Free Markets, Free People

Obama

Obama: "Hey, Mitt, wouldn’t you rather be a nice loser than a mean winner?"

 

In a patented Instapundit zinger, Glenn sums up Obama’s whining about Romney with four words:

I’LL BET HE DOES: In tough fight with Romney, Obama longs for McCain.

Obama has spent his whole life getting pretty much what he wanted, with token opposition at best. He obviously likes it that way. I suppose if I had lived a charmed life as long as he has, I would also feel entitled to see the charms continue forever.

I’m on record as being no fan of Mitt Romney. I don’t expect to vote for him. I see grave danger that he will end up being the scapegoat of an unprecedented economic meltdown – if it happens on his watch, you can be sure the legacy media journalists and the academic left will work overtime to pin it all on him, and lie through their teeth to minimize the contribution of Democrats and leftists to the problem.

But I do loathe the sanctimonious, smarmy president we have now. Let me translate some of his sanctimony:

It will only be when Mitt Romney is defeated, the president continued, "that the fever may break, because there’s a tradition in the Republican Party of more common sense than that."

“There’s a tradition in the Republican Party of making a good show and then rolling over for the big-government left. Hey, they’re supposed to be more loyal to the rest of the political class, including me, than to those whackjobs that actually vote for them. It’s not fair if they don’t keep doing that.”

"The last time we ran, we had a Republican candidate who — I had some profound disagreements with him, but he acknowledged the need for immigration reform, and acknowledged the need for campaign finance reform, acknowledged the need for policies that would do something about climate change," Obama said. "Now, what we’ve got is not just a nominee but a Congress and a Republican Party that have a fundamentally different vision about where we need to go as a country."

“Come on, Mitt, don’t you want to be a loser like McCain? He understood the kabuki Republicans are supposed to perform. He embraced a whole bunch of leftist positions, but still pretended to be conservative. He knew he wasn’t supposed to really criticize me and my Lightworker persona. Now, I have to run against people who won’t play my game, and insist on setting out some kind of clear choice. That’s not fair.”

At about the same time, the Obama campaign released a web video that also featured McCain nostalgia. "John McCain stood up to the voices of extremism in his party," the video said. "Why won’t Mitt Romney do the same?"

“Why won’t Mitt Romney play the game the way I want? He should be wasting his time on the things I want him to waste time on. See, the whole repudiation thing is a win-win for me. With the help of my comrades in the media, I can keep Romney busy defending the indefensible, and he’ll still come out of it looking bad no matter how much he apologizes or repudiates. Plus, his base gets demoralized. Why won’t he go along with that? Doesn’t he understand that I need him to play the role of the valiant loser who gets a nice compliment in my victory speech? It’s not fair.”

I don’t expect that his whining is going to win over many voters, but what else can he do? His record is dismal in just about every respect you can name. He has to talk about something, and as out of touch as Obama is, even he knows he’d better not talk about unemployment, lack of growth, or troubles in Europe. When he tries to talk about foreign issues, he ends up speaking of the Maldives instead of the Malvinas, or Polish death camps, or whatever. With his speaking record already including 57 states and “corpse-man”, maybe he’s better off if he sticks to generic whining.

The cost of the regulatory state

One of the claims President Obama made in his State of the Union address was that his administration was engaged in cutting the red tape and doing away with regulations that stood in the way of prosperity

There is no question that some regulations are outdated, unnecessary, or too costly. In fact, I’ve approved fewer regulations in the first three years of my presidency than my Republican predecessor did in his. I’ve ordered every federal agency to eliminate rules that don’t make sense. We’ve already announced over 500 reforms, and just a fraction of them will save business and citizens more than $10 billion over the next five years.

Of course, like many of his claims, the devil is in the details and upon closer scrutiny, the claim has no real foundation in fact.

His first claim is a carefully constructed lie as Free Enterprise points out:

The White House admits that its rules have so far cost $25 billion, which is much more than at the same point during the Clinton and George W. Bush administrations.

