1 00:00:05,080 --> 00:00:08,479 Speaker 1: On this episode of news World. Shortly after taking office 2 00:00:08,520 --> 00:00:12,639 Speaker 1: in twenty twenty two, Virginia Governor Glenn Youngkin issued an 3 00:00:12,640 --> 00:00:16,800 Speaker 1: executive order setting the ambitious goal of cutting regulatory requirements 4 00:00:17,160 --> 00:00:20,160 Speaker 1: by twenty five percent by the end of his term. 5 00:00:20,640 --> 00:00:23,919 Speaker 1: As of this month, his administrations hit the target. In 6 00:00:24,000 --> 00:00:28,840 Speaker 1: Virginia's Office of Regulatory Management anticipates cutting nearly thirty three 7 00:00:28,920 --> 00:00:31,639 Speaker 1: percent with the end of his term. And what's the 8 00:00:31,680 --> 00:00:35,040 Speaker 1: return of the investment so far? At saving Virginia businesses 9 00:00:35,040 --> 00:00:38,800 Speaker 1: and citizens more than one billion, two hundred million dollars 10 00:00:38,880 --> 00:00:42,879 Speaker 1: a year. Virginia is showing the federal government the substantial 11 00:00:43,000 --> 00:00:46,599 Speaker 1: regulatory reform can be accomplished. Here to talk about how 12 00:00:46,760 --> 00:00:50,199 Speaker 1: Washington needs sacked in regulatory reform. I'm really pleased to 13 00:00:50,240 --> 00:00:54,360 Speaker 1: welcome my guest, Patrick McLachlin. He is a research fellow 14 00:00:54,400 --> 00:00:57,320 Speaker 1: at the Hoover Institution, where he leads the quant Government 15 00:00:57,560 --> 00:01:01,120 Speaker 1: Analytics Project with a focus on reg regulations and the 16 00:01:01,160 --> 00:01:15,840 Speaker 1: regulatory process. Patrick, Welcome and thank you for joining me 17 00:01:15,880 --> 00:01:16,479 Speaker 1: on newts World. 18 00:01:16,600 --> 00:01:17,800 Speaker 2: It's my pleasure to be here. 19 00:01:17,840 --> 00:01:21,040 Speaker 1: Thanks first of all, generators, our listeners, to the Hoover 20 00:01:21,160 --> 00:01:23,759 Speaker 1: Institution itself. Tell us a little bit about it. 21 00:01:24,160 --> 00:01:26,600 Speaker 2: Er institution been around for quite a while. 22 00:01:26,880 --> 00:01:29,720 Speaker 3: Was founded at Stanford University in the first half of 23 00:01:29,760 --> 00:01:33,200 Speaker 3: the twentieth century with a focus at the time on 24 00:01:33,760 --> 00:01:36,800 Speaker 3: peace and the post devastation of the First World War, 25 00:01:37,360 --> 00:01:41,320 Speaker 3: but expanded into a lot of other areas, economics. 26 00:01:40,680 --> 00:01:41,480 Speaker 2: Being one of them. 27 00:01:41,600 --> 00:01:43,720 Speaker 3: I am an economist by training, and so I've been 28 00:01:43,720 --> 00:01:47,600 Speaker 3: brought in there to work on research related to the 29 00:01:47,640 --> 00:01:51,680 Speaker 3: economics of regulation and deregulation. But Hoover Institution goes a 30 00:01:51,680 --> 00:01:54,600 Speaker 3: lot of different directions. It's a large shop, and it's 31 00:01:54,640 --> 00:01:59,080 Speaker 3: generally concerned with the overlap of public policy and things 32 00:01:59,120 --> 00:02:02,920 Speaker 3: like economics or historical knowledge history. I guess I should 33 00:02:02,960 --> 00:02:06,240 Speaker 3: say public policy oriented field of study. 34 00:02:06,600 --> 00:02:10,440 Speaker 1: There's a certain elegance there. You have the afternoon wine 35 00:02:10,480 --> 00:02:14,200 Speaker 1: and cookies and a whole sense of people who are 36 00:02:14,840 --> 00:02:17,200 Speaker 1: not involved in a daily fight, but they're involved in 37 00:02:17,280 --> 00:02:20,920 Speaker 1: thinking about very big ideas and very long term impacts. 38 00:02:21,680 --> 00:02:22,720 Speaker 2: Yeah, that's a good point. 39 00:02:22,800 --> 00:02:26,040 Speaker 3: I've worked in other public policy oriented shops in the past, 40 00:02:26,040 --> 00:02:30,320 Speaker 3: and it really does seem like Hoover values the idea creation. 41 00:02:30,280 --> 00:02:33,200 Speaker 2: That sometimes can only occur in a place like that. 42 00:02:33,200 --> 00:02:36,680 Speaker 1: That's right. I did always surprises people in Washington where 43 00:02:36,680 --> 00:02:40,760 Speaker 1: the urgent drives out the important that really thinking takes time. 44 00:02:41,560 --> 00:02:43,320 Speaker 2: I'm glad you said it. I'll relay that to my 45 00:02:43,440 --> 00:02:44,360 Speaker 2: boss over at Hoover. 46 00:02:45,360 --> 00:02:48,720 Speaker 1: There you go, So you lead what's the rig data 47 00:02:49,200 --> 00:02:51,919 Speaker 1: and quant gov projects? Okay, you have to tell us 48 00:02:52,080 --> 00:02:54,920 Speaker 1: what are REGG data and quant gov projects? 49 00:02:55,680 --> 00:02:56,000 Speaker 2: Sure? 50 00:02:56,160 --> 00:02:59,480 Speaker 3: I think the easiest way to understand what I'm doing 51 00:02:59,480 --> 00:03:03,519 Speaker 3: in these product is to imagine going into a library. 52 00:03:03,800 --> 00:03:07,080 Speaker 3: You could probably do this in your town right now. 53 00:03:07,160 --> 00:03:09,560 Speaker 3: Go into a library and find the code of Federal 54 00:03:09,600 --> 00:03:13,000 Speaker 3: Regulations and just look how many volumes of books that is, 55 00:03:13,040 --> 00:03:15,600 Speaker 3: and you're going to see there's hundreds of volumes of books. 56 00:03:15,600 --> 00:03:19,400 Speaker 3: It's going to take up multiple shelves. And if you 57 00:03:19,560 --> 00:03:21,920 Speaker 3: wanted to have any sort of idea of what is 58 00:03:22,000 --> 00:03:25,880 Speaker 3: in all of these hundreds of thousands of pages of text, 59 00:03:26,639 --> 00:03:29,200 Speaker 3: you would have to have either some sort of table 60 00:03:29,200 --> 00:03:31,639 Speaker 3: of contents and index and go into specific spots, but 61 00:03:31,720 --> 00:03:33,919 Speaker 3: you still wouldn't know what everything else is, or you'd 62 00:03:33,960 --> 00:03:37,640 Speaker 3: have to use computer programs. And that is what the 63 00:03:37,720 --> 00:03:41,840 Speaker 3: quant of and reg data projects are. It's essentially using 64 00:03:41,880 --> 00:03:45,920 Speaker 3: computer programs to go through all of the volume of regulations, 65 00:03:45,920 --> 00:03:48,240 Speaker 3: not just at the federal level, but across all the 66 00:03:48,320 --> 00:03:51,040 Speaker 3: states and in some other countries as well, to better 67 00:03:51,160 --> 00:03:54,560 Speaker 3: understand what is on the books, how that's changed over time, 68 00:03:54,680 --> 00:03:58,640 Speaker 3: and how those changes affect our economy and outcomes for individuals. 