Critiques of Regulatory Policy
Regulatory Successes
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FDA since 1900
Environmental regulation
 Through the 1980s
Workplace safety
Civil rights
Regulations that Did Not Work so Well
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Airline rates and routes
Trucking rates and routes
Telecommunications
Who wins and who loses in economic
regulations?
 Small towns and rural areas
 Unions
 Big business
Are We Better Off?
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What has improved over the past 50 years?
 Health?
 Racism?
 Do more people have more stuff?
 What does it mean to be poor in the US over the past
50 years?
What has gotten worse?
 Income disparities?
 Role of expectations?
Why Doesn't the Public Trust Agencies?
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What are examples of public distrust of agencies?
Are these justified?
What is the impact of this distrust?
Why don't people want to pay taxes?
FDA
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Drug lag?
What are the tradeoffs in FDA regulation?
 Safety
 Effectiveness
 Should cost be part of the equation?
Why are consumers in a poor position to judge drugs?
 Background Information?
 Timeframe of action?
 Comparison with other drugs?
Why not let the market sort it out?
Health Care as a Regulated Industry
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What are the problems facing health care in the
US?
 What has happened to nature of disease over
the past 100 years?
 How does this complicate health care policy?
 What does this tell us about the Charity
Hospital system?
What are the financial incentives in health care?
How is Ethanol a Regulatory Problem?
Cost Benefit Analysis
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How much should we spend to save a life?
How much to prevent injury?
How much should personal responsibility matter?
 personal protective gear?
CBA Costs - Table 3-1 - p. 151
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What is the problem with lives saved analysis?
Are they the same lives for different risks?
What about disability?
What are the most cost effective regulations?
 Interesting that vaccinations and clean drinking
water are not here
Could We Spend the Money More Wisely?
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What type of risks do we spend the most on with the least
return?
 Asbestos abatement of stable asbestos in buildings
 Superfund risks
 Overstated health risks - LA cancer corridor
What risks get the least attention?
 Smoking?
 Immunizations?
 Primary care?
What is the Cost of Unemployment?
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Economic costs to the individual
 Lost opportunities for your children
 Lost of assets, making recovery harder
Health costs
 Stress
 Reduced access to care
Self-esteem
Crime
Should we do CBA at All?
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Why not prevent all possible risks?
What are the trade offs?
How does the US concern with risks affect our
cost of business production?
When can preventing one risk cause another?
 Natural pesticides
 Smaller, lighter cars
 More expensive power?
Non-Agency Regulation: Tort and
Compensation Law
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How is tort law a regulatory process?
Is it a democratic process?
 What is the public input?
 Who protects the public's interest in tort cases?
What are the standards for scientific decisionmaking?
 Breast implants?
 Erin Brockovich?
What are the standards for CBA?
What if later evidence shows that the verdict or
settlement was wrong?
Should We Control Personal Risk
Decisions?
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Should consumers have the right to buy much cheaper
and better mileage cars that are less safe?
Should consumers have the right to use unapproved
drugs?
 What if they are dying?
What about not getting their kids vaccinated?
Smoking?
 Smoking dope?
Impossible Tasks
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Why do legislatures give agencies impossible
tasks?
What are the possible agency responses?
What is the conflict between LSU owning both the
charity hospital system and the medical school?
What about the state regulating state owned
hospitals?
Civic Republicanism
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How can agencies be better representatives for the whole
population than are the elected officials?
What are the pressures on elected officials?
How are these different for agencies?
 Independent agencies?
Should there be more public participation?
Should congress and the executive have to disclose all
contacts with the agency?
Regulatory Alternatives
Economic incentives and Taxes for
Environmental Risks
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Tradeable permits for a fixed amount of pollution
 Would require the government to decide how
much pollution is OK, not to just focus on
process
 Lets industry see who can do it the most
efficiently
What if you are downwind?
 Does an aggregate reduction, which benefits
more people, make you any happier?
Collective bargaining for working
conditions and safety
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What are the limits on this?
How could we change them?
Is this a good idea?
Negative income tax rather than
Government Benefits
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Proposed by Nixon
Why might a conservative argue for this?
 Should we let people choose what to do with
their money?
 Who could benefit?
What are the benefits in administrative costs over
the current benefits system?
What are the problems?
What about Natural Monopolies?
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What are natural monopolies?
 Why not allow cable companies to compete for
business in a given community?
How can natural monopolies change with time?
 Telephones?
 IBM mainframe computers?
Can antitrust laws be an alternative?
Agency Personnel Issues
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How does political control conflict with agency
expertise?
 What are the problems with attracting good people to
agencies?
 Could these be changed?
Will strict conflict of interest rules make agencies work
better?
 Do you need industry expertise in the agency?
 FDA?
 Do you want people to stay in the agency for their
whole life?
Assignment for Thursday: Should We
Rebuild New Orleans?
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Would NO be in better or worse funding position if they had properly evacuated
the folks before Katrina?
 What is the CBA for real evacuations?
What is the CBA?
 What are the trade-offs?
 Who should pay
What about the responsibilities of the homeowners?
 Should we bail them out?
 How much do you want to pay?
What about coastal erosion and subsidence?
 Should we rebuild before it is safe?
 If we do not rebuild, what happens to the CBA?