The Death of Common Sensereviewed by Philip Greenspun; March 2010
This is a review of The Death of Common Sense: How Law is Suffocating America by Philip K. Howard, published in 1994. This is a rare book by a U.S. lawyer who thinks that the U.S. has too many laws and regulations. It was recommended to me by a very creative lawyer, Ernest Svenson, the author of Ernie the Attorney, a popular Weblog that formerly carried my favorite-ever Weblog subtitle "Searching for truth and justice in an unjust world."
Howard chronicles the staggering high cost of government regulation with a lot of examples from his New York City home. Mother Teresa's nuns, in 1988, tried to set up a homeless shelter in an abandoned Manhattan building, raising $500,000 for the purpose. They gave up a couple of years later because the city was going to force them to install an elevator, which was pretty much against their religious principles to use as well as being incredibly expensive.
Why do we have so many homeless people to begin with? Howard interviews architects and learns that modern building codes prevent the construction of the kind of cramped-but-private housing that was common 100 years ago. The government essentially mandates that Americans live like rich people (spacious apartments with all modern conveniences) but then poor people can't afford what is mandated so they end up on the street.
Various laws designed to ensure that day care centers were perfect ended up preventing churches and other groups from running any at all. Mandating that buses and subways be wheelchair-accessible, despite the fact that the city was already providing free door-to-door van service, cost so much that service had to be drastically reduced (though presumably not nearly as much as it will be reduced as a result of transit worker pension obligations).
The author goes into detail regarding OSHA's impact on a brick-making plant:
Warnings are posted everywhere. A large POISON sign dominates one side of a storage shed filled with bags of something hazardous. It turns out to be sand. OSHA categorizes sand as poison because sand ... contains a mineral called silica. Some scientists believe that silica, in conditions found nowhere except in certain grinding and mining operations, might cause cancer.
OSHA's efforts do not cease at the brick-making plant's doors.
In 1991, the OSHA regional office in Chicago, after visiting a construction site, sent a citation to the brick maker for failing to supply an MSDS form with each pallet of bricks. ... Brick manufacturers dutifully began sending out the MSDS form, which describes, for the benefit of workers, how to identify a brick (a "hard ceramic body... with no odor") and giving its boiling point (above 3500 degrees F).
My home state of Massachusetts gets an honorable mention. Our "Office of Children" cited a day care center for having "liquid dishwashing soap within reach of children (it is used for bubble blowing)" and then "required Ms. O'Reilly to bolt the wooden toy refrigerator to the wall." The daycare center needs to have "a complete change of clothing for each child", i.e., with 30 kids they need to have 30 outfits, not just 4 or 5 in generic sizes.
The FDA is mentioned for its ability to make time stand still, taking an average of six years longer to approve a drug than its European counterparts. The incentive structure for bureaucrats does not penalize them if people die while waiting for a useful new drug, but they get whipped if they approve something with significant side effects.
Howard did not mention one of the costliest Federal agencies, the FAA. By making it so expensive and time-consuming to change anything in an airplane, the FAA has held back technological progress more effectively than almost any other government agency.
Here's something that David Rafner, an engineer, wrote in July 1999 about John F. Kennedy Jr.'s plane crash, which resulted from spatial disorientation while flying over dark water on a hazy night (beautiful instrument flying conditions, but he was not instrument rated):
This was in a private six-seat airplane. How much better equipped were Boeing airliners? Consider the American Airlines Boeing 757 crash into a mountain near Cali, Colombia, which occurred in 1995. The Global Positioning System (GPS) was fully operational in 1995. Microsoft Flight Simulator was a mature Version 5.1 product in the hands of millions of consumers worldwide. An 8-year-old kid in Cali could have seen that mountain on his desktop Windows machine; the pilots of AA 965 could not see the mountain.We will probably never know what DID happen in the last seconds before JFK Jr.'s plane hit the water. However, we know a great deal about what didn't happen. He didn't see a crisp artificial horizon projected on a heads-up display. He didn't see the shoreline through the haze with a heads-up infrared display (currently being tested for cars). He didn't reach up and simply press a large button labeled "Flat & Level" that would have righted his plane. He didn't hear a calm, electronic voice alert him to his attitude, then as he banked into a dive, feel the autopilot usurp control and level the plane. He didn't sit back and read a book while a fully autonomous autopilot managed flight traffic and weather conditions and lined up his plane for a perfect final approach. His disappearance didn't register on an outdated and fragile FAA air traffic control system. His emergency locator beacon was not clever enough to turn on during his power-dive, before the plane hit the water. His last actions did not get recorded by even the simplest black-box recorder (GM has been using them for a year). His $325,000 didn't buy an aircraft that had benefited from a free and legally-just market for aircraft manufactures and pilots. His powerful friends and relatives in Washington didn't know that but for them, his plane could have been almost unimaginably safer. ...For the Washington do-gooders hadn't even blinked an eye when they casually traded in the marvels of free market could-have-beens in favor of stale, government baked good-enoughs. And we certainly know that when they learned of the crash, they didn't look down and see Kennedy blood on their hands. Perhaps they should take off their rose-colored glasses.
How much have things improved since 1999? In this blog posting about the 2009 crash of Colgan 3407, I pointed out that the modern digital autopilot in the $27 million was just as dumb as the analog autopilots of the 1950s. Boeing 757s and similar airliners flying in 2010 still do not have the "synthetic terrain" that is enjoyed by desktop (and even mobile phone) flight simulator users.
