Obama Concedes Regulation Hurts Business
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.