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Republicans Are Right About Deregulation, But They're Choosing the Wrong Targets

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Last week, a group of conservative Republicans held a semi-secret meeting outside of Washington to formulate a policy agenda for “constitutional conservatives.” Time’s Zeke Miller obtained a copy of that agenda, which contained the typical conservative goals of lowering taxes, balancing the budget, replacing Obamacare, securing the border and protecting religious freedom. The manifesto did not delve into policy specifics, but instead offered a broad outline of conservative goals.

Here’s what it said on regulation:

  • Remove artificial barriers to energy exploration and production, such as blocking Keystone XL.
  • Create a strong regulatory review process in Congress.
  • End regulations that encourage fewer jobs with shorter hours.
  • Eliminate ineffective regulations—and pending regulations—that keep businesses from hiring.

Many regulations are vital to correct market failures or uphold societal norms, and deregulation is not a macroeconomic tool for recovering from a recession. But there are many regulations in our economy that stifle long-term growth and choke off innovation. Three areas in particular stand out: housing policy, copyright law, and occupational licensing.

Housing regulations in cities across the country artificially limit the supply of housing and drive up prices. This is a policy choice. Relaxing zoning regulations would set off a construction boom and lower rents dramatically.

Copyright law is intended to encourage the creation of creative works by granting the authors a monopoly for a limited time. When the framers first included copyright law in the Constitution, “a limited time” meant a 14-year renewable term. Now, it means the life of the author plus 70 years. That length is far longer than necessary to incentivize artists to create their works. Instead, it stifles growth by limiting the ability of artists to use past works—those in the public domain. Derek Khanna, a conservative, was fired in 2012 from the Republican Study Committee for publishing a memo that argued for shortening copyright terms, which he has further argued in a policy study for R Street Institute and a cover story for The American Conservative.

Finally, state occupational licensing laws create unnecessary barriers to entry for potential business owners across the country. Why does a hairdresser need 2,000 hours of training? These laws exist to protect incumbent businesses and workers from competition. Like deregulating the housing industry, removing occupational licensing laws must happen at the state and local level, but it can still be a feature of the GOP’s platform.

Republicans set on deregulating those three areas would have a strong growth agenda. Instead, the GOP's deregulation agenda is based not on economic growth, but politics, with a particular focus on Obamacare and the energy sector. That’s not surprising. Obamacare and EPA regulations are unpopular with the American people. It’s easy for Republicans to rail against those without risking a backlash from the real estate industry or Hollywood. But if the GOP was really committed to sparking growth through deregulation, you would hear a lot more about housing policy and a lot less about the Affordable Care Act.