69 00:03:59,280 --> 00:04:02,680 Speaker 1: You indicate that around nineteen seventy there were about four 70 00:04:02,760 --> 00:04:06,800 Speaker 1: hundred thousand restrictive terms, terms of what you shall or 71 00:04:06,800 --> 00:04:10,400 Speaker 1: you shall not, you may not, and that's now jumped 72 00:04:10,440 --> 00:04:14,120 Speaker 1: to one point one million today. So, in a sense, 73 00:04:15,280 --> 00:04:20,400 Speaker 1: there are in government regulations so many different prohibitions and 74 00:04:20,560 --> 00:04:25,000 Speaker 1: enforcements that a normal citizen actually is almost always in 75 00:04:25,040 --> 00:04:26,360 Speaker 1: some way violating something. 76 00:04:27,279 --> 00:04:30,280 Speaker 3: Yeah, you're pretty much guaranteed to be breaking a rule. 77 00:04:30,360 --> 00:04:31,479 Speaker 3: You might even be a criminal. 78 00:04:32,080 --> 00:04:36,680 Speaker 1: Yeah, Attorney General Jackson told Roosevelt, I think about nineteen 79 00:04:36,720 --> 00:04:39,240 Speaker 1: thirty nine or forty that we now had so many 80 00:04:39,320 --> 00:04:42,279 Speaker 1: laws that you've virtually guaranteed that everybody is a criminal. 81 00:04:42,760 --> 00:04:44,719 Speaker 1: And that was back when it was much simpler and 82 00:04:44,800 --> 00:04:48,200 Speaker 1: much smaller. So why do you think the growth has 83 00:04:48,240 --> 00:04:51,800 Speaker 1: been from four hundred thousand and seventy to over one 84 00:04:51,839 --> 00:04:54,920 Speaker 1: point one million today? What is there in the system 85 00:04:54,960 --> 00:04:57,400 Speaker 1: as is evolved that leads it to that kind of 86 00:04:57,440 --> 00:04:58,640 Speaker 1: coercive language. 87 00:05:00,000 --> 00:05:02,400 Speaker 2: There's I guess two things I would highlight. 88 00:05:02,760 --> 00:05:07,320 Speaker 3: One is the whole Administrative Procedure Act, the process by 89 00:05:07,320 --> 00:05:12,680 Speaker 3: which regulations are made is bias towards the creation of 90 00:05:12,839 --> 00:05:17,279 Speaker 3: new regulations as opposed to managing the stock of regulations 91 00:05:17,320 --> 00:05:20,400 Speaker 3: on the books. There's a whole, well defined process for 92 00:05:20,520 --> 00:05:23,760 Speaker 3: making new rules, but there's not a defined process for 93 00:05:24,400 --> 00:05:26,680 Speaker 3: re examination of the existing ones at all. 94 00:05:26,760 --> 00:05:27,440 Speaker 2: So there's that. 95 00:05:28,000 --> 00:05:30,400 Speaker 3: And then the second thing is if you look back 96 00:05:30,440 --> 00:05:34,039 Speaker 3: over time, there's, as you've already highlighted, a tendency for 97 00:05:34,160 --> 00:05:38,560 Speaker 3: regulations to grow, but that growth rate does change a lot. 98 00:05:38,720 --> 00:05:41,039 Speaker 3: With aw massive growth in the nineteen seventies, and that 99 00:05:41,160 --> 00:05:44,279 Speaker 3: was driven by the creation of new regulatory agencies. 100 00:05:44,320 --> 00:05:47,440 Speaker 2: The EPA, for example, was created then, so that's a 101 00:05:47,480 --> 00:05:48,039 Speaker 2: big driver. 102 00:05:48,279 --> 00:05:51,039 Speaker 3: Even in later years, we saw in the first Obama 103 00:05:51,120 --> 00:05:54,880 Speaker 3: administration very rapid growth, and that was driven by the 104 00:05:54,920 --> 00:05:58,159 Speaker 3: creation of the CFPB, you know, post Dot Frankness Consumer 105 00:05:58,279 --> 00:06:01,719 Speaker 3: Financial Protection Bureau. So it's the creation of new agencies 106 00:06:01,760 --> 00:06:05,599 Speaker 3: along the way will create spikes in the growth of regulation. 107 00:06:06,200 --> 00:06:09,480 Speaker 1: It always struck me that the actual cost of these 108 00:06:09,520 --> 00:06:16,039 Speaker 1: regulations is vastly greater then shows up in a direct accounting, 109 00:06:16,640 --> 00:06:20,760 Speaker 1: particularly for smaller businesses, they just take time. You can't 110 00:06:20,760 --> 00:06:24,360 Speaker 1: be focusing on your customers or on the next big 111 00:06:24,400 --> 00:06:28,040 Speaker 1: idea or productivity. You're focused on meeting the government's requirements. 112 00:06:28,600 --> 00:06:29,440 Speaker 2: That's exactly right. 113 00:06:29,480 --> 00:06:31,720 Speaker 3: It's the opportunity cost here that we need to be 114 00:06:32,080 --> 00:06:35,000 Speaker 3: thinking about. I co author to study on this, and 115 00:06:35,040 --> 00:06:36,800 Speaker 3: this is why I created this whole project in the 116 00:06:36,800 --> 00:06:39,880 Speaker 3: first place. I wanted to know what is the effect 117 00:06:40,000 --> 00:06:43,839 Speaker 3: of this accumulation of regulations on overall economic growth, Not 118 00:06:43,960 --> 00:06:47,440 Speaker 3: just looking at paperwork costs that occur here and there, 119 00:06:47,760 --> 00:06:50,320 Speaker 3: but looking at the opportunity costs, like what does the 120 00:06:50,440 --> 00:06:54,720 Speaker 3: entrepreneur who's doing that paperwork not do instead? So I 121 00:06:54,839 --> 00:06:58,920 Speaker 3: studied the patterns of business investments over time and how 122 00:06:59,040 --> 00:07:04,800 Speaker 3: regulatory accumulate affects that and found a substantial relationship there, statistically, 123 00:07:04,920 --> 00:07:09,800 Speaker 3: an economically significant relationship between the accumulation of regulations and 124 00:07:09,920 --> 00:07:15,320 Speaker 3: business investment. Now, business investment drives productivity growth, which in 125 00:07:15,360 --> 00:07:19,120 Speaker 3: turn drives overall economic growth, and so not to get 126 00:07:19,160 --> 00:07:21,440 Speaker 3: too deep in the weeds on this paper, but we 127 00:07:21,560 --> 00:07:24,880 Speaker 3: found that the effect of the build up of rules 128 00:07:25,240 --> 00:07:29,480 Speaker 3: slowed economic growth overall by nearly one percentage point annually. 