Baked
News from the front lines.
More fodder to help us understand and predict the way bureaucracies behave.
Why is this a regulatory decision and not a legislative one? Is it because of fears that federal legalization of marijuana wouldn’t pass?
“Cannabis is currently a schedule I drug on the Controlled Substances Act — the most severe classification, which means it is believed to have no medical uses and a high propensity for abuse. Heroin is in the same category.
“The DOJ decision would move cannabis to schedule III, which means it’s determined to have some medical benefits, as well as some potential for abuse. Once posted in the federal registry, the proposed rule to reclassify will undergo a public comment period before taking effect.”
The Education Version of the Healthcare.gov Debacle
There are limits to what the federal government can do. Focused excellent execution on a smaller set of priorities would be better than tragic disappointment on a wide array of things.
“One of the reasons I want a smaller federal government is because I want a more focused federal government. A federal government that attempts to be all things to all people is one that is destined to trip over its own shoelaces, over and over again. When everything is a priority, nothing is a priority. Federal agencies should not be taking on sweeping new responsibilities and making grandiose promises when they can’t properly handle their existing duties.”
Speeding things up sounds good. But will it be fair?
“In addition to implementing the Fiscal Responsibility Act, the rule provides agencies with other new and faster tools to improve the efficiency and effectiveness of environmental reviews. For example, it creates new ways for federal agencies to establish categorical exclusions, the fastest form of environmental review. The rule will also help accelerate reviews for projects that agencies can evaluate on a broad, programmatic scale, or that incorporate measures to mitigate adverse effects. These updates will help industry by speeding up environmental reviews and providing more certainty when they are designing projects.”
Time will tell how well this works.
“To deploy these investments, the Biden-Harris Administration has taken aggressive action to accelerate project permitting and environmental reviews. The Administration has developed and is currently executing a Permitting Action Plan; secured $1 billion from the Inflation Reduction Act to improve permitting; passed important reforms in the 2023 Fiscal Responsibility Act that made commonsense changes to the environmental review process, including setting deadlines for completion of reviews and making documents more readable by limiting their length; and took a number of administrative actions to simplify and accelerate the permitting process. By taking these actions, the Administration is ensuring that industry can move forward with key investments and projects, including building out clean energy and transmission, while also being responsible stewards of the environment and protecting communities.”
Governments need to sound flexible and willing to listen to industry.
“To attract foreign investors, the Latvian government is ready to overhaul various bureaucratic and administrative obstacles and cooperate with the private sector, Prime Minister Evika Silina (New Unity) told the press on Monday after signing a memorandum on good corporate governance.
“Commenting the essence of the memorandum and further steps, the prime minister said that this is not a plan but rather an agreement on principles, what the government and the private sector want to do together.”
Mark Mobius: Breaking Bureaucratic Barriers- India's Path To Manufacturing Success
Not to be outdone, India is also trying to tear down bureaucratic obstacles to business.
“Renowned investor Mark Mobius emphasizes India's manufacturing prowess but bureaucratic hurdles hindering its potential. He asserts that India, under Prime Minister Narendra Modi's leadership, must address bureaucracy to excel. Mobius notes the trend of manufacturers shifting from China to India due to favourable conditions. He envisions India emerging as a manufacturing hub, especially in electronics and hardware. Mobius predicts India's rise as a major semiconductor player, highlighting its immense potential. He believes that by overcoming bureaucracy, India can unlock its vast manufacturing capabilities and position itself as a global manufacturing powerhouse.”
Biden administration faces onslaught of lawsuits as business groups claim regulatory overreach
The conflict over bureaucratic rules is heating up. It is a Cold War no more.
“The Chamber of Commerce said it expects to file a total of at least 22 lawsuits against the administration before the end of President Joe Biden's current term, a dramatic increase from the number of suits it filed against two previous administrations.“
Biden’s Plan for Unaffordable Housing
There is a certain kind of thinking that holds everything else fixed. If I implement policy A, then I can have the impact I want and nothing else, anywhere else, will change. With a more systemic approach, one tries to understand the collateral consequences of their actions.
Here, we have competing dynamics from within the same agency.
Let’s improve housing affordability. Let’s implement more climate change policy. Pick a lane, Denise.
“HUD last Thursday announced that it will require new homes financed or insured by its subsidy programs to follow the 2021 International Energy Conservation Code standard. The nonprofit International Code Council sets what are supposed to be model energy building standards every few years, which states and municipalities can adopt.
“Many governments have declined to adopt the 2021 standards because of their higher costs. The National Association of Home Builders says the energy rules can add as much as $31,000 to the price of a new home. It can take up to 90 years for a buyer to realize a payback on the higher up-front costs through lower energy bills.”
Auditors Balk at Regulator’s Push to Expand Their Role
The only audit firms we’ll be left with when this is all said and done are … surprise, the big ones.
Instead of making audit firms chase down frauds, the government or the public companies themselves may want to hire dedicated fraud detection firms to perform a fraud audit, separate from an accounting audit.
“The Public Company Accounting Oversight Board says change is necessary. The regulator wants firms to take on a greater role in detecting fraud, as well as begin disclosing nearly a dozen new metrics about their operations and audits. Yet another proposal calls for more details on audit fees and cybersecurity risks, plus a confidential submission of financial statements.
“In general, auditors support the board’s fervor under Chair Erica Williams in trying to modernize auditing standards. But three recent proposals—sometimes described by auditors as a pile-on—would load firms with added work and costs, particularly as they struggle to find and keep skilled personnel.”
Biden administration faces onslaught of lawsuits as business groups claim regulatory overreach
When you’re boiling a frog, the whole idea is not to turn the heat up too quickly or they will jump out of the pot.
“The Chamber of Commerce said it expects to file a total of at least 22 lawsuits against the administration before the end of President Joe Biden’s current term, a dramatic increase from the number of suits it filed against two previous administrations.”
No One Can Make Government Work
Is it even possible to change the incentives in a bureaucracy to make it more responsive to its ultimate clients?
“But not for long. Because the bureaucracy's incentives kill initiative.
“If a government worker works hard, he might get a small raise. But he sits near others who earn the same pay and, thanks to archaic civil service rules, are unlikely to get fired even if they're late, lazy, or stupid.”