Today’s much weaker than expected employment numbers show that the president’s agenda of more regulation and increased spending has undoubtedly failed. However much money he throws at the problem, entrepreneurs are not going to start adding jobs to the economy while the burden of regulation is so high. Regulations cost the economy $1.75 trillion each year. It is regulation that is dragging us back to recession.
The president should instantly upbraid his cabinet members and agency heads for the derisory responses to his call for deregulatory efforts, which will barely scratch the surface of the problem. He should demand total regulatory relief to the tune of at least $500 billion a year, and make it clear that it’s just a start. His agency heads have so far found a sum two orders of magnitude smaller than that, a clear sign that they don’t understand what’s wrong with the economy.
The president should also be reining in his out-of-control union-relations boards. The National Labor Relations Board is trying to stop firms opening new factories, and the Railways Mediation Board is using Depression-era rules to intimidate airlines. This is the wrong action at the wrong time. If the president is serious about getting Americans back to work, he will stop putting barriers in the way of employers right now.
Obama’s over regulating Regulators are doing exactly what Obama wants them to do. Obama is incapable of reigning in government in any way. He is incapable of seeing the harm done to business and workers.
Reply to this commentLinkReport AbuseWe could start turning the American economy around in one day by repealing Dodd-Frank and Obamacare. Follow that by replacing the top management of the NLRB, MMS, FTC, DOJ, and SEC with people who understand that the country depends on a growing and successful private sector. Follow that by adopting a serious budget that shows a path to fiscal sustainability. Follow that with legislation that subjects any major new rulemaking initiative to a Congressional vote, and requires a sunset vote on existing major regulations at least every 10 years.
Reply to this commentLinkReport Abuse"If the president is serious about getting Americans back to work"
Comedy gold.
Reply to this commentLinkReport AbuseI've always thought an inspiring congressional candidacy could be run on a platform of passing no NEW laws during their time in office, but only passing repeals of old laws-- old regulations, old taxes, old subsidies. Kind of like a "spring cleaning for the Republic" platform.
Reply to this commentLinkReport AbuseYou expect this from President Obama? He's the president you're referring to, right? I ask because what you're asking for would be impossible for President Obama.
Reply to this commentLinkReport AbuseMr. Murray,
Your claim the numbers were "much weaker than expected" is puzzling to me. Anyone with half a brain expected this the day Obama was elected. I expect more managed decline numbers in the future.
The "much weaker than expected" storyline creates a soft landing for the liberals who have been progressively destroying this country for the past 40 years.
It is time to tell the American people that horrific numbers such as we saw today are to be expected as long as these morons are in charge.
Only then can we hope there will be change.
Reply to this commentLinkReport Abuse"If the president is serious about getting Americans back to work, he will stop putting barriers in the way of employers right now."
If he were so inclined, the regulations would not have been promulgated in the first place. Things are going exactly how Der Commissar planned them.
Does everyone like the new "food plate", which Michelle dreamed up to replace the allegedly over-confusing "pyramid"? It's replete with a "side dish" of dairy!
No, Obama's wedded (literally!) to this brand of socialism.
Reply to this commentLinkReport AbuseThe last economic crisis happened in large part because banks were under-regulated - they weren't being required to carry enough capital reserves to remain liquid if a crisis hit. How short are our memories, that we're already forgetting this? Unnecessary regulation is bad, sure, but there are plenty of places were regulation is, indeed, quite necessary. Just ask the people in the central PA gaslands, who can light their tap water on fire these days, about whether there is too much regulation of industry right now.
Reply to this commentLinkReport AbuseThe banking crisis was not caused by lack of regulation. The root cause was government involvement in housing finance (FNMA, FHLMC), which grossly distorted market signals resulting in in an unsustainable bubble. This problem was compounded by the government's "too big to fail" policy, which encouraged excessive risk taking.
Dodd-Frank imposes enormous regulatory costs on business (including many industries that have nothing to do with Wall Street or finance), while doing nothing to fix the real problems.
Reply to this commentLinkReport AbuseThe banks weren't "underregulated" - they were overregulated. They were told that they needed or had to provide loans to people they wouldn't normally give loans to. Then the defaults started rolling in in huge numbers. That was a perfect example of social engineering, by the US government, gone terribly bad.
Reply to this commentLinkReport Abuseport1080 said: "Just ask the people in the central PA gaslands, who can light their tap water on fire these days, about whether there is too much regulation of industry right now."
Methane in well water is documented in a report in 1976 by the Colorado Division of Water (long before fracking) and reports of this go back to 1936.
Government regulations are not sacred. Government regulatory agencies are not sacred. The fact that the regulators are appointed and not elected and wield some much power runs counter to fundamental principles of America: of, by, and for the people. There are now insufficient checks and balances on those agencies and the carrer bureaucrats.