129 00:07:29,960 --> 00:07:31,040 Speaker 2: That's a massive effect. 130 00:07:31,080 --> 00:07:34,120 Speaker 3: Losing nearly one percentage point from growth overall year after 131 00:07:34,200 --> 00:07:36,400 Speaker 3: year is a massive effect. And that's the sort of 132 00:07:37,000 --> 00:07:41,000 Speaker 3: hidden opportunity costs that we don't see without careful study 133 00:07:41,000 --> 00:07:43,520 Speaker 3: of the sort of second and third order effects of 134 00:07:43,840 --> 00:07:44,960 Speaker 3: regulatory accumulation. 135 00:07:45,560 --> 00:07:49,480 Speaker 1: And you're asketimate if we had not had this regulatory 136 00:07:49,560 --> 00:07:53,880 Speaker 1: burden slowing everything down, how much bigger would the American 137 00:07:53,920 --> 00:07:54,960 Speaker 1: economy be today? 138 00:07:55,760 --> 00:07:58,600 Speaker 3: In this study which we published in twenty twenty, we 139 00:07:58,760 --> 00:08:03,480 Speaker 3: projected that if we had held regulation constant at the 140 00:08:03,560 --> 00:08:06,920 Speaker 3: level observed in nineteen eighty, so, instead of seeing regulation 141 00:08:07,080 --> 00:08:09,680 Speaker 3: grow between nineteen eighty and twenty twelve, which was the 142 00:08:09,760 --> 00:08:12,000 Speaker 3: last year of data in this study, say we had 143 00:08:12,080 --> 00:08:15,840 Speaker 3: implemented some sort of one in one out regulatory budget 144 00:08:15,840 --> 00:08:18,920 Speaker 3: starting nineteen eighty, Instead, the economy would have been about 145 00:08:18,920 --> 00:08:21,360 Speaker 3: twenty five percent larger by the year twenty twelve. It's 146 00:08:21,360 --> 00:08:24,120 Speaker 3: about four trillion dollars and twenty twelve dollars. 147 00:08:24,520 --> 00:08:27,000 Speaker 1: Bring that up to today, that would probably be somewhere 148 00:08:27,000 --> 00:08:29,040 Speaker 1: on the six or seven trillion dollar range. 149 00:08:29,400 --> 00:08:30,760 Speaker 2: Yeah, definitely, the. 150 00:08:30,760 --> 00:08:32,960 Speaker 1: Economy, once it's that much larger, would be that much 151 00:08:33,000 --> 00:08:34,119 Speaker 1: larger every single. 152 00:08:33,920 --> 00:08:37,480 Speaker 2: Year, exactly. Yeah, we'd be that much more prosperous. 153 00:08:37,120 --> 00:08:40,400 Speaker 1: So the tax consequence, so that would be something like 154 00:08:40,480 --> 00:08:43,960 Speaker 1: more than a trillion dollars of additional revenue with no 155 00:08:44,080 --> 00:08:44,800 Speaker 1: tax increase. 156 00:08:45,360 --> 00:08:47,000 Speaker 2: I like where you're heading with this. 157 00:08:47,160 --> 00:08:49,319 Speaker 3: I think there's a big effect on the tax base 158 00:08:49,440 --> 00:08:50,880 Speaker 3: of any sort of lost growth. 159 00:08:50,920 --> 00:08:51,440 Speaker 2: That's right. 160 00:08:51,720 --> 00:08:54,720 Speaker 1: I'm passionate about getting back to a balanced budget and 161 00:08:54,800 --> 00:08:58,040 Speaker 1: paying down the debt because it's utterly crazy that we're 162 00:08:58,040 --> 00:09:00,920 Speaker 1: currently spending over a trillion dollars a year just on 163 00:09:01,040 --> 00:09:04,079 Speaker 1: bond holders for the national debt, more than we pay 164 00:09:04,120 --> 00:09:06,319 Speaker 1: on defense, for example. I mean, it seems to me 165 00:09:06,360 --> 00:09:09,000 Speaker 1: there are two different things. One is there's the question 166 00:09:09,120 --> 00:09:13,120 Speaker 1: of just economic friction, and the second is there's a 167 00:09:13,200 --> 00:09:16,080 Speaker 1: question of where the center of decision making is. That 168 00:09:16,120 --> 00:09:21,520 Speaker 1: we have large, anonymous bureaucracies that write regulations which then 169 00:09:21,679 --> 00:09:25,480 Speaker 1: change how people function and which limit the ability to 170 00:09:25,520 --> 00:09:29,640 Speaker 1: have entrepreneurial creativity and to go out and try to 171 00:09:29,679 --> 00:09:33,480 Speaker 1: meet your customers in new and decisive ways because you 172 00:09:33,520 --> 00:09:35,400 Speaker 1: have to deal within a framework set by the government. 173 00:09:36,240 --> 00:09:39,280 Speaker 3: Yeah, and so far we've been talking mostly about the first, 174 00:09:39,320 --> 00:09:42,640 Speaker 3: the economic friction portion of it, which I do hope 175 00:09:42,679 --> 00:09:44,800 Speaker 3: we don't lose sight of but the second is really 176 00:09:44,800 --> 00:09:47,679 Speaker 3: important as well, And in fact, I should mention I 177 00:09:47,840 --> 00:09:51,160 Speaker 3: just released another it's a database. So I also have 178 00:09:51,200 --> 00:09:54,880 Speaker 3: an affiliation with the Pacific Legal Foundation, and with them, 179 00:09:54,920 --> 00:09:57,040 Speaker 3: I released a database that tries to get at that 180 00:09:57,160 --> 00:10:01,120 Speaker 3: second point that you just highlighted, which is that oftentimes 181 00:10:01,200 --> 00:10:07,200 Speaker 3: the regulations maybe don't even stem from congressional mandates or 182 00:10:07,360 --> 00:10:12,320 Speaker 3: authorizations written by our elected officials and sometimes the unelected 183 00:10:12,360 --> 00:10:14,640 Speaker 3: bureaucrats as people like to call that, people working in 184 00:10:14,679 --> 00:10:17,040 Speaker 3: the agencies will go off in some direction that may 185 00:10:17,040 --> 00:10:21,440 Speaker 3: not have any relation whatsoever to congressional mandates. So this 186 00:10:21,559 --> 00:10:24,959 Speaker 3: database I've put together for Pacific Legal Foundation uses AI 187 00:10:25,240 --> 00:10:30,800 Speaker 3: to see if regulations have any direct or even vaguely 188 00:10:31,160 --> 00:10:35,760 Speaker 3: related connection to the statutes that they cite as their authorities. 189 00:10:35,800 --> 00:10:38,199 Speaker 3: And it's perhaps not surprising to you, but it was 190 00:10:38,280 --> 00:10:40,920 Speaker 3: surprising to me that there's quite a few regulations that 191 00:10:41,000 --> 00:10:43,360 Speaker 3: don't appear to be related to the statutes that they 192 00:10:43,400 --> 00:10:45,240 Speaker 3: cite as their authorities in the first place. 