Saturday, February 18, 2012

Is America Over-Regulated? Are You Kidding?

February 18, 2012 - "The home of laissez-faire," says The Economist magazine, "is being suffocated by excessive and badly written regulation."

This comes as no surprise to those of us paying attention, of course. In an article titled "Over-regulated America" in their February 18 print edition, the British publication examines the problems of too many laws for too many things for too many stupid reasons. The article highlights examples such as the over-sold Dodd-Frank bill, which even uber-liberal George Soros said was "lobbied into inconsistency and incomprehensibility by special interests."

Some excerpts from The Economist article:
  • Dodd-Frank law of 2010.... Dodd-Frank is far too complex, and becoming more so. At 848 pages, it is 23 times longer than Glass-Steagall, the reform that followed the Wall Street crash of 1929. Worse, every other page demands that regulators fill in further detail. Some of these clarifications are hundreds of pages long. Just one bit, the “Volcker rule”, which aims to curb risky proprietary trading by banks, includes 383 questions that break down into 1,420 subquestions.
  • A Florida law requires vending-machine labels to urge the public to file a report if the label is not there.
  • A proposed code for nurseries in Colorado that specifies how many crayons each box must contain.
  • The Federal Railroad Administration insists that all trains must be painted with an “F” at the front, so you can tell which end is which. 
  • Bureaucratic busybodies in Bethesda, Maryland, have shut down children’s lemonade stands because the enterprising young moppets did not have trading licences. 
Cover of The Economist, Feb. 18, 2012
The problem, says The Economist, "is not the rules that are self-evidently absurd. It is the ones that sound reasonable on their own but impose a huge burden collectively. America is meant to be the home of laissez-faire....Americans are supposed to be free to choose, for better or for worse. Yet for some time America has been straying from this ideal."

Barack Obama and his administration have certainly contributed to the over-regulation of America, but that process was already well under way by the time Our Glorious Leader was born (wherever that may have been).

Some of you may doubt that regulation has exploded under Obama. Perhaps you believed the blatant lie he told during his State of the Union Address, on Jan. 24, 2012, in which he claimed to have issued fewer regulations in the first three years of his Administration than did George W. Bush.

If you believe that lie, or simply wondered about its veracity, you need to read a February 15 report from Job Creators Alliance (JCA) that cites an analysis by the Competitive Enterprise Institute (CEI), which shows some stunning numbers. In its summary of the CEI analysis, JCA wrote, "953 economically significant final rules were issued in the first three years of the Obama Administration, compared to just 30 in the first three years of the Bush Administration – more than a thirty-fold increase. In fact, in 2009, the first year of President Obama’s Administration nearly as many economically significant final rules were issued (163) as were issued in the entire eight years of the Bush Administration (179)."

Stunning, right? JCA's conclusion: "The Obama Administration has greatly expanded the impact of the regulatory state on job creators and the economy – more than Clinton, more than Bush, and perhaps more than any Administration in history." (Emphasis added.)

The problem is by no means restricted to the Federal government, as noted by several examples cited above from The Economist.

Over-regulation happens at every level of government in the U.S., from the boards and councils of small towns and big cities to county boards to state legislatures, lawmakers often make stupid laws out of a desperate need to appear as though they are earning their often-bloated salaries. That's not the only reason, of course.

"Two forces make American laws too complex," says the Economist. "One is hubris. Many lawmakers seem to believe that they can lay down rules to govern every eventuality."

Surprisingly, The Economist did not use the phrase "nanny state" to describe what's going on here, but that's what this is. When a bureaucrat or elected official deems it necessary to force you to eat less salt or sugar, or when the Chicago City Council purposefully makes legal gun ownership as expensive and restrictive as possible, that's the nanny state committing first-degree over-regulation. Bring up the subject of over-regulation the next time you're talking with a friendly local merchant and, I guarantee, you'll get an earful.

"The other force that makes American laws complex is lobbying," says The Economist. "The government’s drive to micromanage so many activities creates a huge incentive for interest groups to push for special favours. When a bill is hundreds of pages long, it is not hard for congressmen to slip in clauses that benefit their chums and campaign donors. The health-care bill included tons of favours for the pushy. Congress’s last, failed attempt to regulate greenhouse gases was even worse."

The Competitive Enterprise Institute concludes that "Congress needs to be made more accountable for these regulations. The REINS Act [H.R. 10] approach, proposed by Kentuckians Rep. Geoff Davis and Sen. Rand Paul, would have Congress perform at least an expedited vote on all economically significant rules."

Ah, but there's the rub: "Accountability." When you hear somebody say that "Congress needs to be made more accountable," the first question you should ask is, "How? By whom?" It's a bit like asking any legislative body to restrict their own pay raises. They make the rules, and it's rare when any legislative body works against the personal interests of its members. Only they can impose the laws that would make them more accountable, but to do so would spoil the opportunities available for favors, corruption and grandstanding.

Ironically, it would require yet more regulation to regulate those most in need of it. Don't hold your breath.
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