Healthy Skepticism Library item: 348

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Bivens M.
Irrational Rationing
The Nation 2004 May 20

Full text:

Imagine that you own a business that develops and markets a wildly successful diet pill. Profits are soaring, the stock market takes note and you are poised to make gazillions. Suddenly, some people who take your pill start to develop an undesirable side-effect. Roughly every 100th customer who spends a few months on the pill spontaneously combusts.

Luckily for you, my entrepreneurial friend, Americans are lunatics about work-free weight loss. Your profits slip — but they are still enormous, as men and women everywhere shrug at a 1-in-100 risk of going up in a poof of flames, and continue popping your pills.

Enter the Feds. Naturally, they are going to aggressively regulate a product that brings a messy death to thousands of customers. Let’s say that they suspend your business, study it, and then insist you include a proven-yet-costly ingredient that heads off the bursting-into-flames side-effect — an ingredient so expensive that it severely curtails your profits.

So here’s the question: At what point should the Feds — whose meddling has cost you so much cash — have to stand down?

If your answer is: ““What!?” That’s insane!,” then congratulations: You are a person with a normally-functioning moral and ethical compass.

If your answer is: “That’s a significant question and we really ought to budget Federal money to study it!” then congratulations: You are ready to serve in the hallowed halls of the US Congress.

The House of Representatives just passed a bland-sounding 10-page bill (seen here as a PDF file), the “Paperwork and Regulatory Improvements Act of 2004.” Much of it sounds wonderful: It talks about forcing the IRS to stop bothering us with hieroglyphic tax forms, for example.

But on page 9, the bill suddenly endorses the bizarre concept of “regulatory budgeting,” and directs the White House green-eyeshade guys — the Office of Management and Budget — to formally study how “regulatory budgeting” could be brought in at agencies dealing with labor, environmental protections and public health.

That’s an interesting threesome of agencies to consider for this experiment. Because as consumer advocates Public Citizen explain , “Regulatory budgeting imposes a limit on the costs that federal agencies can impose on the private sector. With regulatory budgeting, once the cap on costs has been reached, agencies must stop fulfilling their mandates, regardless of the need for continuing public health, safety and environmental protections.

Regulatory budgeting elevates the interests of corporations over the public interest.”

A similarly grim interpretation is offered

by OMB Watch : “The ultimate vision of regulatory budgeting is a world in which the economists have the final say on our public safeguards — as incalculable and literally priceless benefits such as lives saved, irreplaceable natural resources conserved, and diseases prevented, are turned into cash-dollar figures and weighed against the costs to industry of complying with new protective rules. Our safeguards could then be ‘budgeted’ and subjected to arbitrary caps.”

So if your coal-burning plant causes asthma that kills dozens of elderly Americans each year — and the Feds demand a multi-million-dollar filtration system in response — “regulatory budgeting” can be your salvation. All you have to do is prove, mathematically, that the economic gains of saving the lives of elderly Americans (who look cheap on paper since they are near the end of their economically productive lives) are outweighed by the economic loss of plant upgrades. Ditto for your hypothetical exploding diet pill: Prove on paper that the thousands of deaths cost less in lost economic productivity than the burden of your safety upgrades, and the Feds can choke in silence on their own “regulatory budget.”

Still makes no sense to you? Well, maybe it’ll be clearer after the Bush Administration, as per the direction of the Tom DeLay Republicans, “studies” the matter. With your money.