The claim is also couched in non-specifics for a reason.  The “500 reforms” are mostly regulations with little or no monetary impact on those who have to satisfy them.  However, the administration has added more rules that cross the magic 100 million dollar impact line than any other administration.  And, of course, those require, by law, that the monetary impact be assessed.  Here’s an example of one (PDF, pg 69):

Enforcement Fairness Act (5 U.S.C. 801 et seq.). This interim final rule:

a. Will have an annual effect on the economy of $100 million or more. This rule will affect every new well on the OCS, and every operator, both large and small must meet the same criteria for well construction regardless of company size. This rulemaking may have a significant economic effect on a substantial number of small entities and the impact on small businesses will be analyzed more thoroughly in an Initial Regulatory Flexibility Analysis. While large companies will bear the majority of these costs, small companies as both leaseholders and contractors supporting OCS drilling operations will be affected.

Considering the new requirements for redundant barriers and new tests, we estimate that this rulemaking will add an average of about $1.42 million to each new deepwater well drilled and completed with a MODU, $170 thousand for each new deepwater well drilled with a platform rig, and $90 thousand for each new shallow water well. While not an insignificant amount, we note this extra recurring cost is less than 2 percent of the cost of drilling a well in deepwater and around 1 percent for most shallow water wells.

b. Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions. The impact on domestic deepwater hydrocarbon production as a result of these regulations is expected to be negative, but the size of the impact is not expected to materially impact the world oil markets. The deepwater GOM is an oil province and the domestic crude oil prices are set by the world oil markets. Currently there is sufficient spare capacity in OPEC to offset a decrease in GOM deepwater production that could occur as a result of this rule.

Therefore, the increase in the price of hydrocarbon products to consumers from the increased cost to drill and operate on the OCS is expected to be minimal. However, more of the oil for domestic consumption may be purchased from overseas markets because the cost of OCS oil and gas production will rise relative to other sources of supply. This shift would contribute negatively to our balance of trade.

These rules were proposed in the wake of the BP oil spill in the Gulf of Mexico (GOM).  They clearly identify the effect of the rules. Ironically they include increased cost to consumers, more dependence on foreign oil, and a negative increase in the balance of trade – all problems the administration and most economists identify is problems to be solved if the economy is to move forward.

Now, some may argue that these rules were necessary.  I’d argue that perhaps some new regulation was necessary, but it should have been a regulation which, to the best of its ability, mitigated the effects listed to the minimum, or eliminated them altogether.  Instead, the regulators airily note the effects and then blow them off.  In reality, regulators really don’t care if it costs consumers more, deepens our dependence on foreign oil or ups the balance of trade.

In the State of the Union address, Obama tried to grab the middle and pretend he is a friend to small business:

You see, an economy built to last is one where we encourage the talent and ingenuity of every person in this country.  That means women should earn equal pay for equal work.  (Applause.)  It means we should support everyone who’s willing to work, and every risk-taker and entrepreneur who aspires to become the next Steve Jobs. 

After all, innovation is what America has always been about.  Most new jobs are created in start-ups and small businesses.  So let’s pass an agenda that helps them succeed.  Tear down regulations that prevent aspiring entrepreneurs from getting the financing to grow.  (Applause.)  Expand tax relief to small businesses that are raising wages and creating good jobs.  Both parties agree on these ideas.  So put them in a bill, and get it on my desk this year.  (Applause.)

But again facts undermine the claim.  As the Small Business Association reports, regulations disproportionately effect small businesses:

In the face of yet higher costs of federal regulations, the research shows that small businesses continue to bear a disproportionate share of the federal regulatory burden. The findings are consistent with those in Hopkins (1995), Crain and Hopkins (2001), and Crain (2005).

The research finds that the total costs of federal regulations have further increased from the level established in the 2005 study, as have the costs per employee. More specifically, the total cost of federal regulations has increased to $1.75 trillion, while the updated cost per employee for firms with fewer than 20 employees is now $10,585 (a 36 percent difference between the costs incurred by small firms when compared with their larger counterparts).

