TightWind is written by Kyle Baxter. Stay Hungry. Stay Foolish.

Megan McArdle points out an under appreciated cost of federal regulation:

But this may just be the broken window fallacy in action: we see the distortions of the local government, but the distortions of the federal government remain invisible precisely because they’re so effective at destroying innovation. The more national the rules, the harder it is to tell whether they’re bad.  

The economy would not be destroyed if we had federal laws against Uber and food trucks; we’d all just be a little worse off. The problem is, if the rules were national, none of us would even know that we were worse off. No one would ever have tried to start a food truck, so Matt and I wouldn’t even know that there was this great thing we were missing. We may be assuming that the Federal rules work pretty well precisely because they have entirely foreclosed a bunch of great possibilities that we’d really enjoy.

One huge benefit of allowing states significant autonomy is that we can test different policies without subjecting the entire nation to it, and we can compare results to states that followed a different policy path. That’s much less likely when more and more policy-making occurs on the federal level, and worse, we can be blinded to different policies that could be more effective or to the costs of current policy.