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Thread on regulation: For decades, regulation (“red tape”) has gotten a bad rap. Why? Let me explain. 1/
Consider the Clean Air Act. The EPA estimates that, since 1990, it has generated $2 trillion of benefits, while costing $85 billion. That seems like a pretty good deal. Who could possibly oppose that? 2/

epa.gov/clean-air-act-…
The answer is in the distribution of costs and benefits. The benefits are widely distributed throughout the economy, while the costs are concentrated on the polluters.

Polluters hate this — they bear the costs, but don’t capture enough of the benefits. 3/
So the companies complain about “burdensome” and “overreaching” regulations that cost them billions of dollars! This is a true statement, but it omits the fact that it generates trillions of dollars of benefits. 4/
Then they say how it’s hurting the economy, costing jobs, etc. This is a lie. The economy is actually better off WITH THIS REGULATION. But they nevertheless find pliable elected representatives to oppose the regulations. The is the epitome of corrupt, crony capitalism. 5/
You see, the corporation would rather make that extra $85B even if it eliminates trillions of dollars of benefits for the rest of the economy. This is a classic market failure. 6/
We've seen this before. Opioid manufacturers made a few billion extra $ pushing dangerous drugs, but cost the economy trillions of $. 7/

whitehouse.gov/articles/full-…
So next time you hear a corporation saying we should eliminate “red tape”, put your hand on your wallet because they’re trying to take your money away from you. 8/
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