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Railroad Safety and Cost-Benefit Analysis
Economists are not anti-regulation, but they are skeptical of rules and mandates that don’t pass a cost-benefit test.
Politicians, meanwhile, generally don’t care about regulation. They are not impervious to evidence and analysis, but they mostly want to maximize votes, power, and money.
If they can achieve those goals by deregulating (as happened during the Carter, Reagan, and Clintonyears), we get better policy.
But if politicians think it is in their self interest to impose more red tape, that is likely to happen.
Sadly, it will even happen when cost-benefit analysis shows that more regulation will backfire because of tradeoffs and unintended consequences.
Consider what is now happening with regulation of the railroads.
Eric Boehm recently wrote about this topic for Reason. Here are some excerpts.
…in May 2019, the Department of Transportation withdrew a proposed regulation that would have required all freight trains in the United States to operate with two-person crews. …After three years of investigating the issue, the FRA reported that accident data did not show two-person crews to be any safer than one-person crews. The National Transportation Safety Board (NTSB) agreed, telling the FRA that “There is insufficient data to demonstrate that accidents are avoided by having a second qualified person in the cab.”
Then, in February, a train derailed in East Palestine, Ohio. It spilled vinyl chloride… Ohio Sens. Sherrod Brown, a Democrat, and J.D. Vance, a Republican, have rushed forward with the Railway Safety Act, a bill that would impose the two-person crew requirement that the FRA considered and rejected in 2019. The rule still has nothing to do with safety. Indeed, the train that derailed in East Palestine had a crew of three aboard. …As such, it is a useful illustration of how right-wing populists like Vance are actually advancing long-running goals of the political left… That includes Trump, of course. Even though it was his administration that killed the two-man-crew mandate in 2019, the former president is now a strong supporter of the bill that would impose the same mandate.
I’m guessing that Trump doesn’t realize that he’s flip-flopping on the issue. And he probably wouldn’t care if he did know.
J.D. Vance, however, probably is aware that he’s pushing bad policy. But he presumably thinks the potential political benefits for himself matter more than the economic harm to the country.
The two-man-crew mandate is just the start. The Railway Safety Act also grants broad new powers to Transportation Secretary Pete Buttigieg, who would be responsible for creating a new regulatory regime to govern trackside sensors and the power to write new regulations for railcars and their routine inspections. Regulations that make it more difficult or expensive to ship goods by rail will actually undercut safety by pushing more hazardous materials onto roadways… Legislation that exclusively piles new regulations onto rail will trigger “higher rail shipping costs and more goods traveling by truck, which would be a decidedly inferior outcome for society,”… In supporting the Railway Safety Act, Vance and Trump are signaling support for a litany of left-wing goals: growing the regulatory state, giving bureaucrats more power over American businesses, and protectionism for union jobs. They’re also falling into the same trap as many progressives: ignoring trade-offs and obvious unintended consequences.
Sadly, enactment of dirigiste policy is very typical when politicians only care about headlines and ignore cost-benefit analysis. Anti-vaping rules, economic lockdowns, recycling policy, money laundering laws, and the Food and Drug Administration are all examples of this phenomenon.
The bottom line is that Sen. Vance and Pres. Trump are wrong. The correct answer is free enterprise, not more power for politicians and bureaucrats.
P.S. Cost-benefit analysis puts a lot of people to sleep, but Remy managed to make the topic very amusing in this video.
Open letter to President Obama (Part 704)
(Emailed to White House on 6-25-13.)
President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500
Dear Mr. President,
I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on what is going on out here.
The federal government debt is growing so much that it is endangering us because if things keep going like they are now we will not have any money left for the national defense because we are so far in debt as a nation. We have been spending so much on our welfare state through food stamps and other programs that I am worrying that many of our citizens are becoming more dependent on government and in many cases they are losing their incentive to work hard because of the welfare trap the government has put in place. Other nations in Europe have gone down this road and we see what mess this has gotten them in. People really are losing their faith in big government and they want more liberty back. It seems to me we have to get back to the founding principles that made our country great. We also need to realize that a big government will encourage waste and corruption. The recent scandals in our government have proved my point. In fact, the jokes you made at Ohio State about possibly auditing them are not so funny now that reality shows how the IRS was acting more like a monster out of control. Also raising taxes on the job creators is a very bad idea too. The Laffer Curve clearly demonstrates that when the tax rates are raised many individuals will move their investments to places where they will not get taxed as much.
