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Dr. Daniel Sutter: Evaluating pandemic deregulation

The COVID-19 pandemic disrupted life in many ways. Governments across America assumed new powers without explicit authorization. But laws restricting businesses were also suspended. As the pandemic ebbs, we should evaluate this deregulation experiment and consider permanent changes.

Americans for Tax Reform counted 846 suspended federal and state rules. Some were narrow matters, like allowing ambulances to transport patients to urgent care facilities. Others were more substantial, to enable the production of ventilators and not require the CDC to perform all COVID tests.

Chicago Mayor Rahm Emmanuel famously opined, “Never let a crisis go to waste.” Many politicians have taken this to heart during the pandemic. As the research of economic historian Robert Higgs shows, “crises” are frequently used to permanently expand government.

I totally oppose exploiting crises for political gain. Temporarily adjusting rules when changed circumstances alter the benefits and costs is prudent and wise. But deceptive wording to make a temporary suspension permanent undermines social trust. We should be helping each other during a crisis, not guarding against dirty tricks. Politicians who try doing so deserve our scorn.

The hundreds of waived rules provide natural experiments, and we should evaluate the evidence. Many proponents of government rules fear that unregulated markets would produce disaster. What happened without government supervision during pandemic deregulation?

Economists are undertaking such research and the results will emerge in published studies. Sober deliberation might lead us to amend or abolish some of these laws. This is how a crisis should change policy.

What already seems clear? Allowing restaurants to sell cocktails to go provided important relief. Thirty-nine states and the District of Columbia permitted this during the pandemic with more than a dozen making this permanent. Alcohol can account for over one third of sales and has high markups over cost and take-away food sales alone could not make up for this revenue.

The value of cocktail freedom going forward is unclear. Customers probably valued their favorite cocktails when forced to dine at home. To-go drinks will need to be distinctive to remain attractive to take-home customers given the steep markups.

Health care has featured some significant rule waivers. Telehealth has received an enormous boost. Like remote work, the required technology has existed for some time. Legal restrictions were holding telehealth back. The pandemic forced experimentation for patients fearful of catching COVID at a doctor’s office.

Telehealth, though, offers enormous benefit going forward, particularly for residents of underserved rural areas. Safety is also a factor: individuals with health conditions can avoid potentially dangerous drives to doctors’ offices. Patients with rare illnesses or difficult cases can consult more specialists.

State licensure creates barriers for virtual consultation across state lines. State medical boards claim to uphold quality in licensing, but this is only true if other states license unqualified quacks. I read about a Pennsylvania patient again facing a two-hour drive to Johns Hopkins in Maryland with the end of the pandemic exemption. Does the Pennsylvania medical board truly think that doctors at Johns Hopkins – one of the nation’s leading medical schools – are not qualified to treat Pennsylvanians?

Pandemic deregulation waived limits on medical professionals known as scope of practice regulation. For example, physician assistants were allowed to practice to the extent of their training. Scope of practice limits are driven by profits, not safe medicine and simply keep professionals from fully employing their expertise. Researchers will determine if these exemptions increased misdiagnoses; if not, this would demonstrate the limits’ lack of medical purpose.

Liquor stores have opposed takeaway cocktails and offered a safety rationale: customers might imbibe while driving home. But so could thirsty liquor store customers. Pandemic deregulation’s most enduring benefit may prove to be exposing bogus rationales for rules benefitting one group of businesses over another at the expense or inconvenience of consumers.

Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision. The opinions expressed in this column are the author’s and do not necessarily reflect the views of Troy University.

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