The Faux Scholarship Foundation of the Regulatory Rollback Movement

Abstract

With the full participation and consent of Congress, President Trump has embarked upon a radical project to freeze and roll back federal regulations that protect public health, safety, the environment, and the economy. The principal justification for this project, publicly announced by both Congress and President Trump, is the claim that regulations are costing the American economy $2 trillion per year, thereby destroying jobs. This claim derives from two studies that have received wide and credulous circulation in the media, on Capitol Hill, and in the White House.

This Article accordingly undertakes a comprehensive evaluation of these two studies. It will show that their methods are deeply flawed and their results far too weakly grounded to serve as the basis for a major policy shift. It also will examine the techniques used in these studies to give un-grounded numbers the veneer of credibility. The goal of this exercise is to equip the lay reader with insights needed to spot similar deceptions in the future.

The studies examined in this Article do not establish that regulations are costing jobs overall, or reducing the U.S. Gross Domestic Product by any amount close to $2 trillion per year. They do, however, highlight the impact of an archipelago of anti-regulatory advocacy groups and policy centers that regularly sponsor and issue studies that overstate the cost of regulation using methods that seem plausible on a quick read but that do not withstand close scrutiny. For better or worse, such studies—and the centers that issue them—form a part of our national discourse. Policy makers, judges, scholars, and journalists should be aware, and wary, of them.

Meanwhile, the fact that the House of Representatives explicitly relied on bogus studies to justify a radical set of de-regulatory proposals is itself a reason for alarm: it demonstrates that Congress lacks any reliable mechanism for data quality assurance or truth-check in its legislative process. Given the complexity of most issues and Congress’ vast power to legislate for good or ill, this is a serious institutional deficiency.

Keywords: Regulation; regulatory reform; regulatory cost; cost-benefit analysis; administrative law

JEL Classification: K20, K23, K32, C20, C23, C52