One Year Later: Remember Obama’s Op-Ed on Regulatory Overreach?
Last January, he promised to attack “excessive, inconsistent, and redundant regulation.”
January 6, 2012 - 12:00 am
It is customary as we greet a new calendar year to comment on notable events of the previous twelve months. Reviewing notes on 2011, I believe it’s appropriate to reflect on what President Barack Obama said about his approach to the regulation of business during a time of high unemployment and economic uncertainty.
On January 18, 2011, our president authored an op-ed published in the Wall Street Journal. In it he proclaimed his intention to attack “excessive, inconsistent, and redundant regulation” that could “stifle job creation and make our economy less competitive.” To underscore his sincerity, Mr. Obama wrote that he was ordering federal agencies to reduce the regulatory burden on small business.
This initiative, of course, was presented as part and parcel of the president’s efforts to foster job creation in difficult times. In the business community it was hoped that this signaled a more balanced approach to economic regulation. The president seemed to promise a rational approach to regulation that would enable businesses to invest, and hire, and create wealth with and for working Americans.
Obama’s article was criticized on the left, out of fear that this was indeed his intention.
After a full year, it’s fair to ask whether the president actually meant what he said in his Journal piece. What can we learn from the administration’s actions about the veracity of the president’s pledge not to “stifle job creation” and to attack “excessive” regulation? It turns out we can learn a great deal, as some illustrative news items from the past year reveal.
As the president’s op-ed went to press, regulators at the Securities and Exchange Commission and other agencies were swamped with the workload of issuing new regulations to implement the Dodd-Frank legislation, which dramatically expands federal power over the financial sector. Elsewhere, other federal regulators were busy writing regulations to implement the Obama administration’s statutory takeover of the health care industry and the student loan business. These and other projects expanding the regulatory reach of Washington are proceeding unabated as we enter 2012.
To be sure, the crafting of sweeping new regulatory regimes did not divert the administration from its focus on jobs. Take, for example, the thousands of jobs that would be created, directly and indirectly, by Boeing’s plans to open a manufacturing plant for the 787 Dreamliner in South Carolina. Boeing’s plans were cause for celebration in South Carolina. But the National Labor Relations Board reacted with an unprecedented and — many experts opined — unlawful action to block the project, at the behest of unions seeking leverage in negotiations with Boeing. For this administration, we learned some jobs were more equal than others.
We also learned in 2011 that, in this administration, similarly situated companies will not necessarily be treated similarly. In August, federal agents from the U.S. Fish and Wildlife Service raided the Memphis and Nashville manufacturing facilities of Gibson Guitars, disrupting its business operations and subjecting the company to prolonged and expensive legal proceedings. This was all because ebony veneers for Gibson’s guitars were slightly more than 6 millimeters in thickness and thus in violation of a law in India, the country of origin for the wood.
At first blush, one might conclude this is an “excessive” regulatory action that could “stifle job creation.” One might think this especially so inasmuch as Gibson’s chief competitor, Martin, was reported to be engaged in essentially identical conduct but was not raided by federal authorities. But wait — the chief executive of Gibson had made campaign contributions to Republicans, while Martin was a Democratic Party donor. Apparently, the president’s op-ed pledge did not override his earlier pronouncement about punishing enemies and rewarding friends.