Say one thing while doing the opposite.  Vintage Obama.  Tomorrow’s Steve Jobs would have a very expensive uphill climb in today’s regulatory climate.  The net effect? $1.75 trillion dollars of cost to small businesses, the place where “most jobs are created” per Obama.

The SBA also reports:

Environmental regulations appear to be the main cost drivers in determining the severity of the disproportionate impact on small firms. Compliance with environmental regulations costs 364 percent more in small firms than in large firms. The cost of tax compliance is 206 percent higher in small firms than the cost in large firms.

Those regulations are primarily driven by OSHA and EPA.  And there’s no secret  about the expansion of both regulators and regulation being pushed by Obama’s EPA focused on the environment.

The “good” news, however, this is one “shovel ready” project that seems to be creating jobs:

Large, small, global and regional — law firms are opening Washington offices at a rate not seen since before the recession, as they position themselves for work centered around the capital’s regulatory machinery.

Yes, I was being very facetious, however, when sharks smell blood in the water, they tend to gather in large numbers in anticipation of a feeding frenzy.  Despite Obama’s claims to the contrary, there’s a reason this is happening, and it isn’t because the administration is lessening or cutting regulations, it is because it is imposing more and needs additional legal enforcement help (there’s also the side that will concentrate on defense). 

Don’t forget, the $1.75 trillion dollar cost above applies to only small business.  That means that the total cost of regulation is much higher than that.  Also don’t forget, when Obama makes his claim about not passing as many regulations as previous administrations, that’s meaningless without an dollar effect numbers.  As noted, in regulatory cost to the economy, he’s passed many more costly regulations at this point in his presidency than did the previous administration.

The bottom line, of course, is that A) you can’t believe a thing the man says and B) contrary to his claims, he’s imposed more cost on the economy via regulation, not less. 

Finally, if you think it is bad now, wait until ObamaCare kicks in.  One of the reasons law firms are beefing up their Washington DC presence is in anticipation of that law going into effect.  If you think it’s a regulatory nightmare now, just wait.  It’s going to get worse.

Sean Hackbarth, commenting on the increase in lawyers:

Resources spent on paperwork and re-jiggering business plans is less money going to business investment and job creation, but at least we know someone is benefiting from the regulatory pile-on.

Shovel-ready – and not in the good sense.

~McQ

Twitter: @McQandO

Observations: The QandO Podcast for 13 Oct 11

In this podcast, Bruce Michael, and Dale discuss Obama’s “Americans are lazy” comment, the failing EU. and the presidential race.

The direct link to the podcast can be found here.

Observations

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Observations: The QandO Podcast for 30 Oct 11

In this podcast, Bruce Michael, and Dale discuss college loans and baseball.

The direct link to the podcast can be found here.

Observations

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2010, they can be accessed through the RSS Archive Feed.

Observations: The QandO Podcast for 10 Jul 11

In this podcast, Bruce, Michael, and Dale discuss the L.A. Counties harrassment of desert dwellers, and the ongoing budget negotiations.

The direct link to the podcast can be found here.

Observations

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2010, they can be accessed through the RSS Archive Feed.

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Observations: The QandO Podcast for 15 May 11

In this podcast, Bruce, Michael, and Dale discuss the Indiana Supreme Court’s Ruling on the 4th Amendment, and this week’s political stories.

The direct link to the podcast can be found here.

Observations

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2010, they can be accessed through the RSS Archive Feed.

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Observations: The QandO Podcast for 17 Apr 11

In this podcast, Bruce, Michael, and Dale discuss this week’s battles over the budget.

The direct link to the podcast can be found here.

Observations

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2010, they can be accessed through the RSS Archive Feed.

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Observations: The QandO Podcast for 13 Mar 11

In this podcast, Bruce, Michael, and Dale discuss the Japanese earthquake and the implications for US nuclear policy, and Pres Obaba’s leadership style.

The direct link to the podcast can be found here.

Observations

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2010, they can be accessed through the RSS Archive Feed.

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