The Brussels Effect
It sounds like a 1970s movie about sleeper spies. But the plot here is more insidious and more dangerous.
E.U. Regulations Made the CrowdStrike Fiasco Much Worse
The road to hell is well-intentioned. CrowdStrike software runs at the heart of Windows software. When something goes wrong in the kernel, it’s a bad day at the OK Corral. Why does it have access to the kernel? Intuitively, isn’t that something problematic? Doesn’t it make the world riskier? Well, we can thank the well-intentioned regulators in Europe worried about competition issues.
Neither Apple nor Google face such interoperability requirements.
The EU thinks this is a personal problem for Microsoft to figure out on its own.
‘"A Microsoft spokesman said it cannot legally wall off its operating system in the same way Apple does because of an understanding it reached with the European Commission following a complaint. In 2009, Microsoft agreed it would give makers of security software the same level of access to Windows that Microsoft gets."’
There’s this, too: a description of the Brussels Effect.
‘An agreement with the European Union affected the entire world because of something called "the Brussels Effect." It's a result of a large jurisdiction with economic clout and a tendency to meddle imposing rules that become defaults for everybody because it's just easier to abide by the most restrictive standard than to craft different products and services for less-regulated markets.’
US regulators exploit this arbitrage to extend their own power.
‘Worse, notes Huddleston, "some American regulators like the Federal Trade Commission are actively working with EU bureaucrats to regulate US companies." If the Federal Trade Commission doesn't have the authority to impose certain rules on American businesses, it will ask its E.U. counterparts to do so. Then the regulations will flow back to the U.S. courtesy of the Brussels Effect.’
Stop making me hit you.
Brussels slaps down Thierry Breton over ‘harmful content’ letter to Elon Musk
Bureaucrats gone wild in the EU. The internal market commissioner threatened Elon Musk if he followed through with an interview of a former US president and current US presidential candidate from one of the two leading parties.
‘Thierry Breton, the French commissioner, had posted the warning letter on X, the platform owned by Musk, hours before the billionaire interviewed US presidential candidate Donald Trump, also on X.
‘On Tuesday the European Commission denied Breton had approval from its president Ursula von der Leyen to send the letter.’
Jim Ratcliffe warns EU bureaucracy will drive away industry’s investments
At this rate, the EU is just going to be museums and restaurants.
‘Europe’s falling business competitiveness relative to the US, China and other rivals has become a critical issue for the continent’s biggest industries, prompting major political debate inside the EU on how to protect its single market while also maintaining world-leading environmental transition targets.’
Delays hit 40% of Biden’s major IRA manufacturing projects
Bureaucracy delays implementation. This is made worse by policy uncertainty. A turnover in administration could cause a legislative reversal. Bureaucracy here may turn out to have been self-defeating.
‘‘“Of course, we want to see these projects get up and moving as fast as possible. We continue to work to clear barriers related to permitting, to financing, where they exist,” Jacquez said.’
European Tech Regulator Threatens to Punish Elon Musk, X for Airing Trump Interview
Is the way to kill constitutionally-protected rights through the backdoor of our relationship with the EU?
‘“As the individual entity ultimately controlling a platform with over 300 million users worldwide, of which one third [are] in the EU, that has been designated as a Very Large Online Platform, you have the legal obligation to ensure X’s compliance with EU law and in particular the DSA in the EU,” Breton wrote in a letter to Musk shared on X Monday.’
See my earlier comments regarding the self-defeating nature of bureaucracy.
‘Kamala Harris and Jon Tester spent $42B for rural broadband - but 3 years later not a single home has been connected. They spent $8B for EV charging stations - and have only constructed 7. They spent $5B for electric school buses - and they’ve only made 60 ($830M per bus)’
How Javier Milei Is Turning Argentina’s Economy Around
If government spending stimulates the economy, then, surely, more government spending is better. Right? And reductions in government spending should cause contraction, by this logic. Yet, Milei’s cuts are generating economic growth because he is removing myriad distortions that lead to a misallocation of resources from their most socially productive use. Much of this comes from reducing bureaucracy.
