Brookings Institution, Alex J. Pollock, resident fellow at AEI, and James Vitrano, a lawyer for Blessey Marine Services Inc., discussed Republicans' tendency to prefer regulation over taxation and the ideology behind some individuals' confidence in regulation. The second panel, including Scott Harrington, professor at the University of Pennsylvania's Wharton School, and Todd Zywicki, a law professor at George Mason University School of Law, described the adverse consequences of certain regulations on markets for health insurance and consumer credit.
- "While many regulations are important and effective, a great many are also very wasteful, and some of them--a disturbing number--are actually perverse, having unintended consequences that actually amount to doing positive harm to the objectives of the programs. These features are largely the result of the particularity, the narrowness, the minuteness of government rules. The government may set one price for a product or service, but prices usually have many different elements, and the other elements will react to the government rule. Or, if prices are actually controlled, there may be queues or there may be a withdrawal of supply, leaving customers worse off than they would be, using up all of the benefits of the lower prices and then some. The government may regulate a single risk through product standards or product bans, but the effect will be that consumers will substitute other products and activities, which may have risks of their own. And it is an open question whether this compromises the intention of the risk regulation or actually cancels it altogether."
--Christopher DeMuth, D. C. Searle Senior Fellow, AEI
- "The behavioral economics literature on tax salience suggests a political explanation for the preference of regulations over taxes. Since regulations are less salient to voters than are taxes, voters are less aware of them, less likely to change their behavior as a result of them, and thus less likely to punish politicians who embrace them. By emphasizing a concern for taxes over subsidies and regulations, Republican politicians, I think, have conceded the point, by showing a preference for insalient government costs and insalient government benefits. This concession shows up most prominently in Republican positions on energy policy, in which subsidies for alternative energy--such as Bush's hydrogen initiative--big energy mandates . . . and efficiency standards . . . are encouraged or at least very much accepted, whereas salient and explicit instruments such as a gas tax or a carbon tax or cap and trade are forcibly opposed."
--Ted Gayer, Joseph A. Pechman Senior Fellow, Brookings Institution
- "Basically the [health care law] sets rules that a health insurance company will have to pay out a specified minimum proportion of the premiums it collects in medical benefits, and if it doesn't meet that minimum, it will have to refund money to policy holders. . . . Already we're having an extensive debate among insurance regulators with the HHS [Health and Human Services] . . . to determine how to implement these [regulations]. And it sounds like a very simple concept, but when you get down to asking how this will be implemented--what does the 80 percent apply to, does it apply to the subsidiary level of the insurance company, how does it vary across regions--you end up with a large amount of regulation, a large amount of byzantine rules, and a large bureaucracy dealing with how things will be determined."
--Scott Harrington, Professor, University of Pennsylvania's Wharton School
-- WISTAR WILSON
Christopher DeMuth is the D. C. Searle Senior Fellow at AEI. He was president of AEI from December 1986 through December 2008. Previously, he was administrator for information and regulatory affairs in the Office of Management and Budget and executive director of the Presidential Task Force on Regulatory Relief in the Reagan administration; taught economics, law, and regulatory policy at the Kennedy School of Government at Harvard University; practiced regulatory, antitrust, and general corporate law; and worked on urban and environmental policy in the Nixon White House.
Ted Gayer is the codirector of the Economic Studies program and the Joseph A. Pechman Senior Fellow at the Brookings Institution. He conducts research on a variety of economic issues, focusing particularly on public finance, environmental and energy economics, housing, and regulatory policy. Prior to joining the Brookings Institution in September 2009, he was associate professor of public policy at Georgetown University. From 2007 to 2008, he was deputy assistant secretary for economic policy at the Department of the Treasury. While at Treasury, he worked primarily on housing and credit-market policies, as well as on energy and environmental issues, health care, Social Security and Medicare. From 2003 to 2004, he was a senior economist at the President's Council of Economic Advisers, where he worked on environmental and energy policies. From 2006 to 2007, he was a visiting fellow at the Public Policy Institute of California, and from 2004 to 2006, he was a visiting scholar at AEI. He has written on such topics as cost-benefit analysis, cost-effectiveness analysis, and the design of market-based environmental policies. He has also researched education policy and the history of economics. His work has been published in numerous journals, including the Review of Economics and Statistics, Science, the Journal of Economic Literature, and the Journal of Human Resources. He has also coedited (with W. Kip Viscusi) the two-volume Classics in Risk Management and has coauthored (with Harvey Rosen) the textbook Public Finance, 8th edition.
