ELLIOT: Regulatory reform takes guts, yields benefits

Steven Depolo—Flickr

Donald Trump says he wants to unfetter the American economy, and during the campaign he rightly identified over-regulation as a constraint on capital formation, business, hiring, and consumers. While the news media usually focused on his coal stance when he talked about deregulation, his regulatory reform promises were much broader. On his website he pledges to “no longer regulate our companies and our jobs out of existence.”Now he has made that pledge more concrete. In a Nov. 20 YouTube video address, Trump said that on “Day One” of his administration, he will issue a rule to executive agencies that “for every one new regulation, two old regulations must be eliminated — so important.”The “two die if one is nigh” idea works better as an aspirational signal than as a practical policy. Trump will find out quickly that eliminating specific regulations takes an enormous amount of willpower and is largely a thankless endeavor. The reason is that many who are hurt by over-regulation, especially consumers, are diffuse, unorganized, and largely unaware how they are being harmed — and unaware of the source of succor when that harm is removed.Two examples of regulatory reform attempts in North Carolina — one successful, one not — are instructive. The successful reform came about a year ago, when an environmental reform bill included a “self-audit” provision. The law codified an existing state policy that granted limited legal protection to a business that self-reported violations it had recently discovered. The idea is to encourage businesses, schools, and others to come forward with problems rather than hide them in fear of a fine.But even though the U.S. Environmental Protection Agency and a majority of states have similar laws, the panic-store left called it the “Polluter Protection Act” and “mourned” that “polluters will be allowed to regulate themselves.” Some of these people know better, and were just planning to use the issue as election fodder, but that hardly matters. The General Assembly and Gov. Pat McCrory stuck to their guns and passed the bill, as they should have.In the second example, things worked out differently. In a movement led by the John Locke Foundation, the legislature began to focus on modest reform of North Carolina’s occupational licensing laws, which are among the most burdensome in the nation. Probably the most egregious is the oft-cited example of hair-braiding, but there are many others. (As bizarre as it sounds, it is illegal for someone to braid hair for money without first obtaining a license from a state-empowered board.)In the drive to help low-income North Carolinians — both entrepreneurs and consumers — the right-leaning JLF was joined by the left-of-center Justice Center. Both pointed out that licensure requirements raise prices for consumers and barriers to entry for potential competition; they also raise wages for guildmembers but offer little discernible quality improvement. But legislators balked when guildmembers presented them with a parade of horrible hypotheticals. Reform was shelved for the session.So the state’s right-wing and left-wing think tanks agree, but nothing gets done because the entrenched powers scare the people’s representatives. This is government at its swampiest.Trump should expect these kinds of fear-mongering tactics and more when he tries to loosen the burdens on consumers and businesses. It takes guts, but it will be worth it — as long as he doesn’t expect much thanks.