The “Baseline” Problem

Or… Context Is Everything

As Trump (via executive order) and Congress (via the Congressional Review Act) take tiny nibbles out of the vast Gordian knot that is our regulatory state, the usual suspects do what they usually do: caterwaul, bewail and gnash teeth over the damage that deregulation will inevitably cause to America and the world. Such a response is ludicrous, infuriating and the reason we can’t have nice things.

It’s also inevitable, because of what I’ll call the “baseline” problem.

Whenever a change to anything is discussed or proposed, some folks only compare it to the current state of things, even if that state is of very recent vintage, and with no regard to whether that state is good. When it comes to politics, and specifically the realms of laws, spending, and regulations, many often limit their perspective to the state of things today. Thus, if a program has a one billion dollar budget today, that budget was bumped by 25% last year, and that budget is scheduled to increase by 10% next year, a proposal to change the next increase to 5% is seen as a “cutback” and a proposal to restore the program to last year’s level is a “draconian cut.”

And, when partisans complain about deregulation, they conveniently fail to discuss whether those regulations were excessive, ineffective, harmful, or enacted 3 months ago and thus not worthy of actually being considered the “baseline.” Nor do they discuss whether regulations achieved their original purpose, or even what that purpose was.

One story that has some tech-savvy and some liberty-loving people in a major lather is Congress’s reversal of an FCC-created Internet privacy rule. Drill down, however, and you’ll find that the rescinded rule had not even gone into effect, and that the reversal isn’t what the caterwaulers are claiming. In other words, much ado about nothing. But, since there was a Regulation, the Regulation was presumed by many to be Good, and taking it away is therefore by default Bad.

It’s a childish way to think, but it’s the unfortunate reality.

Consider another example: the downgrading of manatees on the endangered species list. The list (and all that goes with it) has a purpose – to protect certain species against extinction. The manatee population has grown 500%, prompting the powers that be to reclassify it as “threatened” rather than “endangered.” Predictably, some are decrying and denouncing the move, but, ask yourself, when a species is no longer endangered, what justification is there for keeping it on the list? Just because it feels good?

So it goes with regulations. Sometimes, regulations are no longer relevant, or useful, or productive. Why keep them around? Sometimes, regulations don’t do what they were intended to do. Why keep them around? Sometimes, regulations are actually harmful. Why keep them around?

For many, it’s as simple as “Regulation Go-o-o-o-d!” If it’s on the books, it protects us against the eebil despoilers. Again, childish, but it’s how people think.

People are engaged in freak-outs over EPA cutbacks, as if Trump is deliberately out to destroy the environment and let marauders run amok. This is binary, hysterical thinking, often put forth without any support other than “Regulation Go-o-o-o-d, Trump Ba-a-a-a-d!!” Orwellian bleating, and it disables the ability to discuss whether what the EPA has been doing of late has been positive or negative.

By one count, over 20,000 new regulations were implemented during the Obama years. Regulations impose costs, restrict our ability to act freely and are often a playground for the savvy, the cronyist, and the nakedly selfish to gain benefit at others’ expense. Their benefits should be weighed against these costs and pitfalls, and those that fail in that weighing should be culled from the books. But, it often doesn’t matter whether they stand up to scrutiny. Nor does it matter that they’re brand new, and that the nation managed to limp along for decades and centuries before their enactment. They’re on the books, therefore they are deemed proper even when someone proves they’re pointless, wasteful or harmful. This is the baseline problem with regulation.

We face a similar problem with baseline budgeting. A budget item or expenditure, once it begins, is presumed to continue on “as planned” when it comes to discussing or judging policy proposals. Thus, as noted above, if a planned 10% increase is changed to 5%, it suddenly is considered a “budget cut.” And, the tendentious will find a way to declare it a “draconian 50% decrease” to the program. The less-aware and less-involved won’t see through this misdirection, and are apt to fall prey to the hysterics’ antics.

We also face the “baseline” problem when it comes to ineffective government programs. One of my favorite whipping boys, the Head Start program, eats up $10 billion a year, but by the government’s own analyses provides no measurable benefits. Why does it continue on? Because it’s the “baseline,” and killing it off, even though it doesn’t work, is considered a change for the negative.

Some have proposed measures to combat this “baseline” problem. They typically take two forms: zero-based budgeting and sunsetting. In the former, there is no presumption of continuation or planned increase – everything needs to be justified and reauthorized from scratch. In the latter, regulations have an expiration date, and require specific action to be extended.

This shifts the continuation of spending and regulations from passive to active, and when something needs to be actively done rather than continuing on all on its own, if it has few champions and many critics, it’s more likely to wither away. Bad spending and bad regulations are far more likely to fall off the vine under such approaches.

Unfortunately, making these change is work, these changes would upset many apple carts, and these changes would mean more work for politicians and bureaucrats, so they’re very tall orders. Making things even harder is the Press, which is Suspect #1 in “baselining,” which curates the presentation of news stories to guide and influence opinion, and which is all too happy to omit inconvenient facts, such as the vintage of regulations up for repeal.

So, we’re left with constant vigilance against the “baseline” trap as our first line of defense. When someone insists that removal of a regulation is de facto Bad, ask them why. Ask what purpose that regulation actually serves. And, ask them if, just perhaps, we’ve got too many regulations as it is.