Foundations of the Regulatory State
Spring 2003, Section 2Comments on memo assignment #2
(Posted 3/24/2003)
For your reference, here is a link to the original assignment.
The second of essays were generally well done and in stylistic terms better written than the first batch. The bullet-point format contributed to that in part, but I think you are also becoming more adept at using course concepts and applying them to a specific regulatory problem. A number of you could use a little more practice with the bullet-point format; for example, some of you combined two or even three ideas in a single point, while others wrote in an extremely abbreviated fashion using sentence fragments or even single words or phrases as the individual elements of your memo. Remember that the function of a bullet-point memo is to provide information effectively and efficiently to a busy reader, and so it should be written to be readable, with transparent organization and complete [or almost-complete] topic sentences..
A number of you exceeded the 500-word limit, notwithstanding that the bullet-point format allows you to write more concisely. Except in extreme cases we did not mark down for this, but you should attend to the limit since a final exam exceeding the official word limit by more than a modest amount will be marked down in proportion to the excess. The final exam questions will allow more space [1000 words as opposed to 500 on the memos] but it is good practice to try to write effectively within the tighter limit.
The one dimension in which most people could have improved was in raising and addressing counter-arguments. This assignment was framed as an internal policy memo, not an advocacy brief, but even so it is important to assess opposing arguments fairly. One-sided advocacy briefs may be effective in rallying those who already agree with you, but they are less effective at persuading the uncommitted, especially when the audience has access to arguments from your adversaries. In addition, from the practical perspective of evaluating you in comparison with other students in the class, I need you to demonstrate to me that you have mastered the ideas of the course, including those with which you disagree. Some of you did raise counterarguments, but presented them in a way that was less than fully effective. For example, an organization which separates arguments and counter-arguments into different sections or headings is generally less effective than one in which arguments and counter-arguments on a single point are combined in a single paragraph and then reconciled.
Most of the memos were initially graded by the TA's; I then looked over the memos and made a few changes and a number of comments [generally in blue marker]. I also graded a few memos myself from scratch. Unless the comments on your memo bear my initials, memos by Agour thru Farkas were graded by Abigail Wen, Friedman-Paskowitz were graded by Jacob Oslick, and Pate-Zipp were graded by Laura Faer. You are welcome to discuss with me memos that were graded by the TA's, or vice versa.
Attached to this memo are a sampling of student essays that I thought were among the most effective we received. The great majority of you [80-90%] were in favor of imposing disclosure requirements on fast-food outlets. For the sample essays, I chose essays that were somewhat less representative in this regard but that do an especially good job of addressing possible counterarguments.
Key to symbols used to mark essays:
On some essays we circled particular words or phrases that seemed found questionable or unclear, and/or attached these symbols to them.
good point or argument ! excellent point or argument ~ fair point, or incompletely or unclearly expressed – weak point … point needs elaboration " point already made, repetitive, or unnecessarily restating facts ? unclear ?? very unclear, confused, mixing together separate points x mistake of law, misstatement of fact, misuse of term x? point appears mistaken # irrelevant or tangential point #? point's relevance unclear c-a fails to discuss obvious counterargument conc conclusory statement; reasons need to be provided and explained evid evidence needed to substantiate point exag exaggerated or overstated point na
point is not applicable to this situation
ns non sequitur: conclusion does not follow ff fighting facts: contradicting stated facts or making assumptions inconsistent with them ll laundry list: throwing in relevant and irrelevant arguments alike, without distinction lec lecturing: abstract discussion unconnected to the problem at hand sa straw argument: misrepresentation or oversimplication of opposing argument ua unsupported assertion / unidentified assumption vb
verbose; too much space devoted to the point or points in question
vg
discussion is overly vague or overly general
[1]
MEMO TO ELLIOT SPITZER
Ø We should NOT address the Obesity Problem
o Fast food/chain restaurants should not be required to provide nutritional information on their menus
§ The disadvantages of such regulation would outweigh any potential advantages
§ This is not the type of problem we should be regulating
Ø Requiring fast food chains to provide information would be unsuccessful
o Regulation isn’t feasible
§ Fast food is often made to order, so precise information isn’t possible
§ Counter: We could require general warnings (like the warnings on cigarette packs) to be posted at food counters
§ But: general warnings are vague, easy to dismiss and often ineffective (people still smoke)
o Regulation won’t change behavior
§ There is little evidence that nutritional labels influence people
· Labels don’t hurt retail “junk food” sales
§ Counter: other studies have shown they can be somewhat influential
§ But: we need proof that lack of information is a primary cause of obesity and that labels have a substantial influence
o Regulation would lead us down a “slippery slope”
§ Fast food restaurants could (rightly) demand to know why we are not regulating all restaurants
· Four-star restaurants serve fattening foods; we could be accused of discrimination
· Counter: the obese frequent fast-food restaurants more than other restaurants
· But: this doesn't mean that these restaurants cause obesity; other factors (such as income levels) could be controlling
§ How would we determine which chains/restaurants qualify?