193 00:10:45,440 --> 00:10:48,040 Speaker 2: So highlighting your second point, there's a problem, there. 194 00:11:03,360 --> 00:11:06,480 Speaker 1: Wasn't that one of the provisions that the Supreme Court 195 00:11:06,520 --> 00:11:10,040 Speaker 1: came down on recently and saying that bureaucracies can't just 196 00:11:10,080 --> 00:11:13,720 Speaker 1: make up rules without any kind of legislative. 197 00:11:13,280 --> 00:11:16,520 Speaker 3: Direction, right, So the demise of Chevron deference is what 198 00:11:16,559 --> 00:11:19,120 Speaker 3: you're talking about, right. This was the Lofer Bright case, 199 00:11:19,600 --> 00:11:22,640 Speaker 3: and so for about forty years since this case in 200 00:11:22,679 --> 00:11:26,360 Speaker 3: the eighties which created Chevron difference, there was a tie 201 00:11:26,360 --> 00:11:29,040 Speaker 3: in the interpretation of a statute between what say, a 202 00:11:29,120 --> 00:11:32,360 Speaker 3: regulator said and a company that's being regulated thought it said. 203 00:11:32,720 --> 00:11:34,760 Speaker 3: The tie would always go to the agency. That is, 204 00:11:34,920 --> 00:11:38,559 Speaker 3: difference was given to the agency's interpretation of the statute, 205 00:11:39,320 --> 00:11:42,080 Speaker 3: and that got thrown out the window with the lower 206 00:11:42,080 --> 00:11:45,679 Speaker 3: Bright ruling. That lower Bright ruling said Chevron defference. This 207 00:11:45,720 --> 00:11:48,719 Speaker 3: is the quote. Chevron defference is dead. So now if 208 00:11:48,760 --> 00:11:51,560 Speaker 3: an agency wants to interpret a statute in some way, 209 00:11:51,760 --> 00:11:53,439 Speaker 3: they have to justify it. They don't just get the 210 00:11:53,480 --> 00:11:56,520 Speaker 3: assumption that they're correct. So this ties back to why 211 00:11:56,559 --> 00:11:59,080 Speaker 3: I made this whole database in the first place. Really 212 00:11:59,080 --> 00:12:03,040 Speaker 3: wanted to understand where are the statutes that are very 213 00:12:03,160 --> 00:12:07,440 Speaker 3: vague and that leave a lot of discretion to the 214 00:12:07,480 --> 00:12:10,480 Speaker 3: agencies to make interpretations that maybe they would have held 215 00:12:10,520 --> 00:12:14,120 Speaker 3: up in Chevron difference days, but maybe these days are 216 00:12:14,280 --> 00:12:16,920 Speaker 3: much more susceptible to challenge, and so we're trying to 217 00:12:16,920 --> 00:12:17,760 Speaker 3: identify those. 218 00:12:18,280 --> 00:12:21,880 Speaker 1: So in a sense, it shrinks the discretionary power of 219 00:12:21,920 --> 00:12:25,160 Speaker 1: the bureaucracy and returns more of the power back to 220 00:12:25,200 --> 00:12:26,160 Speaker 1: the elected officials. 221 00:12:26,920 --> 00:12:29,480 Speaker 3: If the elected officials pick it up and run with this, right, 222 00:12:29,520 --> 00:12:31,440 Speaker 3: that is part of the problem here too. I think 223 00:12:31,760 --> 00:12:34,840 Speaker 3: for many years Congress has not been willing to engage 224 00:12:34,840 --> 00:12:36,680 Speaker 3: in the regulatory battles that they need to. 225 00:12:37,160 --> 00:12:41,000 Speaker 1: I think back in the nineteen thirties where Sam Rayburn, 226 00:12:41,040 --> 00:12:43,680 Speaker 1: who was then share of the Energy and Commerce Committee, 227 00:12:44,559 --> 00:12:49,560 Speaker 1: really had a remarkably detailed understanding of what he was 228 00:12:49,559 --> 00:12:53,240 Speaker 1: trying to accomplish and passed legislation that was much more 229 00:12:53,960 --> 00:12:58,240 Speaker 1: explicit and delegated, much less than the modern congresses. The 230 00:12:58,240 --> 00:13:00,440 Speaker 1: modern Congress has sort of said to do in this 231 00:13:00,520 --> 00:13:03,720 Speaker 1: general direction. Now the bureaucracy can define what that means, 232 00:13:04,320 --> 00:13:05,920 Speaker 1: which just sloppy legislation. 233 00:13:06,520 --> 00:13:07,320 Speaker 2: Yeah, I agree. 234 00:13:07,440 --> 00:13:10,439 Speaker 3: There's a lot of legislation like that, the latter type 235 00:13:10,440 --> 00:13:13,680 Speaker 3: of vague type that just gives a general authorization to 236 00:13:13,760 --> 00:13:15,920 Speaker 3: do work in a big area for an agency, and 237 00:13:15,960 --> 00:13:17,640 Speaker 3: then the agency can take that and run with it 238 00:13:17,679 --> 00:13:21,240 Speaker 3: in a lot of different ways. You know, it's politically expedient, 239 00:13:21,600 --> 00:13:24,840 Speaker 3: I guess, to make that kind of legislation, But I 240 00:13:24,840 --> 00:13:27,160 Speaker 3: think the end result is even if in the short 241 00:13:27,240 --> 00:13:30,520 Speaker 3: run that doesn't lead to some sort of mission creep 242 00:13:30,600 --> 00:13:32,960 Speaker 3: on the agency's parts, in the long run you have 243 00:13:32,960 --> 00:13:34,280 Speaker 3: set that up for mission creep. 244 00:13:34,760 --> 00:13:38,079 Speaker 1: Now you also have the problem that the bureaucracy is 245 00:13:38,160 --> 00:13:42,960 Speaker 1: inherently slow down the process of innovation and of new things. 246 00:13:42,960 --> 00:13:45,840 Speaker 1: And I think one of the examples was the Norfolk 247 00:13:45,880 --> 00:13:50,080 Speaker 1: Southern case. Can you sort of describe just how goofy 248 00:13:50,120 --> 00:13:53,880 Speaker 1: this was. Here's a pro safety innovation which the bureaucracy 249 00:13:53,920 --> 00:13:56,679 Speaker 1: is slowing down. They developed this new technique for a 250 00:13:56,760 --> 00:14:02,000 Speaker 1: visual tracks inspection and dramatic and the bureaucracy says no. 251 00:14:03,559 --> 00:14:08,240 Speaker 3: The justifications elude me entirely for saying no other than 252 00:14:08,440 --> 00:14:12,560 Speaker 3: perhaps there's pressure from existing job holders and the unions 253 00:14:12,600 --> 00:14:17,120 Speaker 3: to keep the existing ways of doing track inspections the 254 00:14:17,160 --> 00:14:20,120 Speaker 3: status quo for the foreseeable future. But yeah, we have 255 00:14:20,200 --> 00:14:23,600 Speaker 3: this new technology, these wonderful machines that will go down tracks. 