Obama's Regulatory Reform Test; Only Follow-Through Will Prove the President Means Business

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Assume your government job is to write regulations to require bicycle manufacturers to make safer bicycles. You know two things. The first is that if you

say bicycles are being made about as safely as they can be, then you will no longer be needed; hence, no job. Second, you know there were no U.S. commercial airline fatalities in the U.S. in 2010 (an amazing and true fact) while about 1,000 people died in bicycle accidents in 2010. Thus, as long as you argue that riding a bicycle should be made as safe as flying in an airplane and that tougher regulations on bicycle manufacturers could make bike-riding safer, you can keep your job.

President Obama jumped on the regulatory-reform bandwagon last week after two years of greatly expanding costly regulations and reducing personal liberty, particularly on health care and financial services. I confidently predict his new initiative will be a failure. History has shown that the vested interest of the regulators in job preservation and expansion almost always swamps efforts at regulatory reform.

Mr. Obama said, in essence, that the benefits of regulations should exceed the costs - which every president, at least going back to Jimmy Carter, also has said. President Reagan made the most serious attempt to rein in the regulatory monster by staffing his administration with many talented and committed deregulators, but even they were often frustrated by the regulatory bureaucrats and Congress. We will now have a test of whether Mr. Obama is serious and will seek to carry out his own words.

The Obama Environmental Protection Agency (EPA) has ruled that carbon dioxide is a pollutant and, as a result, has been holding up the permitting of new power and manufacturing plants. If this continues, it will cause a significant drop in U.S. economic growth and job creation, yet it will have no measurable benefit. China, India and many other countries are rapidly increasing CO2 emissions, overwhelming whatever actions the United States may take. Even if all new CO2 emissions were stopped globally, it would be decades before there would be even a minor effect on global temperatures. Now, new research is indicating that sunspot activity is much more important than CO2 when it comes to influencing the earth's temperature. The EPA ban is nothing more than national economic suicide. Let us see if Mr. Obama has the courage to tell the EPA to stop.

The Internal Revenue Service (IRS) has just issued a proposed regulation that would have an enormous cost on the U.S. economy with no benefit. Specifically, it is demanding that U.S. banks report the amount of interest they pay foreign nationals to their governments. The U.S. long ago decided not to tax interest earned by foreign investors in order to attract their money. …