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COVID-19 Is Forcing Governments to Admit Their Regulations Aren't Really Necessary

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Tags Bureaucracy and RegulationEconomic Freedom

04/16/2020

It’s no exaggeration to say that most of the blame for the world’s poor response to the coronavirus pandemic can be laid squarely at the feet of politicians and bureaucrats.

Even as it became clear that the virus was becoming increasingly dangerous, politicians around the world were quick to downplay its severity. The Chinese state attempted to silence those trying to broadcast warnings, while American political leaders actually encouraged folks to go out and party in crowded public areas. When coronavirus cases were finally confirmed within the United States, many realized that burdensome regulations were preventing private firms from taking measures to fight the pandemic.

Will those responsible face a reckoning for their massive failures?

Anti-Health Regulations

They certainly ought to. From the very beginning, government regulators got in the way as innovative firms worked to develop an accurate coronavirus test. The government fought hard to make sure that private labs could not offer coronavirus tests at all. In fact, the first positive test in the United States was conducted illegally, as researchers became impatient waiting for the Food and Drug Administration to grant them approval.

Weeks into the crisis and the FDA was still throwing up unnecessary hurdles. Arrogating to itself the power to prohibit all testing conducted without its express permission, the agency slowed progress at the time when detecting the virus was most crucial. “I could have tested over 1,000 patients by now instead of checking boxes,” one frustrated researcher said.

Bureaucratic red tape has also prevented hospitals from getting desperately needed supplies. Current regulations require FDA inspection of medical supplies before they can ship, and with massive new orders flowing in to manufacturers, the inspectors simply can’t keep up. But rather than allowing the market to work by letting hospitals freely order supplies from trusted producers, the FDA has refused to budge on its strict rules.

As Tom Rogan reported at the Washington Examiner, one company “had more than 20 pallets of coronavirus-specific medical supplies waiting in a warehouse for five days….At another depot in the south-central United States, this same supplier has had 500,000 level-three or level-four masks sitting in a warehouse for two days now. They expect the FDA delays to continue indefinitely.”

Moving in the Right Direction

These kinds of stories are more than enough to make one’s blood boil. But, thankfully, there are indications that as the crisis grows the federal government and state governments will be willing to waive their anti-health regulations.

Massachusetts, for example, has granted temporary licenses to nurses who are already licensed in other states. Other states have quickly followed suit. Before the crisis began, only three states had automatically licensed doctors and nurses who held out-of-state licenses: Arizona, Pennsylvania, and Montana, which decided to grant them on a permanent, rather than temporary, basis.

Several states have also moved to suspend their so-called “certificate of need” laws, which require healthcare facilities to receive government approval before establishing or expanding their services. As Vittorio Nastasi at the Reason Foundation writes, “Ample research suggests that CON laws increase costs and reduce access to care by limiting competition and supply.”

Nastasi also notes that some states are loosening their requirements under “scope of practice” laws, which restrict the “range of services medical professionals are permitted to provide.” Often the restrictions make little sense, requiring doctors to perform tasks that could be easily and competently done by a nurse. Relaxing scope of practice laws will go a long way toward making coronavirus testing and treatment more efficient.

Will We See Permanent Deregulation?

Unfortunately, many of these regulatory reforms are temporary. And although all of them should have been enacted before the pandemic began, the pandemic is what has allowed deregulation to be politically possible.

But it may also be the reason that the reforms never become permanent. The vast majority of state governors and federal regulators responsible for the deregulations have justified them, not by any prior commitment to advancing liberty, but by their necessity to counteract the pandemic. Once the coronavirus threat has been sufficiently mitigated, it is highly unlikely that these same politicians and bureaucrats will tolerate “emergency deregulations” becoming the new normal.

Moreover, many regulations exist because they benefit powerful interest groups. Once the emergency has subsided, these groups will argue vociferously in favor of reinstating their favored regulations.

In fact, some of the recent reforms have already received significant pushback. Florida’s attempt to ease its scope of practice laws, for example, was intensely criticized by the Florida Medical Association (FMA). The group has opposed reform for decades despite the fact that its state is one of the most restrictive in the country. The bill passed anyway, though the FMA will probably continue to fight for its repeal.

Nonmedical deregulations are likely to face even more scrutiny once the crisis has passed, particularly those related to food and adult beverages. Governor Abbott of Texas recently waived a curious law which prohibited trucks carrying groceries from also carrying alcohol. Boston is now allowing nearly every restaurant to offer carryout without a license. And throughout the country, state and local authorities have issued orders permitting restaurants to offer alcohol with takeout and delivery orders. But even these somewhat small and sensible measures have faced criticism.

It is, of course, entirely possible that the coronavirus will create a lasting paradigm shift toward more liberty and fewer government controls. Should public outrage at the deadly failures of bureaucracy and petty regulatory prohibitions be loud enough, the pandemic could wind up being the catalyst for the significant institutional reforms for which libertarians have been advocating for years.

But don’t hold your breath.

Author:

Tyler Curtis

Tyler Curtis is a lender at a community bank in Missouri, and earned an undergraduate degree in economics from the Missouri University of Science and Technology.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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