Archive for the ‘Regulation’ Category.

Government in my Mailbox

I just got back from about 10 days on vacation.  My bookkeeper takes care of all the mail that is vendor related, and I get what is left.  Unsurprisingly, I had about 60 pieces of mail, which is actually pretty low since we are in our off season.

However, when I started going through it, I was struck by how much was government related.  Out of those 60 pieces of mail, 5 were small checks (pay phone commissions, that type of thing), about 5 were from private parties and the rest was all government -- department of labor, department of revenue and taxation, vehicle registrations and issues, etc.  Have we really come to the point that 80% of my correspondence is with government regulatory and taxation authorities?  Part of this is because we are in 10 states, as I have discussed here, but it still seems excessive.

The one dominant piece of mail was a survey from the Department of Labor in every state we operate in.  The first thing I do with these surveys, as discussed here, is check to see if they are voluntary.  If so, they immediately get circular filed.  I don't want to spend the time, and I don't think the government needs the information.  In large part data is just the job security of the bureaucracy - more data means more people collecting and analyzing and reporting, and, the worst, proposing new regulations and taxes based on the data.

Two states, California and Florida, required the survey get done, so I did it.  Actually completing these surveys really got me irritated,  There is very little on this thing that we don't already report to the government.  Already, we have to report every individual person's wages each month or quarter.  Why is this not enough?  Mostly, this survey just asks me to aggregate the data the government already has in different ways.  Why can't they do that?  What are computers for, anyway?

UPDATE #1

I got the following comment:

And you'd like them to propose regulations based on incomplete data?

It is not the accuracy of data that is objectionable - it is the ridiculous detail.  For example, does the government really need to know monthly employment levels by detailed SIC code by county?  This just leads to some government staffer saying - hay, the employment in the tourism business in Maricopa county fell by 1% in August - we need a taxpayer funded initiative to promote tourism there, yada yada.  And whala, pork is born.  See examples here.

Criminalizing the Fast Forward Button

Wow, the concept of fair use is sure taking a beating.  Politicians are sure carrying a lot of water lately for media companies.  Check out this article at Incite.  This is not that far-fetched.  A couple of years ago, ReplayTV added a jump ahead 30 seconds button on their machine that would instantly skip a standard commercial.  TIVO, the industry leader, has held off matching this function due to industry pressure.

By the way, I don't know if it works but this is posted as a hack to get a 30 second skip on TIVO machines. (more here and lots more sites via google search)

Should We Take Another Shot at Nuclear Power?

An article I saw on a new process for creating hydrogen via nuclear power (courtesy of the Commons) got me to thinking about what a screw-up our first (and really only) generation of nuclear power plant building was.  Learning curve problems with a new technology, combined with an insane regulatory regime and uninformed panicky public response to nuclear power issues led to a shut down in the construction of nuclear power plants, and made the last ones built into memorable financial disasters

Coming from the aerospace industry, I am used to a strong regime of government safety regulation.  The differences in how aircraft construction and nuclear power construction are regulated are very informative, so I want to focus on them in this post.

First, however, its instructive to list some of the reasons why nuclear power is attractive:

  • Excepting the radioactive waste issue, which we will discuss below, nuclear power is essentially emissions free, and is totally devoid of any greenhouse gas emissions that may contribute to global warming.  There are also no particulate emissions or sulfur dioxide emissions, which are blamed for various woes.
  • Nuclear fuel, ie uranium and potentially thorium, is incredibly abundant and currently inexpensive.  Also, much of the world's reserves are located in free democracies rather than Islamic dictatorships

Nuclear Plant Regulation

Nuclear plants in the U.S. were mainly designed as one-offs.  In other words, each one was a relatively unique design.  Each design therefore required regulatory review and approval in depth, processes that could take years.  Since the process took so long, changes in personnel or public attitudes often resulted in revisiting certain already approved design decisions, sometimes even after that part of the plant was built, resulting in expensive modifications.

In addition, uninformed public hysteria was allowed to take precedence in the permitting process ahead of fact-based scientific analysis. That is not to say that there are not potential dangers - Chernobyl proved that, but one can pretty easily argue that Chernobyl was more consistent with Soviet era mega-industrial disasters that occurred in many industries than the general experience with nuclear power. 

In most cases, the public has no real idea of the risks of nuclear plants, especially vs. other risks they might face.  People who might never live in the vicinity of a nuclear plant live downwind of plants using hydrogen cyanide or hydrogen sulfide as process gasses; or near plants with the potential for runaway exothermic reactions, leading to explosions and/or toxic gas releases (Bhopal anyone?)  Far more people were killed by the explosion of a shipful of fertilizer in Texas City than have been injured by nuclear power in the United States.

Aircraft Regulation

If aircraft construction was regulated like nuclear power plants, there would be no aviation industry.  In the aircraft industry, aircraft makers go through an extensive approval and testing process to get a basic design (e.g. the 737-300) approved by the government as safe.  Then, as long as they keep producing to this design, they can keep making copies with minimal additional design scrutiny.  Instead, the manufacturing process is carefully checked to make sure that it is reliably producing aircraft to the design already deemed safe.  If aircraft makers want to make a change to the aircraft, that change must be approved with a fairly in-depth process.

Beyond the reduction in design cost for the 2nd airplane of a series (and 3rd, etc.), this approach also yields strong regulatory benefits.  For example, if the in a particular aircraft, then the government can issue a bulletin to require a new approved design be retrofitted in all other aircraft of this series.  This happens all the time in commercial aviation.