· Where do we draw the line, and who draws it?
· No easy answers, so we shouldn’t enmesh ourselves in regulation
o There might be a great deal of resistance to regulation
§ Result: costly litigation with restaurants
§ We don’t know that customers want regulation
· Even if they do, they might not be willing to pay much for it
· In troubled economic times – and with pressing issues looming (war, unemployment) – there is a good chance voters will see this issue as superficial and an unnecessary waste of time and money
Ø Private institutions are better equipped to handle the problem
o The state shouldn’t interfere with a valid contractual exchange between voluntary actors
o Since not all (or even most) people become obese from frequenting fast food restaurants, it is better to solve the problem ex ante through personalized litigation
o People have a fundamental right to eat the foods they choose, so we shouldn’t interfere
§ Exception: if a fast food restaurant explicitly violates the law (ex: lies about nutritional information)
§ But: society as a whole has not determined that serving fattening foods without nutrition labels is criminal (and it probably never will)
§ We have nothing to gain from making an ill-informed decision about this issue
Ø Conclusion: if we require regulation, there will probably be:
o No tangible affect on obesity
o Wasting of taxpayer money
o Potential political embarrassment
Ø The costs of labeling would be high; the benefits are uncertain. We’re better off avoiding the issue altogether
[2]
To: State Attorney General
From: Policy Analyst
1. OBESITY IS A PROBLEM THAT NEEDS TO BE ADDRESSED BY THE STATE
v People may not recognize that obesity is a serious health problem
o Obesity may be becoming the norm, obscuring people’s ability to think of obesity as a problem.
§ With 2/3 of the population classified as obese or overweight, people may be more likely to view obesity as just a part of life.
o People have a tendency to blame themselves (and be blamed by others) for being overweight. Thus, people incorrectly do not seek remedy through state action.
§ The sharp increase in the prevalence of obesity since the 1960’s suggests that the structure and type of eating in society may have changed (ubiquitous fast food restaurants, constant eating-out, drive-thrus), thus making obesity less of personal problem.
v Externalities affect the health care and insurance markets
o The increase in diseases for which obesity is a risk-factor increase health care and insurance costs.
§ Such costs are borne not only by obese people (higher cost of insurance and more health care), but also by the state, which incurs costs in every area of state-supported health care and non-obese people (higher insurance premiums).
v Imperfect information is a problem in the fast-food and chain-restaurant markets
o Nutritional information
§ People may not be aware of the nutritional content of restaurant food, especially for “low-fat” but high calorie foods.
· Children are especially vulnerable
· Fast-food restaurants will argue that risks related to fast-food consumption are obvious – that may be true, but not for more subtle menu choices, such as salads with fatty dressings.
o Health risk information
§ People may not correctly evaluate the health risks of obesity, believing obesity to be a cosmetic issue only.
· Most media portrayal focuses on attractiveness.
§ Obese people may be unable to accurately estimate the probability that they are at an increased risk for disease, especially with the latency period from obesity to onset of disease.
v Fast-food and chain restaurants will argue that state intervention interferes with individual choice
o Poorer individuals may not be “freely” choosing to eat high calorie foods but may be doing so out of economic necessity – high calorie foods are cheaper than low-calorie foods.
§ McDonald’s salads are more expensive than Big Macs
o State regulation can (and should) focus on incentives for getting people to eat healthier, not on actually imposing a particular diet on an individual.
