Monday, January 12, 2015

(Related update 2): Regulating Prosperity

Related update 2: The Obama Administration has been yoking the economy with wealth-destroying regulation at a rate nearly 50% greater than the previous Bush administration, costing taxpayers and the economy over $180 billion last year alone.  From a Washington Times article last week:
President Obama’s pen and phone imposed $181.5 billion in regulatory costs during 2014, including proposed and final rules,” said a summary of the report, written by Sam Batkins, AAF’s director of regulatory policy. “In 79,066 pages of regulation, Americans will feel higher energy bills, more expensive consumer goods, and fewer employment opportunities. No one can accuse the president of abandoning his promises on regulation in 2014.”
Speaking to a group of federal employees last month, Mr. Obama said Republicans “are about 25 percent right when it comes to regulatory burden.” He said his administration continues to take steps to eliminate outdated rules and to work with the business community for more sensible policies.
But a report last month by the Congressional Research Service showed that businesses have been hit with nearly 50 percent more “economically significant” regulations under Mr. Obama than under the presidency of George W. Bush.Mr. Obama has issued 406 of these regulations, estimated to cost businesses more than $100 million per year, over his first six years in office — an average of 68 per year. Mr. Bush issued 277 such regulations over his first six years in office, for an average of 46 annually.
Click here to read more.

Related update 10/21/14:   Here's another take on the incredibly destructive effects of regulation on the US economy, this time from Rich Karlgaard writing at Forbes.  Karlgaard notes that if the US economy grew at the rate of just 1% more per year since 1948 -  given that data suggest that regulation costs the economy 2% growth per year, a reasonable assumption -- look how much difference it would make:
Where would the U.S. economy be today?
–The 2014 GDP would be $32 trillion, not $17 trillion.
–Per capita income would be $101,000, not $54,000.
–Per capita wealth would be 480,000, not $260,000. It would probably be higher than that, since savings rates might be higher.
–The U.S. would have no federal, state or municipal debts or deficits.
–Pensions would be solid. So would Social Security.
–The trend of new entrants to The Forbes 400 would not favor entrepreneurs in software, the Internet and financial services but would be more broadly distributed across all industries. Electronic bits–money and software–are less prone to regulation than such physical things as factories, transportation, etc.
–Faster, quieter successors to the supersonic Concorde? Cheap, safe nuclear power? Cancer-curing drugs for small populations? Bullet trains financed by private investors? Yes!
–The U.S. would have the resources to fight the multiplicity of threats from abroad, from ISIS to hackers.
Original post (10/8/14):  That is, in effect, what happens in a regulatory state such as the US economy.  Carl Svanburg, writing at the blog Voices for Reason, discusses recent research suggesting that governmental regulation of our economy costs nearly $2 trillion per year! From his article:
The Regulatory BurdenA new study by Nicole Craig and Mark Craig, professors of economics at Lafayette University, estimates that the cost of federal regulations is $2trillion. That amounts to billions of hours in compliance.
This sum represents a tragic loss. To see why, just imagine if entrepreneurs and innovators were free to spend those billions of hours and trillions of dollars on creating the “next big thing” — everything from self-driving carsto wireless electricity.
Svan berg's article contains two specific examples of government regulation wreaking havoc on industry and economic productivity.  Click here to read it.