mgmt 320 lecture 8 (De regulation)

[D3] What is substantive deregulation?

Changing the rule itself. Lawmakers rewrite it to be weaker, or getting rid of it completely

[D3] What is procedural deregulation?

The rule stays the same, but the government makes it hard to enforce, so the rule stops working.

[D3] Why does procedural deregulation matter even if the rule stays on the books?

Procedural deregulation weakens the rule by making it hard to enforce. even though the rule technically still exits.

[D3] What is the first method of substantive deregulation listed in the slides?

Changing the law

[D3] Consider the late 1970s deregulation of the airline and trucking industries. Who led that effort?

President Carter - a Democrat

[D3] True or False: Airline and trucking deregulation in the late 1970s only had support from one political party.

False - it enjoyed widespread bi-partisan support and was considered a success

[D3] What is a "sunset law"?

A rule that comes with an end date. When that date comes, the rule stops, unless the government votes to keep it.

[D3] Why do sunset laws make deregulation more likely?

Sunset laws make old rules end on their own. If a rule doesn’t work anymore, it just goes away. If it still works, lawmakers can renew it.

[D3] What is the third substantive deregulation method listed?

Replace “command and control”, swap strict rules for flexible goals.

[D3] What do "command and control" programs tell industry?

the government tells a business exactly HOW to do something - not just what result to achieve.

[D3] What does "flexible enforcement" tell industry?

the government tells a business WHAT result it needs - but now HOW to get there.

[D3] Why do regulators favor flexible enforcement over command and control?

By leaving the "how" to industry, the thought is that businesses will be more creative and cost-effective in reaching the goal

[D3] What is "preemption" (as a deregulation tool)?

A rule that says higher levels of government can pass laws that trump laws created by lower levels of government

[D3] How does preemption let a higher government "cancel" lower laws?

A higher level of government can pass a law that overrides/cancels laws made by lower levels of government

[D3] Does preemption only work for the federal government?

No - it works when the federal government passes a law, and also works when state governments pass laws that preempt conflicting city laws

[D3] What is the first procedural deregulation tactic listed?

Reducing the $ available to enforcement agencies ("starving the beast")

[D3] Why can Congress "starve the beast"?

Congress has the power of the purse; it can simply choose NOT to fund agencies responsible for regulating industries

[D3] Consider the January 2023 House Republican vote on IRS funding. What did it do?

Voted to rescind/cut billions in IRS funding that Democrats had passed to help crack down on tax cheats

[D3] True or False: The 2023 House vote to rescind IRS funding had enough votes to pass the Senate.

False - it did not have enough votes to pass the Senate

[D3] Besides Congress not funding agencies, how can the President "starve the beast"?

The President (via his cabinet) can simply not spend money that Congress has already allocated to regulatory agencies

[D3] What is the second procedural deregulation tactic?

Firing regulators

[D3] What did Trump do regarding leaders of "independent" agencies?

He simply fired leaders of so-called independent agencies (which are supposed to have members chosen by both political parties)

[D3] True or False: The Supreme Court blocked Trump from firing independent agency leaders.

False - the Supreme Court allowed him to do this (last June, per the slides)

[D3] What is the third procedural deregulation tactic?

Choosing people hostile to the mission of an agency to lead the agency and set policy

[D3] What is one option available to a leader who is hostile to their own agency's mission?

They can simply say "We don't have the power to regulate...."

[D3] True or False: Selecting skeptics (doesn’t support) to lead agencies has become less common over time.

False - it has become more common, especially when regulations themselves can't be rolled back

[D3] What is the first method of substantive deregulation listed in the slides?

Changing the law

[D3] Who did Mick Mulvaney criticize, and how, as head of the Consumer Financial Protection Bureau?

He asked Congress to gut his own agency and called the bureau "the very definition of tyranny"

[D3] Who did Trump pick to lead the EPA in 2016, and what was notable about this choice?

Scott Pruitt, a prominent climate skeptic who, as Oklahoma's attorney general, had led legal challenges to climate rules

[D3] What is the fourth procedural deregulation tactic?

Not appointing regulators

[D3] How many members do most regulatory commissions typically have, and what do they need to pass rules?

5 or 7 members, and they require a majority (a quorum) vote to pass rules

[D3] How does not appointing people to boards stop regulation?

Without enough appointed members, the commission can't reach a quorum, so it can't pass new rules - it simply doesn't regulate

[D3] Consider the Privacy and Civil Liberties Oversight Board in 2025. What did the Trump White House do?

The Trump White House told 3 Democratic board members to resign or get fired — shutting down the board's ability to function.

[D3] What is the fifth deregulation tactic listed?

Changing the equations - e.g., what goes into cost-benefit formulas

[D3] How did Biden and Trump differ in applying cost-benefit analysis (CBA)?

They differed in how they applied CBA to environmental rules

[D3] Why is changing what goes into the cost-benefit formula an effective deregulation tool?

It's an easy way to accelerate or block regulations without changing the underlying law

[D3] What happens to the cost-benefit formula if you decrease the "value of a statistical life" (VSL)?

Lowering the VSL makes a rule’s benefits look smaller - making it easier to weaken or block the rule

[D3] Define "value of a statistical life" (VSL).

VSL is the dollar value of slightly lowering someone’s risk of death - not the value of one specific person’s life

[D3] Give the example used to explain VSL.

if 10,000 people each get a tiny 1 - in 10,000 risk of dying , that adds up to “one statistical life saved”