Daily Archives: June 19, 2013
Here are today’s statistics on the state of the economy:
The MBA reports that mortgage applications fell -3.3% last week, with purchases down 3.0% and re-fis down 3.0%.
The FOMC says that interest rates will remain unchanged for the present, but warns that the current easy money regime is coming to and end, or at least slowing. The Committee envisions a slowdown in the current round of Quantitative easing by the end of the year.
Niall Ferguson has a piece in the Wall Street Journal which talks about the growth of regulation within the nation. He starts with a quote from de Tocqueville in which de Tocqueville marvels at how Americans manage to self-regulate through associations. He then notes that de Tocqueville wouldn’t recognize the US if he were to suddenly come back. It looks too much like Europe.
Regulation has crept in to help smother us all the while the culture has changed to where Americans seem to no longer look to each other to solve problems, but instead look to government.
Regulations are simply a symptom of this business and autonomy killing movement. And their growth track pretty well with our demise:
As the Competitive Enterprise Institute’s Clyde Wayne Crews shows in his invaluable annual survey of the federal regulatory state, we have become the regulation nation almost imperceptibly. Excluding blank pages, the 2012 Federal Register—the official directory of regulation—today runs to 78,961 pages. Back in 1986 it was 44,812 pages. In 1936 it was just 2,620.
True, our economy today is much larger than it was in 1936—around 12 times larger, allowing for inflation. But the Federal Register has grown by a factor of 30 in the same period.
The last time regulation was cut was under Ronald Reagan, when the number of pages in the Federal Register fell by 31%. Surprise: Real GDP grew by 30% in that same period. But Leviathan’s diet lasted just eight years. Since 1993, 81,883 new rules have been issued. In the past 10 years, the “final rules” issued by our 63 federal departments, agencies and commissions have outnumbered laws passed by Congress 223 to 1.
Right now there are 4,062 new regulations at various stages of implementation, of which 224 are deemed “economically significant,” i.e., their economic impact will exceed $100 million.
The cost of all this, Mr. Crews estimates, is $1.8 trillion annually—that’s on top of the federal government’s $3.5 trillion in outlays, so it is equivalent to an invisible 65% surcharge on your federal taxes, or nearly 12% of GDP. Especially invidious is the fact that the costs of regulation for small businesses (those with fewer than 20 employees) are 36% higher per employee than they are for bigger firms.
Got that? 224 new regulations which will have an economic impact that will “exceed $100 million” dollars. Negatively of course. That was the purpose of having regulations rated like that – to understand the probable negative economic impact. And we have 224 in the hopper, in a very down economy, which will exceed the negative $100 million dollar mark. What are those people thinking? Or are they? Indications are they give it no thought when these new regulations are proffered. They just note the cost and move on. No skin of their rear ends.
And if you think that’s bad, just wait:
Next year’s big treat will be the implementation of the Affordable Care Act, something every small business in the country must be looking forward to with eager anticipation. Then, as Sen. Rob Portman (R., Ohio) warned readers on this page 10 months ago, there’s also the Labor Department’s new fiduciary rule, which will increase the cost of retirement planning for middle-class workers; the EPA’s new Ozone Rule, which will impose up to $90 billion in yearly costs on American manufacturers; and the Department of Transportation’s Rear-View Camera Rule. That’s so you never have to turn your head around when backing up.
Yes, that’s right, they’re hardly done. In fact, they’re not even slowing down. The accumulation of power within the central government – the ability to intrude in almost every aspect of your life – is attempting to reach warp speed.
Finally, as if what I’ve noted isn’t enough, we have another costly travesty in the gestation stage, i.e. the “Gang of 8’s” immigration bill. From PowerLine:
The CBO confirms that the bill provides for a vast influx of new, legal immigration. The Senate Budget Committee says:
CBO projects 16 million new immigrants will be added by 2033 on top of the current law projected flow of 22 million and that 8 million illegal immigrants will be granted permanent status – for a total of 46 million legal immigrants, including a doubling of guest workers to 1.6 million in a single year.
Contrary to the claims of the bill’s sponsors, this influx will be overwhelmingly low-skilled. The CBO says:
[T]he new workers would be less skilled and have lower wages, on average, than the labor force under current law.
The result is that unemployment will increase, and wages will be driven down, for America’s existing blue collar work force:
Taking into account all of those flows of new immigrants, CBO and JCT expect that a greater number of immigrants with lower skills than with higher skills would be added to the workforce, slightly pushing down the average wage for the labor force as a whole… However, CBO and JCT expect that currently unauthorized workers who would obtain legal status under S. 744 would see an increase in their average wages.
Terrific: the only ones who would gain would be those who came here illegally, while native born workers would suffer. The CBO report continues:
[T]he average wage would be lower than under current law over the first dozen years. … CBO estimates that S. 744 would cause the unemployment rate to increase slightly between 2014 and 2020.
Ruinous? Along with everything else, pretty much.
To say America has lost it’s way is, well, an understatement. We aren’t close to being what was envisioned at our founding and we’re almost kissing cousins of that which our Founders attempted to keep us from becoming – today’s Europe.
Unfortunately, that ruinous drift and over reliance on government seems to be fine for all too many of those who call themselves Americans today.