256 00:14:23,640 --> 00:14:27,720 Speaker 3: They can measure for fault cracks, etc. In the tracks 257 00:14:27,760 --> 00:14:30,920 Speaker 3: better than the human can do. They outperform on all 258 00:14:30,920 --> 00:14:34,760 Speaker 3: sorts of safety metrics and they're cheaper overall, but the 259 00:14:34,960 --> 00:14:38,400 Speaker 3: Federal Railroad Administration wouldn't allow that testing to even continue. 260 00:14:38,800 --> 00:14:40,240 Speaker 3: But I'm not sure where that stands. 261 00:14:40,600 --> 00:14:44,320 Speaker 1: The other example is what Youngkin has done, where he 262 00:14:44,440 --> 00:14:48,960 Speaker 1: really has been very methodically aggressive and brings his CEO 263 00:14:49,080 --> 00:14:51,960 Speaker 1: skills to the governorship. Can you talk a little bit 264 00:14:52,000 --> 00:14:55,280 Speaker 1: about what you think why it's so different with Youngkin 265 00:14:55,400 --> 00:14:57,240 Speaker 1: doing it, and what you think the effect of it is. 266 00:14:57,720 --> 00:14:59,880 Speaker 3: Yeah, I'm glad you brought that up before I go 267 00:15:00,080 --> 00:15:02,640 Speaker 3: too deep on what Virginia has done, which I do 268 00:15:02,680 --> 00:15:05,600 Speaker 3: think is probably close to best in class or maybe 269 00:15:05,600 --> 00:15:09,000 Speaker 3: best in class overall. That should make the point that 270 00:15:09,120 --> 00:15:11,720 Speaker 3: we are going through obviously a lot of change at 271 00:15:11,760 --> 00:15:14,600 Speaker 3: the federal level right now too. President Trump is trying 272 00:15:14,640 --> 00:15:17,840 Speaker 3: to implement a lot of similar changes. We're seeing how 273 00:15:17,840 --> 00:15:19,720 Speaker 3: it shakes out over time, and a lot of the 274 00:15:19,720 --> 00:15:23,360 Speaker 3: results are still to be determined. But we should acknowledge 275 00:15:23,360 --> 00:15:26,320 Speaker 3: that for as much as I said negative about the 276 00:15:26,320 --> 00:15:29,040 Speaker 3: federal lay of the land, there have been some positive 277 00:15:29,080 --> 00:15:33,040 Speaker 3: changes recently. Switching back to Virginia, though, so Governor youngk In. 278 00:15:33,080 --> 00:15:35,440 Speaker 3: One of his first actions when he took office was 279 00:15:35,560 --> 00:15:40,480 Speaker 3: to issue an executive order that mandated agencies reduced their 280 00:15:40,640 --> 00:15:44,840 Speaker 3: regulatory inventory by at least twenty five percent by the 281 00:15:44,920 --> 00:15:47,640 Speaker 3: end of his four year term. And he did this 282 00:15:47,680 --> 00:15:51,160 Speaker 3: by creating an Office of Regulatory Management that was sitting 283 00:15:51,240 --> 00:15:54,840 Speaker 3: inside the Executive Branch there in Virginia, and that office 284 00:15:55,120 --> 00:15:58,800 Speaker 3: was in charge of making sure first all the agencies 285 00:15:58,840 --> 00:16:02,120 Speaker 3: did a comprehensive inventory of their baseline and data. 286 00:16:02,160 --> 00:16:03,440 Speaker 2: Actually already started. 287 00:16:03,080 --> 00:16:05,600 Speaker 3: This a few years earlier under a different law, So 288 00:16:05,840 --> 00:16:07,880 Speaker 3: agencies had to have a starting point. 289 00:16:07,960 --> 00:16:08,960 Speaker 2: This is really key. 290 00:16:09,040 --> 00:16:11,800 Speaker 3: This is one difference between a lot of state approaches 291 00:16:12,320 --> 00:16:12,880 Speaker 3: and what. 292 00:16:12,720 --> 00:16:13,920 Speaker 2: We see at the federal level. 293 00:16:14,200 --> 00:16:16,600 Speaker 3: So have some data for where you are, measure where 294 00:16:16,640 --> 00:16:18,560 Speaker 3: you are as a starting point, and then you can 295 00:16:18,640 --> 00:16:22,400 Speaker 3: see are you achieving your goal in this case twenty 296 00:16:22,400 --> 00:16:26,160 Speaker 3: five percent reduction within four years? Without that baseline, how 297 00:16:26,160 --> 00:16:28,680 Speaker 3: are you going to measure progress? So this Office of 298 00:16:28,760 --> 00:16:33,680 Speaker 3: Regulatory Management established the baseline, worked with the agencies very 299 00:16:33,800 --> 00:16:36,600 Speaker 3: very cordially, I would say, to make sure that they're 300 00:16:36,800 --> 00:16:39,600 Speaker 3: looking in all of their regulations, also in all their 301 00:16:39,640 --> 00:16:44,400 Speaker 3: guidance documents, which also sometimes gets ignored at the federal 302 00:16:44,480 --> 00:16:48,320 Speaker 3: level depending on the administration, looking at things like third 303 00:16:48,360 --> 00:16:52,240 Speaker 3: party standards that are referenced by regulations. An example here 304 00:16:52,360 --> 00:16:58,000 Speaker 3: is the International Building Code is frequently probably in every state, 305 00:16:58,120 --> 00:17:02,080 Speaker 3: referenced as these standards that are used for constructing new buildings. 306 00:17:02,520 --> 00:17:06,719 Speaker 3: It doesn't mean that building code is republished in regulations necessarily. 307 00:17:06,800 --> 00:17:08,920 Speaker 3: It might be, it might not be, but it has 308 00:17:08,960 --> 00:17:11,400 Speaker 3: the force of law. So this is like a third 309 00:17:11,440 --> 00:17:15,720 Speaker 3: party set of standards books if you will, that become regulations. 310 00:17:15,920 --> 00:17:17,960 Speaker 3: So if you want to do a comprehensive inventory, you 311 00:17:18,000 --> 00:17:19,880 Speaker 3: need to look at those need to look at guidance 312 00:17:19,920 --> 00:17:23,240 Speaker 3: documents and the regulations themselves, which is what Virginia did. 313 00:17:23,840 --> 00:17:25,800 Speaker 2: So that's setting the stage. 314 00:17:26,080 --> 00:17:28,920 Speaker 3: The second thing they did was work with all those 315 00:17:28,960 --> 00:17:33,000 Speaker 3: agencies to figure out which regulations they could cut and 316 00:17:33,080 --> 00:17:36,000 Speaker 3: not create some sort of safety or environmental hazard. 317 00:17:36,440 --> 00:17:37,760 Speaker 2: This does require a lot of work. 318 00:17:37,800 --> 00:17:41,160 Speaker 3: This requires subject matter expertise, or requires the regulators themselves 319 00:17:41,240 --> 00:17:44,320 Speaker 3: to be bought in on the concept of streamlining and 320 00:17:44,359 --> 00:17:46,560 Speaker 3: red tape production and look for the stuff where they 321 00:17:46,880 --> 00:17:47,520 Speaker 3: can improve. 