Friedersdorf: To reform the regulatory state, should we be thinking in terms of big versus small? Powerful versus weak? Smart versus dumb? Competent versus incompetent? Flexible versus inflexible? Some other paradigm? What particular steps should be taken to improve the performance of the regulatory state?
Cowen: So much needs to be done. First, we need far more data on the scope of regulation, what it does and doesn’t do, and its costs. Second, the possibility of excess regulation needs to become a political issue once again, as it was right before the time of airline deregulation. Third, America needs to be far more open to learning lessons from other countries. “Smart versus dumb” is the best framing of the ones you list. And we should not be reluctant to admit and indeed emphasize that some areas, such as carbon emissions, require much more regulation. That said, when it comes to green energy, some doses of deregulation could help as well—right now it is very difficult in many communities to build a wind farm, even though that is a very green form of energy.
Friedersdorf: Are you aware of any particular government agency that outperforms most others? If so, what lessons can we take from it?
Cowen: The response of our Federal Reserve System has been excellent. They prevented a global financial crisis by prompt action in mid-March, and in general, Fed monetary policy has helped stabilize the economy. The Fed has an excellent staff, reasonable governance, and first-rate leadership at the top. You will note that the Fed is largely autonomous; outside of normal civil-service regulations, they pay staff more than does the federal government. Perhaps our public-health bureaucracy should move in a similar direction, as my colleague Garett Jones [a GMU economics professor] has been suggesting.
Friedersdorf: If political leaders and bureaucrats took your critique to heart and started making changes, what would we look for as markers of success, and what would signal that they were going too far and overcorrecting?
Cowen: An obsession with data and with learning from other countries do not themselves constitute success. Still, they are very good starting points to look for. Another simple sign is when American institutions dealing with COVID-19 testing and PPE supply report that the government is a greater aid than hindrance. We are not there yet. As for a sign that we have gone too far, one would be if we distribute a doubtful vaccine for reasons of political expediency without sufficient testing and study.
Friedersdorf: As you look ahead to pandemic challenges we’re likely to face in the future, what prospective regulatory-state failures worry you most? What preemptive correctives can be taken to avoid them?
Cowen: Eventually, we will indeed get PPE and COVID-19 testing problems worked out, even though many lives will have been lost in the meantime, and many jobs destroyed. Over the medium term, looking forward, I am more worried that biomedical research doesn’t get funded quickly enough, risk communication from our executive branch is abysmal, and our plans for reopening are not very coherent or well understood, by either citizens or even policy makers themselves. As for recommendations, I would repeat the various points suggested above.