2. HOWEVER, THE PROPER VEHICLE FOR STATE INTERVENTION IS NOT THROUGH EXTENSIVE REGULATION OF FAST-FOOD RESTAURANTS
v Fast-food restaurants should only be required to correct specific informational deficiencies
o Eliminate misleading advertising (“low-fat” but high calorie)
o Require nutritional information to be available, but don’t require additions to menu boards
§ Since evidence suggests people may ignore nutritional information, changing menu boards may not be worth the cost to the restaurants.
v State must develop an advertising campaign to help people understand the health risks of obesity.
o Require fast-food and chain restaurants to contribute to the campaign.
v Require schools to teach children about nutrition
o Subsidized low-calorie lunches
[3]
v Regulation of unhealthy foods is needed to improve citizens’ health and lower costs
§ Unhealthy, caloric restaurant foods pose serious health risks to citizens.
¨ Daily, almost 1 in 4 American adults visit a fast food restaurant, where they may consume all of their required calories for the day.
¨ Twice as many American children are overweight than in 1980. Over half of American adults are overweight.
¨ Being obese at age 20 can reduce life by 20 years, being fat at 40 can reduce life expectancy by three years. Americans die at the rate of 300,000 per year from disease associated with overweight.
§ Health problems associated with overweight impose great costs.
¨ Obesity costs America $117 billion per year.
¨ Surgeon General predicted that obesity costs could equal smoking costs
v The State should mandate nutritional information in restaurants.
§ Some consumers are unaware of the full health hazards of certain foods.
¨ Why only retail food labeling? Nearly half of American meals are from restaurants.
¨ Counterargument: common sense tells people what’s healthy:
-Some information is not determinable through common sense (chicken nuggets = twice the fat of a hamburger).
-Children are not fully “commonsensical”
§ Labeling could preempt litigation
¨ Judge Sweet (SDNY) held that no liability possible if consumers have full information
¨ If labeling is not in place, lawsuits against restaurants could multiply.
-Huge costs to businesses
-High State administrative costs
¨ Recent Lawsuit trend necessitates that the State place high priority on this issue
§ Regulation will demonstrate that the State acknowledges unhealthy food, obesity, as social problems.
¨ Will increase citizen awareness, encourage healthier choices.
¨ Could encourage restaurants to offer healthier alternatives.
§ Counterargument: labeling would be too costly for restaurants.
¨ Much cheaper than litigation
¨ Retail labeling has been feasible
v The State should restrict sugar and fat in schools and mandate nutrition classes
§ Healthy eating is especially important for children and adolescents.
¨ People establish nutrition habits early.
¨ Early overweight poses large health risks.
-Early-onset diabetes, high blood pressure
-Reduced life span
§ Schools’ emphasis on nutrition would send a message that healthy eating is important.
¨ Sugar and candy in vending machines, and unhealthy lunches, currently send the opposite message
¨ Such emphasis, paired with nutrition classes, could carry over afterschool: kids will pay attention to retail and restaurant labels, making more health-informed choices.
§ Counterarguments and responses
¨ Food retailers will lose money: soft drink and snack manufacturers should not feel entitled to the public school market.
¨ Parents should do the work of monitoring and educating their kids about food: children are also exposed to much advertising, and many have many chances, away from parents, to make poor food choices.
¨ Other states have been unsuccessful in passing similar legislation: the current attention on fast food litigation and overweight studies should lend support to these measures.
[4]
To: Attorney General
From: Policy Analyst
Internal Policy Memo: Should obesity be treated as a legal question with restaurants and fast food chains?