‘Caporale and Poitras are talking about an elementary economic concept: opportunity costs. These costs refer to what one foregoes or gives up to purchase a good or service, an idea the economist Frédéric Bastiat explored in his famous “broken window” parable. Economist Jonathan Newman offers a tidy summary of the story, which appeared in Bastiat’s 1850 essay That Which Is Seen, and That Which Is Not Seen.’
Rare U.S.-China Cooperation Pays Off on Fentanyl Regulation
China could have done this at any point in time. Why now? It’s not because of some overarching sense of noblesse oblige. China is doing it because it’s in its interests to appear to be trying to heal the relationship between the two countries.
‘The White House announced on Tuesday that China will more tightly regulate three ingredients used to make the deadly drug. U.S. officials had been pushing China to step up oversight of these chemicals since the United Nations Commission on Narcotic Drugs added them to its list of controlled substances in 2022.’
Gov. Little cuts more red tape, celebrates historic milestone in regulation reform
Idaho’s zero-based regulation makes the state the least-regulated in the US. Nice.
‘Idaho became the least regulated state in the nation in December 2019 and has proudly maintained the title. In 2020, Governor Little signed Executive Order 2020-01: Zero-Based Regulation, creating a rigorous process requiring agencies to review and justify the retention of each regulation line-by-line.
‘The initiative was so successful that in 2023, the Legislature made Governor Little’s “Zero-Based Regulation” permanent, mandating that agencies review their rule chapters every eight years. Moving forward, the Governor will continue working with his legislative partners to further reduce government regulation and improve government efficiency.’
According To New Study, This State Has The Most Regulation
California, on the other hand, is the most regulated state. Imagine what kind of growth California could have if it let itself.
‘The RegData project uses text analysis to count and categorize the number of regulatory restrictions—words like “must”, “shall”, and “prohibited”—in each state’s register of regulations. This year’s data are from 2023, the most recent year available. California has the most restrictions, followed by New York and New Jersey. At the other end of the spectrum, Idaho and South Dakota have the fewest restrictions, as shown in the table below.’
Public vs. Private Perceptions of Regulatory Impact
Go figure. Employees of government agencies are pro-regulation.
‘Employees of government agencies tend to believe that regulation has a particularly positive impact on the economy and overall job growth. Business influencers, conversely, believe that regulation has an overall net negative impact on their businesses.
‘The dichotomy of views between federal employees and the business community stems, in part, from the differences in perspective between the two bodies: When it comes to the perception of regulation, the government takes a forest perspective, looking at how regulation impacts the broader economy; whereas those middle market business influencers are staring at the trees, in this case, their particular business.’
White House launches broad new regulatory effort, as Harris prepares to unveil economic plan
Is this really a problem? Maybe it is. I don’t know. But it sure sounds good.
Why didn’t they do this before?
‘The Biden administration on Monday unveiled a new, multi-agency regulatory initiative to target corporate practices that officials claim are designed to waste consumers’ time and needlessly burden them with red tape, in order to maximize profits.
‘“I think we can all relate to this,” Neera Tanden, White House domestic policy advisor, told reporters Friday.
‘“For example, you want to cancel your gym membership or subscription service or newspaper. It took one or two clicks to sign up. But now ... you have to go in person, or wait on hold for 20 minutes ... just to opt out,” she said.’
There is some partisan orientation to these views of government agencies, but it’s interesting that the ones with the most positive sentiment are ones that a) deliver palpable services to the public, and b) aren’t intrusive in doing so.
‘On balance, Americans view 13 of 16 federal agencies we asked about more favorably than unfavorably, according to our survey of 9,424 adults conducted July 1-7. Of those 13 agencies, 10 have net favorable ratings of 15 percentage points or more.
‘Topping the list are the National Park Service (76% favorable), the U.S. Postal Service (72%) and NASA (67%).’