322 00:17:47,720 --> 00:17:49,720 Speaker 2: Then give you an example here they. 323 00:17:49,600 --> 00:17:53,560 Speaker 3: Looked at cosmetology licensing and the number of hours that 324 00:17:54,200 --> 00:17:58,120 Speaker 3: a cosmetologists would be cosmetologists has to go through training 325 00:17:58,160 --> 00:18:01,199 Speaker 3: in order to be a licensed cosmetology just the number 326 00:18:01,359 --> 00:18:04,720 Speaker 3: when Virginia started this off, it was either twelve hundred 327 00:18:04,760 --> 00:18:07,040 Speaker 3: or fifteen hundred hours, one of those two. And they 328 00:18:07,520 --> 00:18:10,919 Speaker 3: looked around at other states to say, do other states 329 00:18:10,960 --> 00:18:14,919 Speaker 3: have lower requirements for how much training a cosmetologists has 330 00:18:14,960 --> 00:18:17,800 Speaker 3: to go through? And they found that the mean state 331 00:18:17,840 --> 00:18:20,720 Speaker 3: has about one thousand hours. Some states have even less 332 00:18:20,760 --> 00:18:24,639 Speaker 3: for requirements. And then they said, do we see different outcomes? 333 00:18:24,800 --> 00:18:27,959 Speaker 3: Are they less safe because they have fewer hours required 334 00:18:28,000 --> 00:18:30,880 Speaker 3: in training? And they didn't see different outcomes, So they 335 00:18:30,920 --> 00:18:33,720 Speaker 3: lowered the number of hours required and that made a 336 00:18:33,720 --> 00:18:35,359 Speaker 3: big difference for all the people that were going to 337 00:18:35,359 --> 00:18:39,000 Speaker 3: go become cosmetologists in Virginia thereafter. So they worked on 338 00:18:39,040 --> 00:18:42,440 Speaker 3: that sort of thing, agency by agency to identify where 339 00:18:42,480 --> 00:18:45,320 Speaker 3: they can streamline, where they can cut back. And then 340 00:18:45,359 --> 00:18:48,680 Speaker 3: the third thing they did was make sure that there's 341 00:18:48,680 --> 00:18:54,080 Speaker 3: an economic analysis done for every single regulation, the ones 342 00:18:54,119 --> 00:18:55,960 Speaker 3: that they were going to get rid of, the ones 343 00:18:56,000 --> 00:18:56,879 Speaker 3: that they were going to put. 344 00:18:56,760 --> 00:18:57,440 Speaker 2: Onto the books. 345 00:18:58,119 --> 00:19:02,240 Speaker 3: All of this required for what's the cost, what's the benefit, 346 00:19:02,359 --> 00:19:05,199 Speaker 3: so you can make better decisions on what changes you 347 00:19:05,240 --> 00:19:07,640 Speaker 3: wanted to make. And this I think is really worth 348 00:19:07,720 --> 00:19:12,640 Speaker 3: highlighting because that doesn't exist pretty much anywhere else. At 349 00:19:12,680 --> 00:19:15,639 Speaker 3: the federal level, you do have cost benefit analysis applied 350 00:19:15,680 --> 00:19:19,520 Speaker 3: within regulatory impact analyses, but it's only applied to typically 351 00:19:19,640 --> 00:19:22,240 Speaker 3: less than three percent of all new rulemakings. The other 352 00:19:22,320 --> 00:19:24,919 Speaker 3: ninety seven percent we just fly in the dark. So 353 00:19:25,000 --> 00:19:28,520 Speaker 3: that was a big innovation. All of this worked together, 354 00:19:29,320 --> 00:19:31,480 Speaker 3: as you may have mentioned, to lead to not only 355 00:19:31,520 --> 00:19:34,119 Speaker 3: a twenty five percent reduction, but thirty three percent reduction 356 00:19:34,200 --> 00:19:36,760 Speaker 3: is where they're sitting at right now for Virginia, or 357 00:19:36,800 --> 00:19:38,840 Speaker 3: projected to be by the end of this year, and 358 00:19:39,400 --> 00:19:42,600 Speaker 3: the economic benefits are already being reaped I think by 359 00:19:42,600 --> 00:19:45,119 Speaker 3: the residents of Virginia. The biggest one was in housing. 360 00:19:45,200 --> 00:19:46,920 Speaker 3: They were able to get rid of some of the 361 00:19:47,040 --> 00:19:51,000 Speaker 3: regulations that were in the International Building Code. They decided 362 00:19:51,000 --> 00:19:53,760 Speaker 3: we don't actually need these things that they're effectively gold plating. 363 00:19:53,920 --> 00:19:57,119 Speaker 3: An example there is there have been a requirement for 364 00:19:57,200 --> 00:20:00,560 Speaker 3: bird safe windows on new construction, which a nice thing 365 00:20:00,600 --> 00:20:04,080 Speaker 3: to have perhaps, but it doesn't necessarily improve human safety. 366 00:20:04,520 --> 00:20:07,120 Speaker 3: And so that's the kind of thing that you could 367 00:20:07,200 --> 00:20:09,440 Speaker 3: cut away and that be an option for those who 368 00:20:09,440 --> 00:20:12,000 Speaker 3: can afford it, but not a requirement for those who 369 00:20:12,040 --> 00:20:13,439 Speaker 3: want to have more affordable housing. 370 00:20:13,520 --> 00:20:14,920 Speaker 2: And that led to a lot of savings. 371 00:20:29,720 --> 00:20:32,800 Speaker 1: This whole process of figuring out what are you trying 372 00:20:32,800 --> 00:20:37,320 Speaker 1: to accomplish and how do you measure the outcome, rather 373 00:20:37,359 --> 00:20:41,320 Speaker 1: than the process whose most bureaucracies actually can't tell you 374 00:20:41,320 --> 00:20:45,720 Speaker 1: what the outcome is. Jason Saal, who's his universitys Chicago 375 00:20:45,800 --> 00:20:50,440 Speaker 1: professor who's developed, starting with private philanthropy, a system of saying, 376 00:20:50,480 --> 00:20:53,160 Speaker 1: tell me what you're trying to accomplish, Now, let me 377 00:20:53,160 --> 00:20:57,400 Speaker 1: measure what does it cost per achievement, And he said 378 00:20:57,440 --> 00:21:01,600 Speaker 1: the scale is unbelievable. For example, in the private sector 379 00:21:02,080 --> 00:21:05,040 Speaker 1: is about five times less expensive than the federal government 380 00:21:06,040 --> 00:21:08,800 Speaker 1: to achieve the same level of achievement. Seens me a 381 00:21:08,800 --> 00:21:11,200 Speaker 1: lot of what you're doing and he's doing actually kind 382 00:21:11,200 --> 00:21:14,320 Speaker 1: of fit what I think is an emerging sense that 383 00:21:14,400 --> 00:21:16,280 Speaker 1: we need to go back and learn how to manage 384 00:21:16,320 --> 00:21:19,639 Speaker 1: the regulatory process in a way that we really haven't 385 00:21:20,160 --> 00:21:22,440 Speaker 1: and also managed the investments were making in terms of 386 00:21:22,440 --> 00:21:25,679 Speaker 1: the federal government. Now, when you look at Junkin and 387 00:21:25,760 --> 00:21:29,359 Speaker 1: Virginia from what you see around the country, has even 388 00:21:29,440 --> 00:21:32,600 Speaker 1: unusually successful or is he part of a wave of success? 