Regulation v insurance
In a move designed to reassert control over the mechanisms of government, Pres. Bush recently signed an executive order requiring all regulatory directives be approved by political appointees. (registration required)
This will have a significant impact on occupational health initiatives, regulations, and enforcement.
Backed by the Chamber of Commerce and other business-focused lobbying groups, the executive order requires agencies to prepare a comprehensive cost benefit evaluation of each regulation, and appears to prevent adoption of any regulations that can't be proved to address a "specific market failure."
While the Chamber was elated at the order, I'm betting workers comp insurance companies are somewhat less than enthusiastic. They will be required to pay claims resulting from injuries and illnesses and other losses resulting from occupational injuries. Thus, the mechanism of insurance will address the problem.
To this layman, it appears that this new executive order substitutes insurance for regulation, as insurance is the market's answer to occupational injuries.
Comments
Your points are very much on the mark. If one says that a specific market failure is required for regulation to be justified, then you can kiss off the entire OSHA program. When Mr. Smith dies due to a critical, well known safety failure that could have been regulated by OSHA, you have a dead worker and a grieving family, but not a specific market failure within eye sight.
Posted by: Peter Rousmaniere | January 30, 2007 9:15 PM