Does regulatory backlash explain the midterm elections?

On the front page of the NYT this morning

Mr. Obama, having just cut a painful deal with Republicans intended to stimulate the economy, can ill afford to be seen as simultaneously throttling the fragile recovery by imposing a sheaf of expensive new environmental regulations that critics say will cost jobs.

The delays represent a marked departure from the first two years of the Obama presidency, when the E.P.A. moved quickly to reverse one Bush environmental policy after another. Administration officials now face the question of whether in their zeal to undo the Bush agenda they reached too far and provoked an unmanageable political backlash.

Finally! The light dawns. As I showed in my recent PPI policy memo, the regulatory burden actually rose under George Bush, with most but not all of the increase concentrated in homeland security. The Obama Administration then ladled another hefty layer of regulation on top of the Bush regulatory burden. Let me reproduce a chart from the memo.

The problem is that adding more regulations in a period of weak economic and job growth is precisely the wrong thing to do, and people know it in their hearts. If Obama really wants to support jobs and innovation now, he can’t be regulating willy-nilly.

That suggests the correct middle ground is pro-growth, pro-fairness, and sane regulation.

Comments

  1. Horse hockey. Just like taxes, some people never saw a tax cut they didn’t like. So it is with regulation. They never saw a rollback of regulation they didn’t like. The %s you are talkign about as an increase in the burden are miniscule. They aren’t fundamentally impacting most businesses, who already have levels of inefficiency that far dwarf these numbers. Its a complete red herring from people who just don’t want anyone lookign over their shoulders. Lack of regulation, and most importantly lack of enforcement of regulation that exists, cost us Enron, Worldcom, Global Crossing, the financial metldown and just about every other financial disaster of the last 20 years. Environmental regulation has stopped just about every major case of pollution in this country for decades. So, you analysis simply looks at the cost side of the ledger, and not the savings – or the cost of not having regulated and disasters having been avoided. Weak, very weak.

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