One can see how this might make nuclear power plant construction viable again.  Urging major construction companies to come up with a design that could be reused would greatly reduce the cost of design and construction of plants.  There might still be several designs, since competing companies would likely have their own designs, but this same is true in aerospace with Boeing, Airbus and smaller jet manufacturers Embraer and Bombardier.

Nuclear Waste

The nuclear waste disposal problem is still not fully solved, but technology is making inroads, as in here and here and here.

I would argue that the issue of nuclear waste is a red herring anyway -- waste from nuclear power is not necesarily worse than from other processes, its just more visible and scary sounding.  Current power plants generate millions of tons of waste a year.  However, since they spread this waste evenly throughout the atmosphere, it doesn't always call attention to itself.  Radioactive waste, though small in volume, tends to be concentrated and admittedly tricky to handle.  It can't be just dumped in the air or in the water and forgotten about - it has to be actively tended for years.

Other Reading

Increasingly, many environmentalists are starting to revisit their opposition to nuclear power as the environmental costs are better understood (even technologies formally much-loved by environmentalists are coming under scrutiny for their costs -- do we really want all of our wilderness to look like this and this?)  Such articles include this and this.  Other roundups about the benefits of revisiting nuclear power are here and here.

UPDATE

My gut feel is that nuclear power, if intelligently regulated, could be economically competitive with many other energy sources today, but I don't know for sure.  Jerry Taylor and Co. at Cato think otherwise, and they have certainly put a lot more research into it than I have.  I am certainly loathe to start US energy policy, complete with massive subsidies, down yet another uneconomic blind alley.

Vaccine Regulatory Mess

Flu shot shortages, free market failure or regulatory/litigation mess.  You decide.

VOIP Regulation

Good roundup over at the Knowlege Problem on regulation of Voice over IP (VOIP - basically telephone calls over broadband Internet). 

The Federal Communications Commission declared today that a type of Internet telephony service offered by Vonage Holdings Corp. called DigitalVoice is not subject to traditional state public utility regulation.

The Commission also stated that other types of IP-enabled services, such as those offered by cable companies, that have basic characteristics similar to DigitalVoice would also not be subject to traditional state public utility regulation.

This may be good news.  If it keeps regulation low and lets this new technology continue to innovate and find its way in the market, great.  If it is just two bullies snarling over who gets to take my lunch money, then its not-so-good news.

Rule of the Courts

This post in The Commons raises an issue that has concerned me for years.  Increasingly, activists are using the courts to achieve regulatory goals that legislatures and/or voters have rejected.  While I am still not sure there is constitutional justification for the degree of legislated regulation that exists in this country, there certainly is no basis for individual courts running whole industries (e.g. telecom, tobacco). 

State attorneys general and private plaintiffs lawyers are increasingly turning to the nation's courts to adopt regulatory measures that legislatures reject. Such "regulation by litigation" has been used against numerous unpopular industries in suits by government and private attorneys. The first set of cases sought to regulate and extract rents from the tobacco companies, but subsequent cases have been brought by both private lawyers and government agencies against gun makers, lead-paint producers, coal-burning utilities, diesel engine manufacturers, and many other industries. In each case, the aim is to extract rents and impose regulatory controls that could not be adopted through the legislative or administrative process.

Read the whole thing.

Potential Changes in Employment Law

George's Employment Blawg has a nice roundup of what folks might expect in the way of changing labor law and employment regulation from a second Bush term.  As I posted below, I do think that the Bush administration has a pent-up backlog of domestic policy that it wants to tackle.

Failure of Socialized Medicine in Canada

Socialized medicine supporters in the US often talk about Canada's really, really good and affordable care. Except no one can have any, but if they could get any care, I am sure they would love it. Check out this company, Timely Medical Alternatives. Specializes in getting you to the US so you can actually have your operation. Sure must be a mess if there is a niche for this.

And by the way, please don't tell me about lower drug prices in Canada. International markets pay marginal cost for drugs (ie just production cost) and we in the US pay full cost (ie including the development costs of the drug plus all the failures). Expanded programs to import marginal cost drugs from Canada will only mean that Canadian drug prices will go up - ours are not going down to those levels. And, if you pass a law saying somehow that they can't raise their prices in Canada and we can import at those prices, then drug R&D is over. Even if you told the drug companies that they were working for the good of man rather than profits, and dropped all their profits into lower pricing, you wouldn't get more than a 10-20% (depending on the company) price decrease for drugs. Are you really ready to kill all future drug innovations for a 15% discount on the current ones?

UPDATE

The Canadians have now made clear that they will not accept the Kerry plan for mass drug re-importation from Canada. Why? One would think that the socialized medicine supporting politicians in Canada would support Kerry and other socialized medicine supporters in the US. Fellow travelers stick together.

The reason, is, of course, that the Canadians have long ago recognized the truth in what I said above. US massive drug re-importation will just cause drug companies to raise prices in the target countries. Canada likes the below-full-cost pricing they get on drugs, and are opting to let the US keep paying for its drug development.

Voluntary Government Surveys

Our company operates in 10 states, so that means, each month, 16 sales tax reports (including counties and cities with separate reports), 10 withholding reports, 10 SUI reports, several workers comp reports not to mention annual health inspection reports, occupancy permit renewals, federal and state income tax forms, foreign corporation annual reports, etc, etc.

So, as happened today, when I get an optional monthly or quarterly survey to help support the commerce department data (or maybe it was labor department) it goes straight to the trash. I am sure this makes me a bad American, but does any small business owner really have time to fill out this junk, especially since the data will probably be used by some Congressman as an excuse to regulate me in some new and intrusive way?

The Commerce and Labor department data are often criticized for under-weighting small businesses and self-employment. I certainly believe it, and am proudly part of the problem.