Scott E. Harrington is the Alan B. Miller Professor in the health care management and insurance and risk-management departments at the Wharton School of the University of Pennsylvania. He is an adjunct scholar at AEI. A former president of both the American Risk and Insurance Association and the Risk Theory Society, he is a coeditor of the Journal of Risk and Insurance and has published widely on the economics and regulation of insurance. A frequent speaker on insurance markets, regulation, and public policy, Mr. Harrington has conducted research, consulted, or served as an expert for the National Association of Insurance Commissioners and for many corporations and industry organizations. He has testified before the U.S. House and Senate and before numerous U.S. state legislative and administrative committees.
Alex J. Pollock has been a resident fellow at AEI since 2004, focusing on financial policy issues, including housing finance, government-sponsored enterprises, retirement finance, corporate governance, accounting standards, and the banking system. Previously, he spent thirty-five years in banking, including twelve years as president and chief executive officer of the Federal Home Loan Bank of Chicago. He is the author of numerous articles on financial systems and the organizer of the "Deflating Bubble" series of AEI conferences. In 2007, he developed a one-page mortgage form to help borrowers understand their mortgage obligations. He is a director of Allied Capital Corporation, the Chicago Mercantile Exchange, the Great Lakes Higher Education Corporation, the International Housing Union for Housing Finance, and the chairman of the board of the Great Books Foundation.
Nick Schulz is the editor-in-chief of American.com, AEI's online journal of ideas focusing on business, economics, and public affairs. In 2006, he helped launch the site and has written its "Techno-Ideas" column. Prior to joining American.com, he was the editor-in-chief of the web-based TCS Daily and the politics editor of FoxNews.com. He was an award-winning television producer with the PBS series Think Tank. He has also been published widely in newspapers and magazines around the country, including the Washington Post, the Wall Street Journal, the Los Angeles Times, USA Today, and Slate.
Margaret Spellings is the president and chief executive officer of Margaret Spellings and Company, a public policy and strategic consulting firm created in 2009. Ms. Spellings also serves as a senior adviser to the U.S. Chamber of Commerce, the world's largest business federation representing 3 million businesses, and to the Boston Consulting Group, a global management consulting firm and the world's leading adviser on business strategy. Ms. Spellings is the immediate past U.S. secretary of education, serving from 2005 to 2009. As a member of the President's Cabinet, she led the implementation of the No Child Left Behind Act (NCLB), a historic national initiative to provide enhanced accountability for the education of 50 million U.S. public school students. On the postsecondary side, Ms. Spellings launched a national higher-education policy debate and action plan on higher education to improve accessibility, affordability, and accountability in our nation's colleges and universities, and she led the federal government's efforts to ensure access to student loans amidst turmoil in the credit markets. She initiated extensive international outreach and collaboration with twenty-three countries, including overseeing the signing of international education agreements with countries such as China, Russia, and the United Arab Emirates. As White House domestic policy adviser from 2001 to 2005, she managed the development of the president's domestic policy agenda, with oversight of education, health, transportation, justice, housing, and labor policy. Her achievements include the development and passage of NCLB, oversight of the development of the President's Emergency Plan for AIDS Relief, the development of a comprehensive immigration plan to ensure long-term economic stability and to secure U.S. borders, and numerous other initiatives on health and human services, transportation, labor, and housing. Prior to her service in the White House, Ms. Spellings served as senior adviser to then-governor George W. Bush of Texas, led government relations efforts for the Texas Association of School Boards, served in various leadership capacities for the Texas legislature, and worked for local education organizations including Austin Community College.
Todd Zywicki is the Foundation Professor of Law at George Mason University School of Law and a senior scholar at the Mercatus Center at George Mason University. In 2009, Mr. Zywicki was honored as the recipient of the Institute for Humane Studies 2009 Charles G. Koch Outstanding IHS Alum Award. Since 2006, he has served as coeditor of the Supreme Court Economic Review. From 2003 to 2004, he served as the director of the Office of Policy Planning at the Federal Trade Commission. He teaches in the area of bankruptcy, contracts, commercial law, business associations, law and economics, and public choice and the law. He has also taught at Vanderbilt University Law School, Georgetown University Law Center, Boston College Law School, and Mississippi College School of Law.