May 16, 2013

Regulation Is Also Cause Of Economy’s Slow Snap Back From Recession

From: Investors Business Daily


Economic prospects for the nation remain dismal for the foreseeable future,  especially in the context of historical trends.

Following recessions, the economy usually comes roaring back — and the longer  and deeper the recession, the more robust economic growth tends to be as  productivity and job-growth surge.

But the recovery from the recession of the last decade has been anemic at  best, and is expected to remain comparatively weak at least through the  remainder of Obama’s second term.

A report from the World Economic Forum (which generally favors aggressive and  expansive government) offers some insight into the reasons.

It highlights the Obama administration’s shortcomings: the erosion of  transparency in government, wasteful spending, burdensome regulation and waning  trust in the integrity of the public sector. Stultifying regulation has been a  hallmark of the Obama administration.

The Obama administration has imposed an array of dubious, nanny-state,  financial, environmental and consumer-product regulations that will cost  consumers hundreds of billions of dollars.

As usual, EPA has been a major offender. An example is the imposition of  overly stringent ambient air standards under the Clean Air Act.

Clean air is desirable, but an EPA rule finalized last year that created new  emissions standards for coal- and oil-fired electric utilities was  ill-conceived.

According to an analysis by Diane Katz and James Gattuso of the Heritage  Foundation:

“The benefits are highly questionable, with the vast majority being unrelated  to the emissions targeted by the regulation. The costs, however, are certain: an  estimated $9.6 billion annually. The regulations will produce a significant loss  of electricity generating capacity, which (will) undermine energy reliability  and raise energy costs across the entire economy.”

Increased energy costs mean companies will have less to invest in innovation  and new employees, and consumers will have less disposable income.

On April 19, a Friday — the day of the week when federal agencies release  information they hope will receive little attention — the Office of Management  and Budget made available without fanfare its draft 2013 Report to Congress on  the Benefits and Costs of Regulations covering regulatory activity through the  Sept. 30 end of fiscal 2012. The administration has lied about both the costs  and benefits.

OMB conceded that 2012 was the costliest year ever for compliance with new  regulations: With regulatory costs a whopping $19.5 billion, 2012 exceeded the  next highest cost year by 57%.

Economist Susan Dudley, who headed the regulatory side of OMB during the  second term of George W. Bush, puts these numbers into historical context: “By  the administration’s own estimates, the rules it issued in fiscal 2012 alone  imposed more costs on the economy than all the rules issued during the entire  first terms of Presidents Bush and Clinton, combined.”

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