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Is President Obama Shifting Right, or Being Shifty?

He's playing both ends against the middle. Nuts? Don't bet on it.

by
Dan Miller

Bio

January 25, 2011 - 12:00 am

Has President Obama had a miraculous Paul of Tarsus like conversion while traveling his own road to Damascus? A true Obama moment? According to Rasmussen, his favorable vs. unfavorable ratings have been in the positive range. The country is broke and getting broker by the minute, but so what? There were some leg tingles when he announced a forty-five billion dollar trade deal with China during President Hu’s visit. However, very little was actually new business: “It’s largely an amalgamation of agreements that had already been inked, including Boeing’s $19 billion airplane deal.” Oh well. He has also “appointed GE Chairman Jeffrey Immelt to head his newly created Council on Jobs and Competitiveness,” the successor to Paul Volcker’s Economic Recovery Advisory Board. Oh well again; Immelt may be a crony capitalist and the poster child for corporate welfare but it’s still awesome; the country desperately needs councils and czars and the more the merrier.

The world looks forward anxiously to President Obama’s State of the Union message when ambience will trump substance and there will be at least some attempts to show unity. It won’t be like this event at the opening of the Scottish Parliament in 2004 where the members all joined hands and sang Auld Lang Syne; they seemed to be enjoying it. The show of unity at the State of the Union address should be spectacular in any event. It will also provide a great comedy routine to amuse our enemies abroad, and a welcome respite from harsh partisan rhetoric for those in the United States. Can President Obama really speak out of both sides of his mouth unaided, or will his ventriloquist be required? How about a split-screen teleprompter?

President Obama recently announced in a Wall Street Journal op-ed piece that there are too many stupid old (as distinguished from stupid new) anti-business regulations and that he is going to fix them. Will there by any deregulatory impact on climate initiatives, ObamaCare, and Dodd-Frank? No, only the bad old regulations are up for consideration:

The Clean Air Act … embraced common sense rules of the road that strengthen our country without unduly interfering with the pursuit of progress and the growth of our economy.

Besides, agencies must be held accountable! Of course; but for what and to whom? The people? The Congress? The president? It would be at least a minor miracle if he would or could somehow fix the current mess he worked so hard to make. He won’t:

We have, from time to time, embraced common sense rules of the road that strengthen our country without unduly interfering with the pursuit of progress and the growth of our economy.

Sometimes, those rules have gotten out of balance, placing unreasonable burdens on business — burdens that have stifled innovation and have had a chilling effect on growth and jobs. At other times, we have failed to meet our basic responsibility to protect the public interest, leading to disastrous consequences. Such was the case in the run-up to the financial crisis from which we are still recovering. There, a lack of proper oversight and transparency nearly led to the collapse of the financial markets and a full-scale Depression.

Over the past two years, the goal of my administration has been to strike the left right balance. And today, I am signing an executive order that makes clear that this is the operating principle of our government.

This order requires that federal agencies ensure that regulations protect our safety, health and environment while promoting economic growth. And it orders a government-wide review of the rules already on the books to remove outdated regulations that stifle job creation and make our economy less competitive. It’s a review that will help bring order to regulations that have become a patchwork of overlapping rules, the result of tinkering by administrations and legislators of both parties and the influence of special interests in Washington over decades. [emphasis added]

He should know about the ways in which agency rules can damage the economy because he has been the catalyst for many such rules in the recent past. His signature legislation, ObamaCare, has numerous statements such as “the Secretary shall determine” with little or no statutory guidance as the bases upon which the Secretary is to make his determinations. Such nonsense continues; he claims that the goal of his “administration has been to strike the right balance.” If what has happened thus far reflects his administration’s notion of the “right balance,” then keeping that same balance means more of the same. Is he serious? Of course he is, about getting reelected next year, and the best way to do that is to make noises he hopes will please business while permitting him to continue to boldly go precisely where he has gone before. Drill, baby, drill? Let’s change the subject and talk about something less oily; ObamaCare? That’s off limits too.

In addition to his op-ed, President Obama issued an executive order to implement his plans. It looks remarkably like an executive order issued by President Clinton back in 1993, with a principal difference that the 1993 order didn’t exempt silly new regulations and it did recognize that we and “our” regulators must recognize that “the private sector and private markets are the best engine for economic growth.” President Obama’s 2011 executive order begins:

Our regulatory system must protect public health, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and job creation. It must be based on the best available science [climate change?]. It must allow for public participation and an open exchange of ideas. It must promote predictability and reduce uncertainty. It must identify and use the best, most innovative, and least burdensome tools for achieving regulatory ends. It must take into account benefits and costs, both quantitative and qualitative. It must ensure that regulations are accessible, consistent, written in plain language [he's joking?], and easy to understand. It must measure, and seek to improve, the actual results of regulatory requirements.

