Regulation Reform

[we vs us]

Lest you think the President hasn't been trying to please our corporate overlords (and create that fleeting, mystical, and possibly fictional environment of "certainty"), the Obama Admin released a series of rule reforms that will supposedly save $10B in the next 5 years.

... The Obama administration today announced final plans to overhaul government-wide regulations in a move they say will save businesses at least $10 billion over five years, and help spur the creation of new jobs.

Federal agencies are rolling out "hundreds of initiatives that will reduce costs, simplify the system and eliminate redundancy and inconsistency," Cass Sunstein, administrator of the Office of Information and Regulatory Affairs, wrote in a White House blog post.

The changes include reduced reporting requirements for hospitals and health-care providers, estimated to save $4 billion over five years; streamlined Labor Department hazard warnings, estimated to save $2.5 billion over five years; and a new EPA electronic reporting system for hazardous-waste generators, estimated to save $126 million a year.

Of course, the Heritage Foundation says that the Obama administration has already put into place 75 new major regulations since coming into office, totalling $40B in new expenses: "Among the new regulations imposed by the administration are fuel standards for cars and trucks, energy standards for light bulbs, rules for banks and financial institutions in the Dodd-Frank law and new insurance mandates as part of the health care overhaul."

http://blogs.abcnews.com/politicalpunch/2011/08/white-house-to-curb-federal-regulations-save-businesses-10-billion.html#comments

[Conan71]

Lest you think the President hasn't been trying to please our corporate overlords (and create that fleeting, mystical, and possibly fictional environment of "certainty")

You obviously still don't get it, but you appear to be more comfortable cradled in the government's arm and that's fine.

$2 billion a year in savings diluted over hundreds of thousands of businesses really doesn't amount to much on a per-business basis.  That's likely why they package that into a five year block to sound more impressive.

Depending on what time frame that $40 bln in new expenses related to the 75 new regs, that's still pretty dilute once it's spread over hundreds of thousands of businesses.  BUT- a time of recession when 22% of the potential workforce is sitting idle is not the time to start raising the cost of doing business.

[Gaspar]

You obviously still don't get it, but you appear to be more comfortable cradled in the government's arm and that's fine.

$2 billion a year in savings diluted over hundreds of thousands of businesses really doesn't amount to much on a per-business basis.  That's likely why they package that into a five year block to sound more impressive.

Depending on what time frame that $40 bln in new expenses related to the 75 new regs, that's still pretty dilute once it's spread over hundreds of thousands of businesses.  BUT- a time of recession when 22% of the potential workforce is sitting idle is not the time to start raising the cost of doing business.

I was actually a bit suprized and excited when I heard he was willing to shave $10 billion in regulation expenses for businesses over 5 years, but then when I read how, I had to chuckle. 

The total cost in NEW regulations from 2009 to present is $38 Billion.  As we approach the critical mass of Obamacare we face hundreds of billions in new regulations.  But hey, I'm not going to complain about ANY progress when it comes to cutting red tape.

Almost all of the $2 billion a year is realized by eliminating archaic paperwork laws related to businesses like railroads and transportation construction projects.

One of the reasons the President's stimulus was such a dismal failure is because of the cost of doing business with the government is so high, that companies realized far less profit than they could on private projects.  Relaxation of some of these regulations may help the success of any further stimulus spending.  This is a reactionary action designed to cushion failure rather than encourage growth.

So, it's 2 steps forward and 4,759 steps backward, but at least it's something.

[Gaspar]

Keep in mind that this only represents regulations costing $100 Million a year or more. 

[JCnOwasso]

Gaspar-  I agree that the cost in doing business with the Government can be high... rather the costs you are required to pay are higher than what you would need to pay in a commercial project.  Even more definite, the Government requires that you: hire employees legally allowed to work in the US; Pay those employees according to the Department of Labor classifications (in the case of construction); not use substandard materials etc.  Now if you talk about the paperwork aspects of projects, speaking from my experience on larger dollar contracts, the paperwork aspect of a project is minimal in the grand scheme of things. 

Now you have other instances where the sole reason for the increase of cost is directly related to the Government employees.  The Government has made great strides to eliminate excessive costs caused by Federal requirements.  Performance based contracts have changed the landscape of the services supplied, For instance, in the 80's there was a 80 page document on the proper construction of a chocolate chip cookie.  To include the appropriate temperature of each ingrediant, the number of times you stir after including each ingrediant (including the "RPM").  Whereas today, the specification would merely state "Provide Baked Cookies, Chocolate Chip".  When you over state the requirements, a contractor will price EVERY step of that process.   

[we vs us]

You obviously still don't get it, but you appear to be more comfortable cradled in the government's arm and that's fine.

If it makes you feel better to believe that I'm just another nanny-state softie, by all means.  Whatever gets you through the day.

The reality is, rules are what makes capitalism great.  Law and order, the basic societal expectations.  Without it, we're back in Victorian England -- with a vast poverty stricken underclass, untold environmental destruction, collateral damage everywhere.  Our current economic problems are directly attributable to weak rules and weak enforcers.  If we'd had a hand on the till in the 2000s, things wouldn't have gone this far. 

The things that the Heritage Foundation points out are ridiculous.  The outrageous new lightbulb regulations? The ridiculous new CAFE standards, incidently achievable by existing technology?  And Dodd Frank is -- weakly -- regulating a financial industry that hasn't been touched for nearly a decade and designed to reduce the chance of another credit bubble happening.  None of these things address ideas or priorities that are extraneous.  All have some policy usefulness.  So yeah, more cost?  Ok.  I'm fine with that because, as you rightly state, the cost spread out between all American companies is a pittance, especially compared with the trillions they're sitting on.

But broadly, I don't trust Steve Wynn.  I don't trust the other guys who've been wailing about new regulations.  Why?  Because 1) the regs are necessary 3) aren't huge enough to distort the market and 3) it's Steve Wynn's job to wail about this stuff.  Anything that erodes the bottom line -- regardless of whether it's warranted or not -- will get this kind of treatment. These are crocodile tears, but because the right is always going to believe Big Business over Big Government, they have a ready and politically powerful audience.  In the Tea Party they also have a pretty big moment to withstand whatever weak reforms Obama and the Dems have been pushing.

[Red Arrow]

The things that the Heritage Foundation points out are ridiculous.  The outrageous new lightbulb regulations? The ridiculous new CAFE standards, incidently achievable by existing technology? 

I think the new regulations are part of an economic stimulus.  Buy now... you won't like what's available later.