by Richard Belzer

in Regulatory Science, Regulatory Economics

On July 11, 2008, EPA published for public comment an advanced notice of proposed rulemaking on the question whether, and if so, how, EPA should regulate carbon dioxide as a criteria air pollutant under the Clean Air Act. EPA simultaneously published a letter from Susan Dudley, Administrator of OMB's Office of Information and Regulatory Affairs, publicly distancing the Bush administration from EPA's proposal. Comments sent to EPA by other federal agencies also were made public.

This set of events may be unprecedented in the annals of federal regulatory poliicy. Today we begin a series providing a policy-neutral examination of the documents and the issues presented.

24 Jun 2008

McCain's $300 Million Prize for a 'Super Battery':
Would this help or hurt?

by Richard Belzer

in Regulatory Economics, Regulatory Policy

Sen. John McCain has proposed that the federal government award a $300 million prize for the "for the development of a battery package that has the size, capacity, cost and power to leapfrog the commercially available plug-in hybrids or electric cars."

Assuming it would be a good thing to have this technology, is McCain's proposal economically sensible?
More...

30 May 2008

Economic Incentives that Work:
How to stop 'flopping'

by Richard Belzer

in Amusements, Regulatory Economics

The Washington Post's Ivan Carter writes that the NBA has decided to fine players who 'flop'. Will it work? More...

18 Feb 2008

Taxing Illegal Markets to Raise Revenue:
To plug a budget deficit, NYS Governor Spitzer proposes to tax illegal drugs

by Richard Belzer

in Regulatory Economics

New York State Governor Eliot Spitzer has proposed to plug part of an expected $4.4 billion budget deficit by enacting a tax on illegal drugs. Similar laws have been enacted elsewhere to enable law enforcement to charge drugs distributors and dealers with another form of tax evasion. (Chances are they already evade federal and state income taxes.)

Are there any conditions in which this proposal could raise significant revenue? More...

13 Feb 2008

Solving the Problem of Excess Consumption by More Consumption:
Robert Reich is "Totally Spent"

by Richard Belzer

in Regulatory Economics, Regulatory Policy

We don't normally wade into macroeconomics, but today is an exception. Former Secretary of Labor Robert Reich diagnoses today's economic problems in a intriguing manner and offers an interesting prescription. He begins from the premise that the U.S. economy has been stagnant for a generation, and lower- and middle-income households already spend everything they earn and do not save. "America’s median hourly wage is barely higher than it was 35 years ago, adjusted for inflation," he writes. "{M]iddle- and lower-income Americans found ways to live beyond their paychecks," he continues, "[b]ut now they have run out of ways."

His prescription: subsidize additional consumption by middle- and lower-income households. This is an unusual proposal given the prevailing view that Americans do not save enough. More...

27 Jul 2007

Who Pays the Cost of Regulation?
Insights from corporate income tax incidence

by Richard Belzer

in Regulatory Economics

Regulation is widely understood as a tax on the activity or person being regulated. Where these activities repair genuine market failures, benefits from regulation may result. If there are benefits from, say, automobile safety regulation, one would expect the beneficiaries to be persons who otherwise would have been killed or injured at the pre-regulatory safety level.

But what about the costs of regulation? Who bears them? More...

14 May 2007

Socially Motivated Mutual Funds:
Are costs and benefits transparent to investors?

by Richard Belzer

in Information Quality, Regulatory Economics

Jeff Brown in the Washington Post business section discusses "socially responsible" investing, the practice of restricting the domain of one's portfolio to support various causes. Brown provides estimates of how much return on investment soc ially responsible investors sacrifice to pursue their social goals.

Brown's article is remarkable because it is one of few to acknowledge that the imposition of political or social constraints generally leads to lower returns. Investors with strong political or social values can choose to accept lower returns. The problem is mutual funds that promote social causes often imply in their advertising that their returns are just as good as mutual funds that do not impose such restrictions. In other words, they imply there is either no opportunity cost to "socially responsible" investing, or the opportunity cost is minor.

Brown provides some data that put these opportunity costs in perspective. His data, which he attributes to Morningstar, suggest that the opportunity costs of socially motivated investing can be very large. And it's not clear what benefits investors actually get in the process. More...

11 May 2007

Government-wide Information Quality Guidelines:
Does journal peer review achieve "adequate" objectivity?

by Richard Belzer

in Glossary, Information Quality, Peer Review

Federal guidelines require information disseminated by federal agencies to satisfy a few broad criteria, one of which is objectivity. These guidelines give a "rebuttable presumption" to scientific information published in scholarly journals.

• Do all scholarly journals transmit this rebuttable presumption of objectivity? What about scholarly journals that also have an advocacy mission?
• What is the burden of proof for mounting a successful rebuttal?

9 May 2007

Federal Agency Guidance Documents:
What's "significant"?

by Richard Belzer

in Regulatory Policy

OMB has new procedures for agencies to follow in making significant guidance documents transparent.

We posted an extensive discussion on OMB's Bulletin on Good Guidance Practices, and recently OMB issued an implementation memorandum. Yesterday we commented on the first task facing federal regulatory agencies: assembling and publishing online lists of guidance documents.

Today we address another fundamental question: What constitutes a "significant" guidance document, an d how is this determination made? More...

8 May 2007

Federal Agency Guidance Documents:
Building the inventory

by Richard Belzer

in Regulatory Policy

Executive Order 13422 and OMB's Bulletin on Good Guidance Practices will lead to major changes in the way federal agencies issue guidance.

The first step for each agency is to develop and publish inventories of their significant guidance documents. The deadlines for agency compliance are July 24, 2007 (for significant guidance documents issued on or after January 25, 2007) and August 23, 2007 (for all significant guidance documents). More...

7 May 2007

The New OMB Regulatory Review Procedures:
A primer on implementation

by Richard Belzer

in Regulatory Policy

On April 25 OMB issued guidance to agencies concerning the implementation of Executive Order 13422. More...

10 Apr 2007

Regulatory Policy in South America
Impressions from 10 days in Chile and Argentina

by Richard Belzer

in Regulatory Economics, Regulatory Policy

Neutral Source has not vanished; rather, we went away for about two weeks on a wine tour of Chile and Argentina. Blogging from abroad was entirely possible, as we had excellent internet connections almost everywhere, but it did not seem to be an optimal use of time.

Today we begin an occasional series comparing and contrasting regulatory science, economics, and policy in Chile and Argentina with the US. Though not a travelogue, we will provide a few suggestions for readers who are interested in taking such a trip or just happen to be interested in South American wine. More...

22 Feb 2007

JetBlue's "Customer Bill of Rights"
Is this a big deal?

by Richard Belzer

in Legislation, Regulatory Policy

In response to what it it calls its "worst operational week" ever, JetBlue has issued a "customer bill of rights."

• Does it make any sense for a seller in the marketplace to be issuing "bills of rights" to their customers?
• Is this a sufficient market-driven response for JetBlue to repair customer relations?
• Will it deter Congress from passing legislation on the subject?

14 Feb 2007

Executive Order 13422, Part 5a
The House subcommittee oversight hearings

by Richard Belzer

in Regulatory Policy

Today we start a series summarizing the testimony from all eight witnesses who appeared yesterday before two separate House oversight subcommittees. More...

13 Feb 2007

Executive Order 13422, Part 4b
An update on today's congressional hearings

by Richard Belzer

in Regulatory Policy

The previously scheduled joint subcommittee hearing has been split into a back-to-back marathon double hearing. See our event record for links to witness testimony.

The full witness list is below.