The Obama Watch

Getting Serious About Regulations — NOT!

Who does our president take us for?

By 2.2.11

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In a piece in the Wall Street Journal, President Obama has written that he wants to ensure that federal regulations "protect our safety, health, and environment while promoting economic growth." He made a similar claim in his State of the Union address.

Before anyone starts calling him the "deregulation president," it's worth taking a closer look at his piece. Hidden in the fluff, of course, is a lot of nonsense -- even points he must think are nonsense. Like: "…we have, from time to time, embraced common sense rules of the road…" Only "from time to time," Mr. President? You are so right!

How about this: "Over the past two years, the goal of my administration has been to strike the right balance" -- the right balance, that is, between "placing unreasonable burdens on business -- burdens that have stifled innovation and have had a chilling effect on growth and jobs" and "meet[ing] our basic responsibility to protect the public interest."

What does he take us for? The past two years have been a time of unrelenting regulating without any attempt whatsoever to strike a balance, let alone "the right balance."

Mr. Obama says he is ordering a government-wide review of the rules already on the books. Really? On December 31, 2010, the Federal Register, where those rules are hiding in plain sight, was 82,589 pages long. Raise your hand if you really think Mr. Obama's people are going to review a significant portion of them.

"Where necessary," he writes, "we won't shy away from addressing obvious gaps . . ." including "efforts to target chronic violators of workplace safety laws."

In a piece here last week, I referred to a CATO Institute graph of workplace fatalities that indicates that the Occupational Safety and Health Administration (OSHA) has had no effect at all during its forty years of existence. Anyone who points to OSHA as a success story is either ignorant, not serious, or being deceptive (the reactions to Tucson caution against stronger language for a time).

Mr. Obama says he wants "disclosure as a tool to inform consumers of their choices, rather than restricting those choices." What is that all about? One thing consumers are capable of doing is demanding information -- when they want it. If companies discover consumers want information, they'll provide it. That's one way companies compete. What we have now is TMI -- too much information -- required by: guess who.

"[F]inally," Mr. Obama writes, "I am directing federal agencies to do more to account for -- and reduce -- the burdens regulations may place on small businesses."

Certainly the cost of regulations to small businesses is a lot greater proportionally than it is to big businesses. According to Nicole V. Crain and W. Mark Crain, businesses "with fewer than 20 employees incur regulatory costs 42 percent greater than firms with between 20 and 499 employees, and 36 percent greater than firms with more than 500 employees." In addition, some of the legislation, e.g., the Americans with Disabilities Act, hurts precisely the people it is intended to help (surprise!).

Toward the end of his piece, Mr. Obama writes, "Despite a lot of heated rhetoric, our efforts over the past two years to modernize our regulations have led to smarter -- and in some cases tougher -- rules… Yet according to current estimates of their economic impact, the benefits of these regulations exceed their costs by billions of dollars."

You have to smile.

Here are three actions the president could have taken if he were serious:

1. Propose the elimination of one major regulatory agency. OSHA would be a good place to begin. Meddling by OSHA is estimated to cost around $65 billion a year, and has been completely useless. Small businesses would applaud.

2. Propose that all regulations that impose their requirements on businesses with fifteen or more employees be amended wholesale to affect only businesses with fifty or more employees -- the threshold, not incidentally, for ObamaCare. If fifty is good enough for socialized medicine (sorry, Tucson, time's up) it ought to be good enough for all other regulations. A hundred would be better. But Rome wasn't burned in a day.

3. Appoint a panel of experts, all skeptics of regulation, to estimate the real cost of regulations. The government's estimates are just what you'd expect from… government. Nicole V. Crain and W. Mark Crain estimate the cost to be at least $1.75 trillion, or 14 percent of U.S. national income. By comparison, the income-tax burden is about $2.3 trillion. If people could wave the real figures at their congressional representatives, we might get real reform.

A good post-Tea-Party-election guess is that all three of these things will happen in the next ten years. A better guess is that they won't happen on this president's watch.

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About the Author

Daniel Oliver is a Senior Director of White House Writers Group in Washington, D.C. He served as Chairman of the Federal Trade Commission under President Ronald Reagan.