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Ohio News-Herald

 

Is 'Regularity Uncertainty' Holding Back the Economy?

October 23, 2011

By Ben Boychuk

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With the United States economy growing slowly, and the unemployment rate stuck at over 9 percent, Republicans have frequently charged that President Barack Obama’s move to enact and enforce a variety of regulations is stifling the economy — heaping scorn on everything from the new Dodd-Frank law regulating the financial sector to the administration’s expanded hiring of inspectors for the Occupational Safety and Health Administration. Is the federal government creating too many burdens for business, big and small? Joel Mathis and Ben Boychuk, the RedBlueAmerica columnists, debate the issue:

Regulations aren’t the problem; real issue is Americans aren’t buying stuff

Let’s be honest: “Regulatory uncertainty” is a euphemism for “regulations.” Businesses — and their mostly Republican allies — don’t want them.

We have regulations for a reason. The Dodd-Frank law passed because the financial industry proved it couldn’t police itself and nearly destroyed the American economy. Richard Nixon created OSHA at a time when 14,000 employees were dying in the workplace every year; that number dropped 60 percent over the next 30 years. Left to their own devices, businesses often cut corners, resulting in financial and even physical harm to the rest of us.

Overregulation can stifle the economy. The Obama administration recognizes this — and in August announced a reform effort to reduce regulatory burdens on business by $10 billion a year, mostly by streamlining required health, labor and tax paperwork. Obama even alienated environmentalist supporters this fall by delaying new EPA ozone standards to save jobs.

The problem isn’t regulatory uncertainty. The Economic Policy Institute in September reported that weekly hours for still-employed workers are still down from their last high in August 2007.

If businesses wanted to produce more widgets — but wanted to avoid the federal paperwork that goes with hiring more widget-making workers — they’d increase the number of hours their existing employees are working. They aren’t. That suggests that the problem is demand: Americans aren’t buying stuff.

Why? They’re digging themselves out of debt — often in the form of mortgages that are now worth more than the houses those mortgages bought. Until that issue is adequately addressed, or until those mortgages are finally paid off over the next 30 years, America will continue to have a problem with demand.

“Regulatory uncertainty” offers a handy political club to use against Obama, though. The GOP, it seems, would rather win the presidential campaign with stale untruths rather than address our real problems.

Nobody is saying eliminate all the rules, but things are out of hand

Red tape squeezes businesses and consumers in a tight and highly uncertain economy. But “regulatory uncertainty” alone is not the problem.

Worse than “regulatory uncertainty” — what a ghastly term! — is the certainty that proposed and existing rules will erode the bottom line of businesses, especially smaller enterprises that operate on tight margins.

What’s more certain still is the Obama administration has nearly 4,300 new rules on tap this year, covering every conceivable aspect of American economic life. At least 219 of those will cost businesses — and therefore all of us — $100 million or more. And all of that would come on top of the $1.7 trillion in compliance costs businesses endured in 2010, according to a Competitive Enterprise Institute study.

The regulatory fervor is so out of hand, Environmental Protection Agency officials have had to assure Congress the agency is not planning to impose new rules on farm dust. Not this year, anyway. But several major new rules under consideration by the EPA would cost at least $90 billion, and could idle hundreds of truckers and factories across the country.

What’s the remedy? Anytime the subject of merely easing regulation comes up, somebody will snark, “You just want unpaid child laborers to sever their arms with bandsaws!” A more typical specimen of this strawman appeared a few weeks ago at Forbes.com: “Does anyone really want to do away with clean air and water standards just so big companies can save money by polluting?”

Well, no. Nobody is suggesting we return to the bad old days of the 1970s. Nobody. The better question is whether anyone thinks it’s a good idea to spend billions or even trillions of dollars to reduce certain microscopic particles in the air by a few parts per million.

As the economy struggles to recover and official unemployment remains stuck around 9.1 percent, it’s a certainty that more rules and full employment for compliance officers won’t save us.

Original Source: http://www.news-herald.com/articles/2011/10/23/opinion/doc4ea48a5d72525639109390.txt

 

 
 
 

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