Because much of what the FAA does is so technical and the average researcher assumes that the knobs, switches, and gleaming displays in the front of an airliner must somehow be state-of-the-art, the costs of FAA regulation are probably not accounted for properly by economists.
[How much does regulation cost? Page 173 of Libertarianism: A Primer (1997) says "About 130,000 people work in federal regulatory agencies, and the economist Thomas D. Hopkins, writing in the Journal of Regulation and Social Costs, estimates that regulation costs our economy some $600 billion a year in lost output... A 1994 study from Harvard University's Center for Risk Analysis found that our command-and-control regulator system may be costing as many as 60,000 lives a year, by spending resources on negligible risks, leaving less money for people to spend on protecting themselves from bigger but less dramatic risks." In the 13 years since the book was published, presumably the numbers have all grown larger due to inflation, population growth, and the growing share of GDP consumed by the government.]
As the government has grown ever-larger there have been calls to make government contracting more fair and transparent. Howard says that in practice this has simply made things incredibly slow and inefficient, with only the most inept and corrupt contractors willing to deal with a lot of governments. He looks back with fondness to the New Deal days of the Roosevelt administration when bureaucrats could act rapidly. An example he cites is the Chicago official who did not want to approve an emergency $75,000 repair to a tunnel underneath the Chicago River. To ensure the appearance of fairness a competitive bidding process was developed. Before bids were actually solicited, a huge flood ensued, draining Lake Michigan into the foundations of the city's skyscrapers and associated wiring. The ultimate cost was close to $2 billion.
How inefficient can the government be when it spends money? Howard cites a study that found that the Defense Department spent $2 billion per year on travel in the early 1990s... and $2.2 billion on procedures for travel reimbursement.
The book says that almost 10 percent of cases in Federal courts in the early 1990s were alleging employment discrimination. The government on the one hand mandates affirmative action, i.e., that employers select employees on the basis of skin color and affiliation with favored ethnic groups. Howard cites anecdotal evidence that universities are reluctant to hire black professors because they know that they will have an expensive discrimination suit on their hands if they don't give tenure to poor-performing professors who happen to be black.
The photo on the book jacket shows a white guy in a white shirt and says that he is the son of a Presbyterian minister. Can we write him off as another angry white guy saying that the U.S. is going to hell in a handbasket?
Consider that this book was published in 1994. If my memory of reading Conspiracy of Fools is correct, that's the year that Enron and its team of McKinsey's best and brightest went to the Securities and Exchange Commission and got them to approve the "mark to market" accounting that eventually forced the company to resort to fraud in order to continue reporting profits (since nearly all future profits had already been claimed). Despite what Howard describes as a near crippling burden of government regulation and inefficiency, the U.S. economy racked up some pretty good numbers right through 2007. So it certainly looks as though Howard was wrong about the urgency of the situation. (Rather comically, he referred to a health care "crisis" back in 1994, when we were squandering less than 14 percent of GDP on what we call health care; today the number is closer to 20 percent.) On the other hand, like Enron's great success, much of the U.S. boom turned out to be either fraudulent or in areas that the government hadn't yet figured out how to cripple, e.g., the Internet (let's see how vibrant Google is after the Feds establish a 5 cent tax on every search and then the states decide that they need an additional 3 cent tax depending on where the user is typing).
What would it be like if government were big, but could still get things done quickly? If officials frequently took bribes to toss the rule books aside? We know exactly what that would look like: China. For the 2008 Beijing Olympics, the Chinese built the world's largest airport terminal (and supposedly nicest; see the New Yorker), new highways, new public transit systems, a variety of stadiums, apartment complexes and hotels, etc. Most everything was done within about four years and it cost a lot, but did not bankrupt the country the way that the U.S. would have gone broke if we had tried to do anything similar at prevailing U.S. public works costs (see Boston's Big Dig for how we managed to spend $22 billion, including interest, to rebuild 3.5 miles of highway and one new 1.5-mile tunnel; the planning started in the 1970s, the environmental impact studies started in 1983, and the project was substantially completed in 2006).
Can we write off Philip K. Howard as yet another Libertarian who thinks that markets can fulfill most human needs better than government? Not really. Howard looks back with nostalgia on the FDR years when government was big but not sclerotic and there wasn't as much emphasis on fairness over effectiveness. But how would we codify that exactly? And remember that we have roughly 20 million government workers in the U.S. who only know how to do things the current (mind-numbingly slow and inefficient) way.
Howard advocates giving public officials more discretion. He notes that a repair to the Santa Monica Freeway after the 1994 Northridge earthquake was completed in 66 days rather than the usual four years. How? Governor Pete Wilson suspended all of the normal procedures and gave the contractor a financial incentive to complete the work as fast as possible. Howard contrasts British pollution regulation, which gives officials the authority to think about what would be the most cost-efficient and effective way for a factory to reduce emissions, to the American system, where we had tended to mandate specific technologies and equipment, regardless of whether they addressed the biggest pollution source at a particular factory.
Every rule out there was added for a reason. Presumably there had been some problem with a contractor or government official that led to the new rule being established. Howard may have a point in that there is no process for examining whether or not collectively all the rules make it impossible for anything to get done.
More: Read Death of Common Sense: How Law is Suffocating America.