Cato Institute Hailed for “Private Regulation” Oxymoron

WASHINGTON — Hours after it released a call for “private regulation” to replace key federal regulatory functions, the Cato Institute won sardonic accolades Monday for “sheer wackiness in the service of deregulation mania.”

The influential think tank urged the federal government to consider discarding regulatory roles “such as certification, inspection, monitoring and product testing.” Cato touted advantages of “shifting regulatory roles now assigned to government to independent agencies.”

But some specialists in regulatory issues quickly dismissed the idea.

Michael R. Lemov, who was general counsel of the federal National Commission on Product Safety during the Nixon administration, said Monday that Cato’s analysis “is fundamentally flawed because it is contrary to the conclusions reached by numerous government and independent studies.”

Lemov, a partner at the Washington law firm of Winston and Strawn, added: “Voluntary regulation without governmental regulatory oversight often sinks to the lowest common denominator. The producer with the lowest margins or the least interest in safety can dominate the group and keep the standards low.”

Reece Rushing of OMB Watch took issue with Cato’s claim that “traceable costs of regulations” total $710 billion per year. He said that a recent OMB study estimated the cost of regulation at $279 billion and put the benefits at $298 billion. He added: “What is the cost of a human life and a grieving family caused by hazardous practices?”

At Public Citizen, Maura Kealey said that “to turn vital environmental and public health inspections over to private, for-profit firms is to put the fox in charge of the hen house…. The only thing private inspectors would be ‘independent’ of is accountability to the public interest.”

Researchers with the Institute for Public Accuracy, a nationwide consortium of policy experts, described Cato’s “private regulation” scenario as “sheer wackiness in the service of deregulation mania — part Lewis Carroll, part George Orwell, and all aimed at pulling teeth from federal watchdogs.”

Unmentioned by Cato was the fact that many of its corporate funders would benefit financially if Cato’s recommendations for “private regulation” were implemented.