Free Markets, Free People
Remember the hot air Obama has given regulatory reform?
In January 2010, he announced a government-wide review of federal regulations to restore "balance" by eliminating those "that stifle job creation and make our economy less competitive." He emphasized that concept again in his 2011 State of the Union speech, referring to "rules that put an unnecessary burden on businesses."
Of course that was all said to deflect a growing belief that his administration was anti-business. Politically, that was unacceptable. So, as usual, he said the appropriate things, things that would help sooth the business community and others who believed that about his administration.
Meanwhile, other than a few fairly insignificant regulations that may have been removed, his administration was piling on new regulations at an unprecedented rate. The Heritage Foundation has put it in a chart for simplicity’s sake:
Heritage issues this disclaimer:
Excessive regulation, of course, cannot be blamed on the White House alone. A great many of the rules and regulations imposed each year are mandated by Congress, and many others are made possible by intentionally ambiguous statutory language. Others are promulgated by so-called independent agencies not subject to White House control (although they are run by presidential appointees). Regardless of responsibility, the result is the same: more burdens for Americans and the U.S. economy.
A reminder for all that for the first two years when most of these regulations were passed into law, Obama enjoyed a Democratic majority in both houses of Congress.
And, huge surprise here, even more regulation is in the pipeline:
The most recent Unified Agenda (also known as the Semiannual Regulatory Agenda)—a bi-annual compendium of planned regulatory actions as reported by agencies lists 2,576 rules (proposed and final) in the pipeline. The largest proportion—505 rulemakings—is from the Treasury Department, the SEC, and the Commodity Futures Trading Commission—all tasked with issuing hundreds of rules under the massive Dodd–Frank statute. The Environmental Protection Agency is responsible for 174 others, while 133 are from the Department of Health and Human Services, reflecting, in part, the regulatory requirements of Obamacare.
Of the 2,576 pending rulemakings in the fall 2011 agenda, 133 are classified as “economically significant.” With each of these expected to cost at least $100 million annually, they represent a total additional burden of at least $13.3 billion every year.
So pardon me for giving whatever this President says a health eye roll of skepticism. He’s not serious about what he says when it comes to regulation and the actions that have taken place under this administration, strictly on the executive side of things, says he’s actually quite fine with increased regulation, regardless of the impact on business.
Bottom line: he remains as most have perceived him to be – anti-business. He continues to be at the head of an administration that does indeed “stifle job creation and make our economy less competitive” through over-regulation.
His deeds belie his words.
And yes, if you’re wondering, I’m being highly facetious with the title.
But that’s the growing consensus among our political leadership – at least that brand of it which believes such taxes are actually paid by the institutions themselves. And you have to love the reasoning:
The U.S. and European governments are moving toward a consensus on taxing large banks to cover the cost of any future bailouts rather than asking taxpayers to foot the bill, as happened regularly in past banking crises.
The tax proposals vary. Germany and Sweden would use the money to fund a “resolution authority” that would use the money to shut troubled banks whose failure would put the broader economy at risk. Others, such as France, would assess the fee after a crisis passed.
What’s wrong with that, you say? Well anyone – if you’re going to be bailed out and you know it, where the aversion to risk come from? Why not play with other people’s money a little more if there’s no death penalty for doing so? If you are a assured a fail-safe position, why not go for broke?
It seems to provide a perverse incentive to do exactly what you don’t want to see happen.
Our leadership is split on how they should approach it. I bet it doesn’t take you much time to figure out what part of the leadership sides with France’s concept and which would like to see an ongoing tax fund. You’re right, the administration wants to see assessments made after the fact and the Congress prefers a slush fund they can plunder an ongoing fund established (Unsurprisingly Ezra Klein of juicebox mafia fame finds this the most satisfying solution of the two).
Either way, it’s going to cost you money.
And instead of leaving the banks with the threat of punishment by the market for stupid risks (failure), they’ll collect money from you in the form of higher fees and other costs and pass them on to the government so it can subsidize their bad behavior and then wonder why its regulations didn’t work.
Oh, wait, we’ve already wondered about that, haven’t we? I know, let’s make even more regulations.
The core problem? It, like health care, remains unaddressed.