ARE THE REGULATORY BURDENS WE PUT ON BUSINESSES WORTH IT?By PETER ROFF
April 06, 2023
Biden’s budget proposal is the kind of thing only a progressive could get enthused about it. It grows the executive branch’s regulatory power, takes total yearly spending to nearly $10 trillion by 2033 (up from just over $6 trillion now, post-Covid), and depends on increased regulatory enforcement actions to bring additional revenue in. That last idea is especially bad. Biden ran for the nomination as the moderate alternative to Vermont Sen. Bernie Sanders, but he’s governing as Sanders would have. The federal government’s capacity to print and borrow money is just about infinite, so there’s little to stop his planned growth in government from happening. You can blame the politicians all you want. What they’re doing, Democrats and Republicans alike, reflects what they believe are the wishes of the people who put them in office. And they, just in case it’s not clear, are us. It’s often said Americans want more government than they’ll pay for. That’s not quite true. What we want is the illusion of safety and security and to be protected from the adverse consequences of bad choices without having to consider the costs. That’s especially true when the subject turns to government regulation of the economy, where the costs are not transparent, the benefits are hard to define, and the reality doesn’t match the rhetoric. Consider the collapse of Silicon Valley Bank. Many of the so-called experts were quick to point to the relaxation of federal banking rules set by the Dodd-Frank law by Donald Trump as the reason it failed. That’s a great story for regulation-happy politicians like Massachusetts Sen. Elizabeth Warren and New York Congresswoman Alexandria Ocasio-Cortez, who want to make case for even more burdensome rules. But it’s not accurate. It’s already been shown the regulators who were supposed to keep watch were asleep at the switch. Some economists think it may be that the regulations already on the books helped drive SVB out of business. It’s time to consider whether the total U.S. regulatory burden does as much to contribute to business failure as it does to prevent it. Is the American business safety net worth what it costs? By some estimates, the regulations issued during Biden’s first two years drained more than $300 billion from the economy. That’s a 50% increase over Barack Obama’s first two years and eight times more expensive than all the rules released in all four years of the Trump administration. The Biden numbers reflect the 443 final rules issued through late October 2022, which required roughly 193,000,000 hours of compliance paperwork across the nation, according to data collected by the American Action Forum, a public policy group. By contrast, the Trump administration released 500 final rules in its first two years that saved the economy an estimated $3.4 million and took up just 500,000 hours of compliance time. That’s a clear contrast. It’s time to talk about which worked better – the heavy-handed one taken by Obama and Biden or the light touch, cooperative method used under Trump. Business groups like the U.S. Chamber of Commerce and others prefer the latter – and we should listen. They’ve been active in pushing back against the regulatory onslaught because they understand from their members that it kills jobs, lowers wages, and causes economic growth to stagnate. Rather than vilify these groups as the media and the liberal special interests invariably do, we should listen to their arguments more carefully. And we need to accept that the responsibility for keeping the economy going is not theirs alone, it’s ours. Government overreach and excessive regulation by the Biden administration is crippling businesses, stifling economic growth, and infringing on our freedoms. Not all regulation is bad but, if we keep accepting the predictions of doom and gloom that come from the special interests and politicians who promote more government intervention in the marketplace, things will only get worse.
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