I. Obesity SHOULD NOT be treated as a legal question as long as consumers:
a) Exercise free choice
§ They possess cost-effective and realistic options for eating healthy food
b) Possess appropriate knowledge (personal responsibility)
§ If consumers reasonably know the potential ill effects of the food they eat, they cannot blame restaurants
· The law should not protect consumers from their own excesses if the consequences are well known
· E.g, it is common knowledge that burgers, fries, and other fast food products have high levels of fat, cholesterol, salt
c) Allowing legal action under circumstances of free choice and sufficient knowledge would open the floodgates to frivolous law suits and regulation
§ We have a duty to limit legal consequences of wrongs to a controllable degree and to protect against crushing liability
§ If restaurants were held liable for the faults of consumers, it could serve as an incentive for consumers to eat in greater excess and have less regard for their health (moral hazard)
II) Obesity SHOULD BE treated as a legal question when consumers:
a) Cannot exercise free choice
§ Cost effective and realistic options are not available (eg, you live in a neighborhood where fast food is prevalent and available healthy food is too expensive)
b) Possess insufficient knowledge
§ Restaurants and fast food chains possess information about a potential danger that they do not share with consumers
· their products are so unhealthy they are outside the reasonable contemplation of the consuming public
III) Solutions:
a) Require labeling
§ Information deficiencies are more serious in cases of long-term diseases such as obesity than discrete injuries
§ Labeling should be simple, with only information on calories consumed and other relevant data
· Too much information can blind consumers
b) Raise public awareness about the importance of eating healthy food as well as exercising
c) Increase accessibility to healthy food restaurants
§ Since an increasing majority of people eat at restaurants and fast food chains it is essential to provide incentives, such as subsidies, to businesses willing to open inexpensive health restaurants and fast food health chains in underrepresented markets
d) Cost Benefit Analysis
§ We have to be aware of the increased transaction and administrative costs of the above mentioned interventions
§ However, the benefits of this limited intervention to society far exceed its costs given obesity’s large external costs
o 2 in 3 American adults are classified as overweight or obese
§ Obese individuals have a 50 to 100 percent increased risk of premature death from coronary heart disease, diabetes, cancer and other medical conditions
o in 2000 the cost of obesity was estimated to be US$117 billion
§ The market fails to adequately address these costs since they are not directly paid by those who create them
A combined approach requiring labeling, increased awareness, and greater accessibility could serve to motivate both consumers and current restaurants and fast food chains to seek healthier alternatives; thereby lessening the costs to society in the long run while vastly improving non-monetizable elements, such as happiness
[5]
I. The state should take action to address obesity.
· Obesity is a major health problem which deserves prominent placement on the public agenda.
o Obesity will soon become the nation’s leading preventable cause of death, causing over 280,000 deaths annually. It also has significant effects on morbidity and persons’ quality of life.
o Health risks and complications in crease as people age. Because most people have difficulty processing future concerns, the state should facilitate proper long term health planning.
o Since habits learned early in life are difficult to change later, it is important to encourage proper nutrition for young people.
· Without state involvement, this problem will not be comprehensively solved.
o Market action will not solve the problem of limited information regarding the nutritional content of food in restaurants.
§ Businesses lack market incentives to accurately provide easily decipherable information.
§ Consumers make more responsible health-conscious choices when nutritional information is presented on the menu.
§ The market also does not provide consumers with an understanding of the need for healthy eating and nutritional planning.
o Private litigation has weaknesses that government involvement does not.
§ Litigation only affects businesses facing suit and will not set uniform rules.
§ Litigation cannot address other important social factors, like the need for nutritional education.
§ Litigation is costly and time-consuming, which may deter persons from pursuing actions.
II. Requiring menu labeling for calories and fat content achieves significant immediate benefits with relatively few costs.
· Better menu labeling facilitates responsible free choice by providing information at the point of sale.
· Labeling imposes low costs on businesses. The health information already exists—it only needs better placement.
· Labeling may not encounter as much resistance from business groups as other options. Businesses can adapt to the requirements and encourage customer to purchase their healthier items.
· Labeling is more cost-efficient than other regulatory options. It does require some oversight, but health information should be relatively easy to acquire and placement requirements are easy to check.
III. Increased nutrition education, while more expensive, is an important policy to pursue in the long run that will both enhance the benefits of improved labeling and independently fight obesity.
· Increased education enhances the value of labeling by teaching people about proper nutrition, so that they can use the information to plan their meals more effectively.
· Education encourages young people to take better care of their health by developing healthy eating habits. It also informs them of the health consequences that come from obesity, increasing their incentives to be healthy.
· Education is a less feasible option than labeling because the costs are higher.
o Implementation will require a decision between developing statewide standards or leave them to local communities.
§ State-developed standards might be resisted by local communities and would require greater state administrative costs. Development of these standards would be a politically divisive issue.
§ Local standards would be less comprehensive and more subject to local pressures.
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