389 00:21:33,600 --> 00:21:36,560 Speaker 3: Definitely part of a wave, maybe towards the top end 390 00:21:36,640 --> 00:21:39,720 Speaker 3: of the innovations that have been used in that wave. 391 00:21:40,240 --> 00:21:44,080 Speaker 3: But we've seen other states cut similar amounts of regulation. 392 00:21:44,680 --> 00:21:49,040 Speaker 3: Idaho has cut over fifty percent since twenty eighteen. Ohio 393 00:21:49,119 --> 00:21:51,439 Speaker 3: has cut about twenty percent in the last few years. 394 00:21:51,480 --> 00:21:53,840 Speaker 3: And most of these states have made these changes by 395 00:21:53,880 --> 00:21:57,160 Speaker 3: executive order from the governor. Ohio was different. They did 396 00:21:57,200 --> 00:22:00,800 Speaker 3: it via legislation, So that's worth highlighting briefly. At least 397 00:22:01,240 --> 00:22:04,439 Speaker 3: Nebraska has made some cuts, Oklahoma has made some cuts. 398 00:22:04,920 --> 00:22:07,520 Speaker 3: Texas is starting down this road. They just created their 399 00:22:07,560 --> 00:22:12,639 Speaker 3: own agency to manage regulatory management better regulatory reduction, I 400 00:22:12,640 --> 00:22:14,800 Speaker 3: should say better. We'll see where that goes, but I 401 00:22:14,800 --> 00:22:16,680 Speaker 3: have high hopes for what Texas can do. So it's 402 00:22:16,720 --> 00:22:19,480 Speaker 3: a bit of a wave to address your question very directly. 403 00:22:19,920 --> 00:22:23,320 Speaker 3: But I do think what Virginia did is setting some 404 00:22:23,440 --> 00:22:26,280 Speaker 3: nice new examples to One thing that's worth highlighting for 405 00:22:26,359 --> 00:22:27,400 Speaker 3: Virginia also is. 406 00:22:27,320 --> 00:22:29,440 Speaker 2: Their usage of AI and I think this. 407 00:22:29,600 --> 00:22:33,960 Speaker 3: Is something that the federal reformers as well as state 408 00:22:34,080 --> 00:22:36,520 Speaker 3: level reformers are probably paying attention to. 409 00:22:37,080 --> 00:22:39,520 Speaker 2: This goes back to the problem I was highlighting earlier. 410 00:22:39,560 --> 00:22:43,640 Speaker 3: There's these economic analysis, for example, required for every single regulation. 411 00:22:43,760 --> 00:22:45,280 Speaker 2: Well, that's an expensive process. 412 00:22:45,840 --> 00:22:50,399 Speaker 3: And most states don't necessarily want to create new positions 413 00:22:50,440 --> 00:22:55,280 Speaker 3: within the agencies to perform these analyzes. The governor of Virginia, 414 00:22:55,320 --> 00:22:59,280 Speaker 3: Governor Younkin, put together a pilot program that has this 415 00:22:59,359 --> 00:23:04,720 Speaker 3: company called Vulcan Technologies, doing automated cost benefit analysis for 416 00:23:04,800 --> 00:23:06,200 Speaker 3: these regulations with AI. 417 00:23:06,440 --> 00:23:08,720 Speaker 2: They're doing some other things too. They're using AI to. 418 00:23:08,720 --> 00:23:13,360 Speaker 3: Identify where a regulation goes farther than what the statutory 419 00:23:13,480 --> 00:23:16,640 Speaker 3: requirement says. One of the problems they often ran into 420 00:23:16,680 --> 00:23:20,080 Speaker 3: in Virginia was an agency would say, well, we can't 421 00:23:20,080 --> 00:23:23,679 Speaker 3: cut regulations because there are statues that say we have 422 00:23:23,760 --> 00:23:25,760 Speaker 3: to have these regulations on the books, so there's no 423 00:23:25,880 --> 00:23:29,960 Speaker 3: room to deregulate. We're legally required. Well, this company made 424 00:23:30,000 --> 00:23:32,200 Speaker 3: an AI tool that goes back and says are you 425 00:23:32,280 --> 00:23:35,000 Speaker 3: really required or is it an option? And they can 426 00:23:35,040 --> 00:23:39,399 Speaker 3: identify where regulations are optional versus mandated and gave the 427 00:23:39,520 --> 00:23:41,160 Speaker 3: agency some room to work with there. 428 00:23:42,040 --> 00:23:44,800 Speaker 1: Now, when you see all this deregulation across the country, 429 00:23:45,400 --> 00:23:48,199 Speaker 1: have there been occasions when in fact they're on a 430 00:23:48,240 --> 00:23:51,480 Speaker 1: stage too far and there have been negative side effects 431 00:23:51,680 --> 00:23:53,840 Speaker 1: turned out that the regulation was actually needed. 432 00:23:54,440 --> 00:23:57,359 Speaker 3: We haven't seen that yet in this wave of red 433 00:23:57,400 --> 00:24:00,000 Speaker 3: tape reduction that's really been happening in the last decade, 434 00:24:00,359 --> 00:24:03,840 Speaker 3: so I think that's deliberate. Going back to Idaho, the 435 00:24:03,880 --> 00:24:06,879 Speaker 3: governor there was very careful to make sure he ordered 436 00:24:06,880 --> 00:24:11,440 Speaker 3: the agencies to cut regulations only when it wouldn't reduce health, safety, 437 00:24:11,520 --> 00:24:16,240 Speaker 3: or environmental outcomes. And even going back farther, the province 438 00:24:16,240 --> 00:24:19,200 Speaker 3: of British Columbia in Canada back in two thousand and 439 00:24:19,200 --> 00:24:22,320 Speaker 3: one to two thousand and four really was the pioneer 440 00:24:22,359 --> 00:24:25,600 Speaker 3: in this space. A newly elected government decided it needed 441 00:24:25,600 --> 00:24:28,600 Speaker 3: to cut regulations. They had promised in their campaign to 442 00:24:28,600 --> 00:24:31,479 Speaker 3: cut regulations by a third, and so when they got 443 00:24:31,520 --> 00:24:34,000 Speaker 3: into office, they implemented that promise and they ended up 444 00:24:34,000 --> 00:24:37,080 Speaker 3: cutting actually nearly forty percent over a three year period. 