RED TAPE NATION

Christopher MarkowskiArticle, Research & The Economy0 Comments

AUGUST 2011

The August 22, 2011 edition of the Wall Street Journal contained a column written by Laura Meckler titled White House to Scale Back Regulations on Business. I started reading this column at around 4:15 AM. My coffee hadn’t yet finished brewing at that time, so it is possible that I was not yet operating at full capacity. I know it is not an excuse, I should have known better, but I admit it, I was excited.

Could it be? Did the administration finally heed the call of business owners around the country and subsequently change his course and start to get out of our way?

So I started to read… “The Obama administration will release final plans Tuesday for ending or cutting back hundreds of regulations, an effort to reduce the burden on business and counter criticism that the White House is tone-deaf to business concerns. Certain railroad cars won’t have to install expensive technology, hospitals will be able to skip a round of federal paperwork and low-risk travelers to the U.S. will enjoy expedited entry. Some businesses will be allowed to file forms electronically. The administration estimates that about a dozen of the changes will save business some $10 billion over five years.”

So much for my hope for a change… Railroad cars technology updates? Hospitals get to skip one round of paperwork, yippee! Line at customs moving a little faster at JFK International Airport…Wow isn’t that special. Some businesses get to file forms electronically…that will certainly get everyone off the sidelines. $5 billion in savings… How cute.

Excuse my sarcasm, but this announcement coupled with a delusional op-ed piece by the regulatory czar Cass Sunstein has got my blood boiling. Sunstein writes, “Early this year, President Obama ordered an unprecedentedly ambitious government-wide review of existing federal regulations, emphasizing that we must measure and seek to improve, the actual results of regulatory requirements.” He directed agencies and departments to produce preliminary plans to streamline those requirements and eliminate red tape.”

I could go on, but my head might explode. My question is…Do these people believe their own bull-excrement or are they just downright dishonest?

Lets check the scoreboard shall we…The Obama administration proposed 229 new rules and finalized another 379 in July. The estimated cost with complying with these rules is $9.5 billion. So far this year, new regulatory rules put together by Obama, Sunstein and the Red Tape Gang added as much as $114 billion in yearly new costs. The 2011 edition of the Competitive Enterprise Institute’s annual Ten Thousand Commandments study states, “At the end of 2009, the Code of Federal Regulations was 157,974 pages long. In 2010 3,752 new rules hit the books equivalent to a new regulation coming into effect every 2 hours and 20 minutes, 24 hours a day, 365 days a year.”

A study by economists Nicole V. Crain and W. Mark Crain for the Small Business Administration found that yearly cost of regulations in the U.S. hit more than $1.75 trillion in 2008. That is approximately 14% of our overall economy. When broken down by household, the cost was $15,586, which in turn is 50% greater than average health care spending per household. The Crain’s also found that the regulatory costs to business were $8,086 per employee, with an even greater amount of $10,585 on small businesses.Regulations stifle job growth. For some idiotic reason this administration seems to believe that if they put foreword temporary payroll tax relief, it will somehow magically ease the burden and sign an all clear. The current climate for business and job creation can best be described as a minefield. We have American businesses looking out over a minefield of excessive and costly regulation, an ever-changing overly complex and unfair tax-code, and of course Obamacare, a brand new entitlement that is already costing businesses a fortune that they cannot figure out. Nobody wants to tread through a minefield.

John Merline wrote in the Investors Business Daily, “If the federal government’s regulatory operation were a business, it would be one of the fifty biggest in the country in terms of revenues, and the third largest in terms of employees, with more people working for it than McDonald’s, Ford, Disney and Boeing combined.” The Regulators Budget, compiled by George Washington University and Washington University found that regulatory agencies have seen their combined budgets grow 16% since 2008, putting it now over $54 billion. During that same period the economy grew only 5%.

Who said Obama didn’t create jobs? Since Obama took office, employment at regulatory agencies has climbed 13% to more than 281,000, while private-sector jobs shrank by 5.6%. Business is downright booming at the Obama Regulations Factory! According to a study by James Gattuso of the Heritage Foundation, so far under the Obama regime, we have over 75 new major rules costing the private sector more than $40 billion. “No other president has imposed as high a number or cost in a comparable time period.”

But wait there is more! The Federal Register notes that more than 4,200 regulations are in the pipeline. That doesn’t even include Dodd-Frank or Obamacare.

This past June, the oil industry released a plan that the Obama administration refused to consider. This plan put forth how the industry could create thousands of jobs if only they were allowed to get back to work. The American Petroleum Institute and the National Ocean Industries stated, “We estimate that tens of thousands of jobs have been lost in response to the decline in capital expenditures and operational spending from 2008 to 2010.” The report also stated that, “If the government pursues a balanced regulatory approach, total employment supported by the Gulf of Mexico oil and gas industry in 2013 could exceed 430,000 jobs which is 77% increase from 2010.”

Our government has also taken on the role that most associate with pirates or socialist dictators. Eat your heart out Captain Jack Sparrow; you too Hugo Chavez, the Obama administration and his gang of bureaucratic pirates is going after the oil.

