There is no reason why the CFPB or other agencies could not build on such steps to work with those regulated. Business then could proceed aware of public objectives, and offer ways to accomplish them at minimum cost to all involved. Such a system would, of course, dispense with today’s legalistic reliance on rules, and trust regulators’ judgments of what best serves public needs. (There is admittedly a risk here of what is called regulatory capture, when regulators, instead of focusing on public interest, become the allies of those they otherwise oversee. If that remains a risk, it is not as if the present adversarial approach has stopped regulatory capture in the past. Indeed, reliance on regulators’ judgments and objectives, instead of voluminous rules, might do a better job of guarding against regulatory capture than today’s system, in which the regulated are often the only people with detailed enough industry knowledge to write the rules to which the regulatory lawyers plan to hold them.)
No doubt such an approach would require a way to review regulatory judgments. That review would inevitably have a political dimension. The entire effort to develop an effective review process and alter the culture of the regulatory bodies in this country would take a long time. Initial efforts by this administration could, at most, start this long process. But it would pay handsome dividends in lower costs, both in the regulatory process and to the economy, and by disarming hostility to government—in business, certainly, but also with the general public. It would certainly make Washington look less ridiculous than it does, with rules demanding, for instance, wheelchair access to the fire brigade’s sleeping quarters. Combined with tax and entitlement reform, as well as improvements in the nation’s infrastructure, the entire effort would create a more responsive and responsible policy environment that would promote economic growth and relieve much of the bitterness between the public and the government, as well as political tensions generally.
Milton Ezrati is a contributing editor at the National Interest, an affiliate of the Center for the Study of Human Capital at the University at Buffalo (SUNY), and consults as chief economist for Vested, a New York–based communications firm. His latest book is Thirty Tomorrows: The Next Three Decades of Globalization, Demographics, and How We Will Live.