445 00:24:37,680 --> 00:24:40,399 Speaker 3: We didn't see any sort of negative environmental outcomes or 446 00:24:40,440 --> 00:24:42,919 Speaker 3: safety outcomes there either. We've been able to study this 447 00:24:43,080 --> 00:24:46,000 Speaker 3: now at length, but what we did see, by the way, 448 00:24:46,200 --> 00:24:49,920 Speaker 3: is very positive economic outcomes. The growth rate in BC 449 00:24:50,080 --> 00:24:54,240 Speaker 3: and British Columbia there increased because of the regulatory reduction 450 00:24:54,720 --> 00:24:56,600 Speaker 3: by just over one percentage point. 451 00:24:56,720 --> 00:24:58,800 Speaker 2: Consistent with the point I made earlier. 452 00:24:58,960 --> 00:25:03,520 Speaker 1: In your judgment. Administration could deregulate between one third and 453 00:25:03,640 --> 00:25:06,800 Speaker 1: forty percent. What would the impact on the American economy be. 454 00:25:07,280 --> 00:25:08,080 Speaker 2: On growth rate? 455 00:25:08,200 --> 00:25:10,120 Speaker 3: If we will cut that much, I think we'd see 456 00:25:10,119 --> 00:25:13,080 Speaker 3: about one percentage point added to the growth rate, So 457 00:25:13,200 --> 00:25:15,920 Speaker 3: instead of say three percent per year, we maybe get 458 00:25:15,960 --> 00:25:18,840 Speaker 3: closer to four percent per year. And then I think 459 00:25:18,880 --> 00:25:21,000 Speaker 3: we should take that step further and think about the 460 00:25:21,320 --> 00:25:25,399 Speaker 3: budgetary implications of that. If we were to deregulate have 461 00:25:25,600 --> 00:25:29,120 Speaker 3: greater growth, you'll have greater tax revenue to work with 462 00:25:29,160 --> 00:25:30,960 Speaker 3: in the budget, and you can do a lot more 463 00:25:30,960 --> 00:25:31,639 Speaker 3: of that space. 464 00:25:32,040 --> 00:25:34,639 Speaker 1: People don't realize that one percent a year when it 465 00:25:34,680 --> 00:25:37,200 Speaker 1: applied to a system the size of the US economy 466 00:25:37,840 --> 00:25:40,680 Speaker 1: is a lot of money, and its compounding effect over 467 00:25:40,720 --> 00:25:43,160 Speaker 1: ten or twenty years is kind of astonishing. 468 00:25:44,000 --> 00:25:48,120 Speaker 3: Right and right now, the budget process in DC largely 469 00:25:48,160 --> 00:25:53,560 Speaker 3: ignores both the drag that accumulated regulations are creating right now, 470 00:25:53,720 --> 00:25:58,120 Speaker 3: as well as the potential gains to growth of regulatory reform. 471 00:25:58,680 --> 00:26:00,520 Speaker 2: I'd love to see that change somehow. 472 00:26:00,520 --> 00:26:02,200 Speaker 3: Over the years that I've been working in this area, 473 00:26:02,200 --> 00:26:05,440 Speaker 3: I've seen several bills in Congress come but not necessarily 474 00:26:05,480 --> 00:26:07,800 Speaker 3: get passed, but that would propose some sort of regulatory 475 00:26:07,840 --> 00:26:11,760 Speaker 3: budget other sorts of regulatory reforms. But when it comes 476 00:26:11,760 --> 00:26:15,199 Speaker 3: to time to score, that doesn't seem to be getting 477 00:26:15,359 --> 00:26:17,160 Speaker 3: scored really because it's not fiscal. 478 00:26:17,800 --> 00:26:21,119 Speaker 1: When they changed the Office of the Budget the Office 479 00:26:21,119 --> 00:26:23,560 Speaker 1: of Management and Budget, they were trying to get at 480 00:26:23,640 --> 00:26:26,280 Speaker 1: this very point, and I don't think that the Congressional 481 00:26:26,320 --> 00:26:30,359 Speaker 1: Budget Office has had a parallel evolution. And that's probably 482 00:26:30,359 --> 00:26:32,800 Speaker 1: something the two budget committees ought to look at, is 483 00:26:32,800 --> 00:26:35,919 Speaker 1: how do we find a way to quantify the economic 484 00:26:36,000 --> 00:26:40,720 Speaker 1: long term advantages of a leaner, less bureaucratic, and less regulatory, 485 00:26:40,760 --> 00:26:43,760 Speaker 1: overburdened kind of system. I think that's a very very 486 00:26:43,840 --> 00:26:46,760 Speaker 1: useful point, Patrick, I want to thank you for joining me. 487 00:26:47,200 --> 00:26:49,080 Speaker 1: I want to let our listeners know they can find 488 00:26:49,080 --> 00:26:50,680 Speaker 1: out more about the work you are doing at the 489 00:26:50,720 --> 00:26:54,600 Speaker 1: Hoover Institution by going to Hoover dot org. They can 490 00:26:54,640 --> 00:26:58,399 Speaker 1: also subscribe to your blog, Third Order about the Economics 491 00:26:58,400 --> 00:27:03,240 Speaker 1: of Regulation and Deregulation Substack by going to third Order 492 00:27:03,280 --> 00:27:07,120 Speaker 1: dot substack dot com. This has been a really positive 493 00:27:07,160 --> 00:27:08,600 Speaker 1: and brillian, encouraging conversation. 494 00:27:09,680 --> 00:27:12,240 Speaker 3: I appreciate the opportunity to be on this did my 495 00:27:12,280 --> 00:27:13,159 Speaker 3: pleasure to chat with you. 496 00:27:16,359 --> 00:27:19,200 Speaker 1: Thank you to my guests Patrick McLachlin. You can get 497 00:27:19,200 --> 00:27:21,880 Speaker 1: a link to his work at the Hoover Institution on 498 00:27:21,920 --> 00:27:25,639 Speaker 1: our show page at newtsworld dot com. Newtsworld is produced 499 00:27:25,680 --> 00:27:29,399 Speaker 1: by Ginglish three sixty and iHeartMedia. Our executive producer is 500 00:27:29,480 --> 00:27:33,960 Speaker 1: Guernsey Sloan. Our researcher is Rachel Peterson. The artwork for 501 00:27:34,040 --> 00:27:37,600 Speaker 1: the show was created by Steve Penley. Special thanks to 502 00:27:37,600 --> 00:27:40,720 Speaker 1: the team at Ginglish three sixty. If you've been enjoying Nutsworld, 503 00:27:41,080 --> 00:27:43,560 Speaker 1: I hope you'll go to Apple Podcasts and both rate 504 00:27:43,640 --> 00:27:46,359 Speaker 1: us with five stars and give us a review so 505 00:27:46,440 --> 00:27:49,560 Speaker 1: others can learn what it's all about. Right now, listeners 506 00:27:49,560 --> 00:27:52,760 Speaker 1: to Newtsworld can sign up for my three free weekly 507 00:27:52,840 --> 00:27:57,240 Speaker 1: columns at gingishtree sixty dot com slash newsletter. I'm Newt Gingrich. 508 00:27:57,600 --> 00:28:02,879 Speaker 1: This is Newtsworld.