From the Investors Business Daily, “During the Age of Exploration, seafarers carefully guarded their maps of discovery to ward off plunderers. Incredibly, Exxon faces a similar kind of piracy against its big Gulf oil discovery, as regulators snatch at its permit.”

Exxon just announced their discovery of the largest oil field ever found in the Gulf of Mexico. It is a deep-water field, over 7,000 feet deep. You would think that a discovery such as this would bring excitement and congratulations from the Government/Pirates; think of all the future tax revenue they are going to get. Instead the Interior Department bureaucratic pirates mobilized to steal the booty.

Employing an extreme technicality, these regulators claimed that Exxon’s request in 2008 for a short suspension of activity to upgrade and make safer its drilling operation amounted to an abandonment of three of its five permits, simply because Exxon hadn’t signed a contract with another partner, Chevron by the time the suspension was completed. In the past, such glitches were no problem, after all, it’s obvious Exxon, which spent $300 million on exploratory wells, hasn’t abandoned the operation.”

Last year, three oilrigs left the Gulf of Mexico. This year, it is ten. The rigs are off to safer locales, namely the Republic of Congo, Nigeria, Egypt and Brazil. You read that right safer locales. Louisiana Oil & Gas Association President Don Briggs stated, “When you have companies that would be spending hundreds of millions of dollars, or in some cases billions of dollars, they need certainty. We don’t have that now, and I don’t expect we will anytime soon.”

Let us review…

We have this situation where unemployment is above 9%…The oil industry supports over 9.2 million jobs and it is estimated that hundreds of thousands more could be added if we continue to explore and tap into our vast recourses.

We are reliant upon others for our energy needs….At over a billion barrels of oil, this find is a big dent in our reliance upon others.

The left keeps calling for more tax revenue and the need for those terrible rich people to “pay their fair share.”…This well alone could generate over $10 billion in tax revenue…

Nobody said pirates or socialist dictators were smart.

Warning: This next example is one of the most frightening examples of our government gone horribly wrong that I have ever covered.

The Boeing Corporation, which just so happens to be our nation’s largest exporter, decided that it wanted to build brand new shiny airplanes in South Carolina. They have a new plane design they are about to start building called the Dreamliner. This plane already has a backlog of orders worth over $162 billion.

Boeing has traditionally built its aircraft in Puget Sound, Washington with a unionized workforce. Many of the Dreamliner’s will still be built in Washington, but due to the backlog, Boeing decided to invest more than $2 billion in a new plant and hire 5,000 new workers in South Carolina.

That was the plan, build, create, grow, innovate; ideas and traits we that should make us all proud.

Not so fast, said the Obama administration. There will be no happily ever after for you Boeing!

This past April, the National Labor Relations Board filed a complaint against Boeing, accusing it of opening the South Carolina plant to retaliate against the union. The NLRB wants Boeing to shut down the plant, fire all the workers and move it back to union friendly Puget Sound so in my opinion, they can keep the union dues cash register ringing.

The Obama administration has stated that its hands are tied in this case. The NLRB is an independent regulator, they say. That statement can best be described in the eloquent words of none other than South Carolina Representative Joe Wilson…“YOU LIE!”

First, Obama appointed the top blood-sucking bureaucrats at the NLRB. Second, In a press conference this past June, Obama stated, “As a general proposition, companies need to have the freedom to relocate.”

Really? Could have fooled me, because in a formal statement of Administration policy this past July, the chosen one, the one we have all been waiting for, came out against a bill sponsored by South Carolina Representative Tim Scott that would have reduced the power of the NLRB and

forbid it, “from ordering any employer to relocate, shut down, or transfer employment under any circumstance.”

Let’s review…

The Obama administration wants to order a private business, dictate to a private concern, where they can set up shop, where they can build, where they can expand, where they can hire within the United States of America. Our nation’s greatest exporter is being urinated on by this administration. That also goes for the State of South Carolina, and its people as well.

Could anyone fault Boeing if they decided that the United States of America is too unfriendly to private business and they would be better served moving production to the Far East? Could anyone blame Governor Nicki Haley if she decide to withhold tax revenues from going to Washington D.C.?

If the government really wants to create jobs and grow the economy what it needs to do is quite simply get out of the way. The little Lilliputian bureaucrats and regulators have succeeded in tying our economy down with their seemingly endless supply of red tape.

  • Editorial Staff To Rule Means To Reign Investors Business Daily 8/9/11
  • Meckler Laura White House To Scale Back Regulations on Business Wall Street Journal 8/22/11 
  • Sunstein Cass Washington is Eliminating Red Tape Wall Street Journal 8/23/11 
  • Editorial Staff Get Out Of The Way Of Jobs Investors Business Daily 8/19/11 
  • Editorial Staff Exxon Fights Regulatory Pirates Investors Business Daily 8/19/11 
  • Merline John Regulation Business, Jobs Booming Under Obama Investors Business Daily 8/15/11 
  • Editorial Staff The White House vs. Boeing Wall Street Journal 7/28/11 
  • Editorial Board Rigged For Failure Investors Business Daily 8/24/11

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