Reply to this commentLinkReport Abuse"The banks weren't "underregulated" - they were overregulated. They were told that they needed or had to provide loans to people they wouldn't normally give loans to. Then the defaults started rolling in in huge numbers. That was a perfect example of social engineering, by the US government, gone terribly bad."
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84% of subprime loans were issued by private lenders not regulated by the CRA. Only 1 of the top 25 subprime lenders was CRA regulated. It is a complete and utter myth that the federal government forced banks to make these bad loans. Lenders were just overconfident in their ability to manage their risk, and blinded by the huge profits. They failed spectacularly.
Reply to this commentLinkReport AbuseThose loans never would have made had Freddy and Fanny not made it clear that they would buy up all of them.
It was then Freddy and Fanny who repackaged those loans and sold them as investment grade.
So, are you know arguing that Freddy and Fannie are under regulated?
Reply to this commentLinkReport Abuseporto - "84% of subprime loans were issued by private lenders not regulated by the CRA. Only 1 of the top 25 subprime lenders was CRA regulated. It is a complete and utter myth that the federal government forced banks to make these bad loans. Lenders were just overconfident in their ability to manage their risk, and blinded by the huge profits. They failed spectacularly."
Who spoke the word "CRA", porto? The CRA, and the regulatory and investment climate it created, absolutely contributed to the 2008, but no, it did not do so in isolation.
And that article you linked to is weak sauce:
Fannie and Freddie were seized by the gov't, yet the article contains nary a mention about WHY they were seized. 'Cause they did such a bang-up job?
Sure, the majority of subprime loans were made by private, non-regulated entities. Uh, no #$%$, Sherlock. That's the nature and function of Fannie and Freddie, namely, to pool mortgages and offer them as securities. Once pooled, the risk of loss shifts from loan originator to gov't, making these two gigantic underwriters of weak loans.
Would said private lenders make such loans if they were to retain the risk of them? Given the loose monetary policy of the 2000's, possibly some of them as excess dollars chased increasingly weak investments. Oh, but these GSE's ratcheted up the stupid factor many times over, simply because they exist.
And in the end, aren't Freddie and Fannie, um, uh, GOVERNMENT ENTITIES? And as such, isn't their total and spectacular failure proof positive that government should a) enforce simple, standard rules and b) NOTHING ELSE?
Reply to this commentLinkReport AbuseMr. Murray provides the link to the "Competitive Enterprise Institute" report. Nowhere does it ascribe an actual cost to regulation, much less the $1.75 trillion number claimed.
If Mr. Murray can't read the report correctly, why is anything he says in this post credible? Just another dog whistle to those who believe government is inherently bad and free markets unqualifiedly good. Claptrap.
Reply to this commentLinkReport AbuseThe $1.75 trillion estimage of regulatory costs comes from a study sponosored by the government itself (the SBA) and is well known to everyone who follows the topic of regulatory reform with any degree of attention.
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Reply to this commentLinkReport Abuse"Sure, the majority of subprime loans were made by private, non-regulated entities. Uh, no #$%$, Sherlock. That's the nature and function of Fannie and Freddie, namely, to pool mortgages and offer them as securities. Once pooled, the risk of loss shifts from loan originator to gov't, making these two gigantic underwriters of weak loans."
Fannie and Freddie didn't start buying those loans until fairly late in the process. Lenders were originating them without any government guarantees and cutting Fannie and Freddie out of the profits. They got into the game because of investor pressure, because they couldn't compete and offer the same profits the private lenders seemed to be gaining. If they hadn't gotten into the market, there was plenty of non-guaranteed money that would have been out there for those loans. A crisis still would have occurred.
Reply to this commentLinkReport AbuseAs others have noted, it's all about Fannie and Freddie. Without the insatiable, government-sponsored demand of these entities for whatever loans the banks could generate, mortgage finance would have remained a dull backwater rather than the mania it became. And, housing prices would not have become wildly overinflated.
Reply to this commentLinkReport AbuseNo doubt the banking shenanigans and Freddie and Fannie
Reply to this commentLinkReport Abusecreated problems but they had willing congressional accomplices who refused to look at the root of problem. This exacerbated by idiot home buyers who greedily gobbled up loan products too good to be true and that they couldn't afford.
As for Obama,when Rush said " I hope he fails", nothing could have been better for America. The sad reality is that his keynsian economic policies have succeeded and continue to send us into decline. The way out is truly an uphill climb and will not happen while he continues in the Oval.
This article completely misses the point that Obama is captive to too many special interests who helped him get into office, and who have their own short-sighted agendas, not to mention his tight-knit cadre of ideology-driven Chicago advisors. He hasn't got the spine to tell them all to take a hike and do what any rational, common sense president would do, because he hasn't got the experience and background to even know what that would be.
Anybody but Obama in 2012.
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