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Obama Concedes Regulation Hurts Business

January 19, 2011

In the wake of President Obama’s announcement today to examine regulations to strengthen our economy, Obama has conceded that regulation hurts business.  Today President Obama initiated through executive order a  review to “make sure we avoid excessive, inconsistent, and redundant regulation.”  This marks the second of two major concessions by President Obama since the November elections.  First, during the tax-cut debate during the lame duck session, he conceded that tax cuts are essential for economic growth and recovery.  Now, either in an effort to appear more centrist or win back support from business leaders, he has admitted that government regulation in many ways hurts the business environment.  It also follows, therefore, that bigger government equals more regulation to slow business growth and the economy.  Is this not the same administration who speaks of de-regulation as a major cause of the economic downturn we are now facing?  If de-regulation is the key to economic recovery, and I think it partly is, why wouldn’t the administration try that first before billions of deficit spending tax dollars were wasted in a failed stimulus package?  This marks another victory for conservatives and Republicans, but more importantly, I applaud the administration because I think this is the right thing to do.

For decades we have heard from those on the left, and more recently from the Obama administration, that de-regulation from the Bush administration caused the economic downturn. Even in Obama’s first two years in office, more regulation has been his answer for many problems (financial reform, health care reform, cap and trade, the seemingly endless list of Administrative Czars).  Now, and thank goodness, he seems to be changing his tune, acknowledging the fact that extensive government regulation hurts the business environment.

Although this is a great step in the right direction, Obama made it clear that Health Care Reform and Financial Reform would be exempt for the regulation review.  So basically, as I see it, the administration is saying this: “We realize excessive regulation hurts the economy, so we are going to examine what regulation we can cut, but not any of the regulation that we have put in place or gives us more power.”  This is similar to liberal’s attitude toward Fannie Mae and Freddie Mac.  People like John McCain and even the Bush Administration pushed for more regulation to ensure Fannie and Freddie weren’t taking on too many risky loans.  However, people like Barney Frank, and even then Senator Obama, spoke out and voted against more regulation, leading to the mortgage crisis.  Obama’s history of attitudes toward regulation can be summed up as follows: if your a private industry we need to control your activities, if your already government organization controlled by the administration or congress and can be used to gain power, no oversight needed.

Is Obama’s attitude changing with this announcement today?  Is he trying to move to the center like Clinton?  Is he trying to get back on the good side of Wall Street and the business community? It’s hard to know.  It’s clear that Obama’s success as a President, and his hope for a second term, lie in the success of the economy.  If he were really serious about changing his attitude toward regulation, he would include all regulation, not just that not implemented by his administration.  Again, I applaud the effort at de-regulation, but if your serious about getting government out of the way of the economy, examine all policy, all regulations, in all departments.  In any event, the administration has conceded in the national debate about the role of government in regulating the economy, that excessive regulation of an increasingly larger government stifles economic growth.


11 Comments leave one →
  1. January 19, 2011 6:52 pm

    Obama is conceding the point regulation hurts the economy to make it seem hes not as far left as he is. But great question, if he knew this already, what was the point of the stimulus bill? Kind of makes you wonder if he wanted the economy to grow to begin with. Prsonally I’ve always thought he wanted a welfare state an dthis makes me believe that more.

  2. January 19, 2011 7:12 pm

    Thanks for the comment. Obama is an ideologue. He didn’t do this before because in his arrogance, he thought he could spend his way out of it in FDR style. Since that proved to be a failure time and time again, and after his “shlacking” in November, he has to move to the middle and try something different to save himself and the economy. So, he’s tried this. But again in his arrogance and ideology, he won’t examine the legislation he put into place, Health Care Reform and Financial Reform. Thanks again.

  3. Jim permalink
    January 19, 2011 7:25 pm

    Look at the Obamacare bill for starters. We’re being taxed for 10 years but getting 6 years of actual benefits, in it’s current form. Nobody in their right mind would buy something today to use it 4 years down the road. We also know that government has no self control over using the taxes for 4 years to pay for Obamacare. Forget looking at regulations that kill the economy, let’s look at the fraud of this Obamacare bill. According to him, we can’t.

    • January 19, 2011 7:38 pm

      Thanks a lot for your comment, Jim. Your absolutely right. When you grow government the way Obamacare will, you create more regulation, and more money needed to run this massive new program. When you look at examples of Medicare and Social Security, the funds of those programs have already been spent time and time over. If Obama is serious, he’s got to shrink government, and not leave any regulation off the table. Thanks again, Jim.

  4. Jim permalink
    January 19, 2011 10:09 pm

    Obama isn’t going to shrink government, the GOP controlled House is going to kill the funding for a lot of these programs. They can trim $100B rather easily and still have much more to go. Something I find extremely hypocritical is that when government regulations don’t work, that we need more government regulation. Rush put it best this afternoon regarding the GOP budget cut bill, they should go out there and say “We have to pass the bill so you can find out what’s in it.” Media will be all over them wanting to see the budget cuts.

    • January 20, 2011 1:11 am

      No Obama won’t. It’s up to the Republicans to force him to, like they did with Clinton in the 90’s, or at least force him to veto and show his hand. Thanks for the comment, you raise good points.

  5. January 20, 2011 2:01 am

    Obama is trying to move to the right and in doing so he is admitting that the Republicans are right on the economy. During the campaign he said the Bush tax cuts hurt the economy and we couldn’t afford them anymore–yet as president he admits that raising taxes is what hurts the conomy so he extends the tax cuts. During the campaign he claimed there wasn’t enough regulation in government, yet now he looks to deregulate (with the execption of his policies of course.) This man will say whatever it takes to get re-elected and I simply do not believe he is really moving to the center, he just wants it to look that way.

    • January 20, 2011 2:05 am

      I think your exactly right, Steve. You have to keep in mind that Obama has never had any real world experience with any of these economic policies. He’s only learned about them. It’s possible, now that he’s actually in power, he might be learning what actually works. More likely, he knows he has to be more centrist to win re-election and not see his approval ratings dive again. Let’s see how long this “centrist” attitude lasts. Your right, he’s a politician. He will do anything to win. Thanks for the comment and please subscribe to receive future posts. Thanks!

      • January 20, 2011 4:00 pm

        This man will say whatever it takes to get re-elected and I simply do not believe he is really moving to the center, he just wants it to look that way.”
        That’s just it – we really don’t know what to believe because we have no real track record with him to know what his true position is on the economy, in my opinion. I do think he’s an intelligent guy, however, and am hoping that he may- unlike other politicians – let intelligence trump ideology here and base business policy on what small businesses are saying that they need. We’ll know fairly soon whether or not I’m being naive. 🙂

        As for Obamacare, I do believe it is a mess but (unfortunately?) I’m more for repair than repeal at this point. I say “unfortunately” because I hate how the bill was forced upon us, but I don’t think the Republicans have anything better to replace it with at this point.

  6. Jim permalink
    January 20, 2011 4:51 pm

    I’m glad the House passed the repeal bill, regardless of it’s outcome it makes a strong symbolic statement. Obama needs the economy to appear to show signs of life again so he can raise funds for his reelection attempt. I heard his campaign is after 1B in campaign contributions. The amount of money this guy spends is insane. As Savage said this guy’s whole motive is trickle up poverty, destroy the middle class.

  7. January 20, 2011 9:41 pm

    With his announcement today to keep guantanamo open with military tribunals, its becoming more clear that he’s trying to move to the center. it’ll be interesting to see what other policies he modifies, or what policies he persues, if he is indeed trying to move to the center. Thank you everyone for the comments. A very good and intriguing conversation!

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