AllegedWisdom

In most agencies, economists almost never interact with lobbyists. The lobbyists always aim at senior management, and almost all lobbying takes the form of 'We care about X and we want you to validate that by signalling that you also care about X' or 'We are presenting a credible threat to sue you if you do Y'. This is useful political and tactical information for management, but it does not affect the economic numbers at all. In theory a lobbyist could present useful information about a hard-to-research topic that informs our analysis, but I've never seen that happen.

The optimal cutoff would probably have been $20 million rather than the $10 million that was chosen, but that change would have been too much for a lot of people. If I had only presented options from $1M up to $20M, then the group probably would have chosen $5M no matter how much I argued for $20M. I had to put the $50M number in people's heads so $10M seemed less of a jump.

In many cases (the water standard rule was one of them) the bureaucrats are acting on direct orders from Congress. Congress usually passes those laws demanding regulations to be written as a result of people asking the government to 'do something' about a problem that harmed an identifiable victim. Then the lobbyists get involved. Blaming bureaucrats for those regulations is like blaming coders for what happens after they get told to implement an incoherent design document.

Excellent comment.

Many people associate 'economist' with politicized talking heads arguing about ideological issues, but that is a tiny fraction of the profession, just like the most politicized tech CEOs are the tiny fraction of the tech community that gets the most outside attention.

Regulations will always have costly unintended consequences, and this will never be fully resolved. But the damage can be mitigated and things can be made more efficient by having numerate big-picture thinkers involved early in the process. Many economists do manage to make things better.

In theory, people from any discipline can be numerate big-picture thinkers. But in practice, most hard scientists tend to have a very narrow-minded focus on optimizing the the thing they study most, and ignoring everything else. Lawyers are usually pretty good at trying to think about the big picture and all the people affected, but they are rarely sufficiently numerate to properly analyze and compare things.

When irrigation water is put directly on produce that will soon be consumed raw, it will transmit pathogens and should be drinking-water standard. This was not disputed, and was in the final rule.

However, if the water will go through manure before being absorbed by the the plant's roots, it is very wasteful to first purify it to drinking-water standard. Drinking-quality water is not everywhere in the quantities needed for irrigation, it requires expensive filtration and processing. Everyone saw the logic of this when it was pointed out, nobody was 'stumped'.

I definitely understand that centralized bureaucracy and decision making can be very harmful. I also know that the lack of centralized bureaucracy and decision making can also be very harmful, for example by killing tens of thousands of people with trans fats (or air pollution, or communicable diseases, etc.) We are playing an unavoidable game for very high stakes, where inaction can be as lethal as action.

The typical cycle is that something obviously bad happens to an identifiable victim that can be traced to lack of regulation, then congress and/or the courts force regulation, and then the regulation causes a lot of invisible harm that may or may not be greater than the harm it prevents. My job is to try to make these inevitable regulations do more good than harm.

There would have been a public notice and comment period before the rule went final. But industry often fails to notice things, and quite often, when industry asks for standards to be lowered, consumer groups reflexively insist that they remain as proposed. The outcome ends up being based mainly on politics, which is why getting the proposal right matters.