...for example, the laws that forbid car companies from selling directly to consumers, creating a vast industry of middlemen. You can also find clear examples of careless bureaucratic overreach and inertia, like the total ban on sonic booms over the U.S. and its territorial water (as opposed to noise limits). These inefficient constraints on perfectly healthy economic activity must reduce the size of our economy by some amount, acting like sand in the gears of productive activity.
The question is how much. Hardcore free-marketers often claim that the cumulative effect of regulation is very large, and that dramatic cuts in regulation could boost economic growth for many years. The problem is that it’s very hard to find solid evidence to back up this assertion. If regulation is less harmful than the free-marketers would have us believe, we risk concentrating our attention and effort on a red herring. But because regulations are all very different, and they act on different industries, simply getting an idea of the overall cost of regulation is a daunting task...