According to the San Francisco Examiner:

As wonderful as that sounds, we suspect it is motivated less by a desire to ease regulation than by the need of a stridently anti-business administration to mollify corporate interests and business donors in a difficult election cycle. In Obama’s first two years in office, he showed no signs of concern about the number of costly regulations being issued by federal regulators. He set new records for both the number of major regulations issued (43) and their added annual net burden on the economy (conservatively estimated by the regulators themselves at $26.5 billion). None of these will be revisited or revised by Obama’s initiative. James Gattuso and Diane Katz of the Heritage Foundation, who analyzed the new regulations in detail, predict that the real costs of Obama’s regulations so far are probably much higher than the government estimates.

On the other hand, according to an article at the Huffington Post:

Here we go again. When Bill Clinton suffered an electoral reversal after his first two years in office, he abruptly embraced the corporate money guys who had financed his congressional opposition in an effort to purchase a second term. On Tuesday in his Wall Street Journal Op-Ed piece, Barack Obama veered sharply down that same course, trumpeting his executive order: “to remove outdated regulations that stifle job creation and make our economy less competitive. …”

He employed the same “creating a 21st-century regulatory system” rationalization used by Clinton when he signed off on the sweeping deregulation legislation that unleashed the Wall Street greed that ended up being the biggest job-killer since the Great Depression. “Over the (past) seven years, we have tried to modernize the economy,” Clinton enthused as he signed the Financial Services Modernization Act that repealed key New Deal legislation, adding, “And today what we are doing is modernizing the financial services industry, tearing down those antiquated laws and granting banks significant new authority.” Modernizing was the propaganda constant, as in the Commodity Futures Modernization Act that Clinton signed, thus shielding financial derivatives from any government regulation.

I’m generally for most anything HuffPo opposes, but its opposition has some merit, albeit for the wrong reasons. President Obama’s scheme involves for business merely empty calories of the sort rejected by Ms. Obama. It looks nutritious but won’t stave off hunger longer than a box of Chinese carryout. Back in 1993, I was busy practicing administrative law in Washington; I didn’t notice much impact of the Clinton executive order and I anticipate even less from President Obama’s.

More than an executive order saying “Hey, guys! Let’s do something good” is needed to get rid of administrative agency regulations, no matter how stupid. To modify a rule, and few are likely to be repealed outright, an agency can’t just say: “The president spoke and we must obey. Now!” The Administrative Procedure Act requires more and for a long time has. Under Section 533 even the most compliant agency has to initiate a rule-making proceeding by publishing a notice in the Federal Register. The notice must state (a) the time, place, and nature of the proceeding, (b) the legal authority under which the rule is proposed, and (c) the terms or substance of the proposed rule or a description generally of the subjects and issues involved. After Federal Register publication, at least thirty days must be given for public comment. President Obama’s executive order of January 18 extends the thirty day period to at least sixty days. Following the initial comment period, another similar period is often allowed for responsive comments. The comments are, of course, studied with great diligence by agency staff for however long it may take before new rules are promulgated for additional public comment (as required by the executive order). Eventually the new rules as likely changed in response to public comment and possibly further public comment must be published in the Federal Register and can eventually come into effect no sooner than thirty days after their publication there. I have participated on behalf of clients in enough rule-making proceedings to know that they usually take a long time.

There must also be compliance with Paperwork Reduction Act requirements mandating efforts to minimize redundant and unnecessary public information collection burdens along with estimates of the amount of time the relevant agency decides the information “request” will entail. Then there must be time for appropriate public comment under Section 3507 of the Act. Then there must be certifications to the Office of Management and Budget. Want to see a typical Paperwork Reduction Act statement? Look at any handy IRS form. The burden estimates for complying with such information “requests” are often risible.

The most effective way to get stupid old and also new regulations out of the way would be through selective and specific defunding: no money, no enforcement.

If dragged out, President Obama’s “deregulatory” process could conceivably take until after the 2012 elections; it need not but will if that’s desired by the agencies. There is no certainty that even if they become effective the new rules will be less destructive of economic activity than the old rules and they may even be more destructive; agencies are normally reluctant to curb their own power whether for good or ill. Curbs produce less rather than more bureaucratic power and since hiring more rather than fewer subordinates to carry out agency functions is the easiest path to advancement, curbs are taboo.

So what’s the point? This is a great time for President Obama, in a spirit of bipartisan cooperation, mature reflection, and overpowering gravitas, to polish his new happy face, smiling upon friend and foe alike but mainly upon those whom he needs for reelection next year. He needs the left and with a compliant press they can be counted upon to get in line pretty quickly. He also needs the middle and he needs them to get in line now if the rest of his term is to be deemed “successful” and therefore worthy of re-election. Hosannas in the highest from all would be appreciated. Anybody want to become a czar? More will certainly be needed and I understand the pay and perks are pretty good.

Dan Miller graduated from Yale University in 1963 and from the University of Virginia School of Law in 1966. He retired from the practice of law in Washington, D.C., in 1996 and has lived in a rural area in Panama since 2002.
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