______________________
17 Reasons the large national debt is a big deal!!!
We got to stop spending so much money and start paying off our national debt or the future of our children and grandchildren will be very sad indeed. Everyone knows that entitlement spending must be cut but it seems we are not brave enough to do it. I have contacted my Congressmen and Senators over and over but nothing is getting done!!! At least there are 66 conservative Republicans in the House that have stood up and voted against raising the debt ceiling.
June 17, 2013 at 7:13 am
Remember the debt? That $17 trillion problem? Some in Washington seem to think it’s gone away.
The Washington Post reported that “the national debt is no longer growing out of control.” Lawmakers and liberal inside-the-Beltway organizations are floating the notion that it’s not a high priority any more.
We beg to differ, so we came up with 17 reasons that $17 trillion in debt is still a big, bad deal.
1. $53,769 – Your share of the national debt.
As Washington continues to spend more than it can afford, every American will be on the hook for this massive debt burden.
SHARE this graphic.
2. Personal income will be lower.
The skyrocketing debt could cause families to lose up to $11,000 on their income every year. That’s enough to send the kids to a state college or move to a nicer neighborhood.
3. Fewer jobs and lower salaries.
High government spending with no accountability eliminates opportunities for career advancement, paralyzes job creation, and lowers wages and salaries.
4. Higher interest rates.
Some families and businesses won’t be able to borrow money because of high interest rates on mortgages, car loans, and more – the dream of starting a business could be out of reach.
5. High debt and high spending won’t help the economy.
Journalists should check with both sides before committing pen to paper, especially those at respectable outlets like The Washington Post and The New York Times. A $17 trillion debt only hurts the economy.
6. What economic growth?
High-debt economies similar to America’s current state grew by one-third less than their low-debt counterparts.
7. Eventually, someone has to pay the nation’s $17 trillion credit card bill, and Washington has nominated your family.
It’s wildly irresponsible to never reduce expenses, yet Washington continues to spend, refusing to acknowledge the repercussions.
>>>Watch this video to see how scary $17 trillion really is for your family.
8. Jeopardizes the stability of Medicare, Social Security, and Medicaid.
Millions of people depend on Medicare, Medicaid, and Social Security, but these programs are also the main drivers of the growing debt. Congress has yet to take the steps needed to make these programs affordable and sustainable to preserve benefits for those who need them the most.
9. Washington collects a lot, and then spends a ton. Where are your tax dollars going?
In 2012, Washington collected $2.4 trillion in taxes—more than $20,000 per household. But it wasn’t enough for Washington’s spending habits. The federal government actually spent $3.5 trillion.
>>> Reality check: See where your tax dollars really went.
10. Young people face a diminished future.
College students from all over the country got together in February at a “Millennial Meetup” to talk about how the national debt impacts their generation.
>>>Shorter version: They’re not happy. Watch now.
11. Without cutting spending and reducing the debt, big-government corruption and special interests only get bigger.
The national debt is an uphill battle in a city where politicians too often refuse to relinquish power, to the detriment of America.
12. Harmful effects are permanent.
Astronomical debt lowers incomes and well-being permanently, not just temporarily. A one-time major increase in government debt is typically a permanent addition, and the dragging effects on the economy are long-lasting.
13. The biggest threat to U.S. security.
Even President Obama’s former Chairman of the Joint Chiefs of Staff thinks so:
SHARE this graphic.
14. Makes us more vulnerable to the next economic crisis.
According to the Congressional Budget Office’s 2012 Long-Term Budget Outlook, “growing federal debt also would increase the probability of a sudden fiscal crisis.”
15. Washington racked up $300 billion in more debt in less than four months.
Our nation is on a dangerous fiscal course, and it’s time for lawmakers to steer us out of the coming debt storm.
16. High debt makes America weaker.
Even Britain’s Liam Fox warns America: Fix the debt problem now, or suffer the consequences of less power on the world stage.
17. High debt crowds out the valuable functions of government.
By disregarding the limits on government in the Constitution, Congress thwarts the foundation of our freedoms.
Read the Morning Bell and more en español every day at Heritage Libertad.
_____________
Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.
Sincerely,
Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733, lowcostsqueegees@yahoo.com
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By Everette Hatcher III | Posted in Current Events | Edit | Comments (0)
The Daily Hatch 