Regular readers of this column know that, like everyone else, I’ve been trying to explain how America has maintained the longest economic growth cycle in its history. It’s obvious how growth occurs coming out of a recession (mostly recently from 2009 on), but keeping growth going has been a mystery. I have pointed primarily to deregulation as the secret ingredient. The United States has become excessively regulated, which has choked off even higher levels of economic growth.
Overall, we are now seeing that excessive regulation also cost lives during the COVID-19 crisis. The problem with excessive regulation is that it slows down progress, reduces risk-taking, and increases paperwork. The theoretical advantage is in accuracy. No doubt some tests and medicines that have come out of China have not performed as intended. The problem is no politician, or certainly legislative body, is smart enough to know what policies need to be in place for changing dynamics and emergencies. It simply isn’t possible. Policies are typically written for stable times. No one has a good enough crystal bill to write what the process should be in an emergency.
The Dispatch has identified three government policies that have dramatically slowed testing for COVID-19 in the United States: 1) obtaining an Emergency Use Authorization (EUA); 2) being certified to perform high-complexity testing consistent with requirements under Clinical Laboratory Improvement Amendments (CLIA); and 3) complying with the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule and the Common Rule related to the protection of human research subjects. On the demand side, narrow restrictions on who qualified for testing prevented the U.S. from adequately using what capacity it did have.
Wouldn’t you think that a regulation titled “Emergency Use Authorization” (EUA) would sound like it would speed up processes? Paradoxically, it has actually slowed testing. Private labs who were doing testing suddenly had to stop and apply for, and be granted, an EUA before continuing. The intent theoretically makes sense. Since the situation has been considered an emergency, the outcome needs to be correct. The culture of America, however, prefers innovation, decentralization, and pioneering efforts.
The New York Times has also published lengthy articles about how regulation has hampered the American response to COVID-19. They reported “the commissioner of the Food and Drug Administration, enforced regulations that paradoxically made it tougher for hospitals, private clinics and companies to deploy diagnostic tests in an emergency.”
Many Americans were excited about the possibility of at-home COVID-19 testing. However, on March 20, the FDA clarified that their relaxing of regulations did not apply to at-home testing, which forced companies offering them to cease offering them for sale. The state of New York also requires that only registered nurses are qualified to take a swab for a COVID-19 test.
There are other more general issues with the way government works. If society has an issue that needs the nonprofit, voluntary, and for-profit sectors are more effective and efficient. For-profit companies, for example, have to be responsive to customers, or else they will go out of business. Government doesn’t have to be responsive. I found out that there have been numerous audits and recommendations to the U.S. government over decades to be better prepared for a pandemic. In 2003 after the SARS outbreak the Government Accountability Office (GAO) reported that hospitals were unprepared and did not have enough ventilators. As recently as 2017 a CDC report warned that the Strategic National Stockpile of ventilators was inadequate. As we all clearly realize now, no politician did anything about this.
Government isn’t just a problem at the federal level. In the mid-2000s, I flirted with the idea of opening an outpatient surgical center in Lumberton. My idea came to an immediate halt when I read the Certificate of Need (CoN) law in North Carolina. CoN laws throughout America allow existing businesses to prevent competition and increased services to people by blocking new businesses from being created. CoN laws have reduced the number of hospital beds across the country.
So, reducing excessive regulation at all levels of government is not just a matter of helping the poor get more jobs, it is also a matter of life and death.
