For decades, the Republican party and conservatives in particular have screamed about ‘’burdensome regulations’’ holding back the economy.
The laissez-faire, free-market crowd, as well many closely aligned think-tanks such as the American Enterprise Institute, the Cato Institute and the Heritage Foundation have argued for a long time that if we just got the federal government out of the way, everything would be fine.
The market economy would flourish, and voila — prosperity for everyone! As the story goes…Unfortunately, just like the argument that reducing taxes leads to business prosperity and investment, the argument that reducing regulations and commerce controls would benefit the economy is similarly being unraveled by new data. Both prongs of the typical Republican economic medicine get weaker under factual scrutiny. Before we start, I have some recommendations on this topic.
Public Citizen, for example, is a good alternative to the right-wing noise concerning the regulatory state.
New annual studies, by the Office of Management and Budget, conducted since the year 1998 and commissioned by the White House, have found that the benefits of economically significant regulations outweigh the costs by bounds and leaps.
These reports find that major regulations actually pose a net-benefit for the economy, rather than a drag. Every single one issued between the day the OMB was commissioned on this subject and today finds this conclusion and that the cost-benefit ratio is sometimes as high as 12-1.
For example, the earliest report found that regulations issued after 1988 had net benefits of between $30 billion and $3.3 trillion. They admit, however, that this wide range of estimates is because the quantification methods were still imprecise.
‘’The new estimates range from $170 billion to $230 billion in annual costs and $260 billion to about $3.5 trillion in annual benefits for social, i.e., health, safety, and environmental regulation. Using the ranges to reflect the substantial uncertainty in the estimates, quantified (and monetized) net benefits could be as low as $30 billion, or as high as $3.3 trillion.’’
The most relevant and accurate publications are those issued by the OMB between 2016 and 2017. These are also the most recent regulations, issued in large part by the Obama administration. This is important, because the regulations issued during his term (2009 — 2017) were by far the most controversial rules ever. These are the policy decisions that the GOP has slammed as ‘’job-killing’’ and ‘’anti-growth’’ repeatedly. They find that;
‘’The estimated annual benefits of major Federal regulations reviewed by OMB from October 1, 2005, to September 30, 2015, 4 for which agencies estimated and monetized both benefits and costs5, are in the aggregate between $208 billion and $672 billion, while the estimated annual costs are in the aggregate between $57 billion and $85 billion, reported in 2001 dollars. In 2014 dollars, aggregate annual benefits are estimated to be between $269 and $872 billion and costs between $74 and $110 billion.’’
— 2016 report
‘’The estimated annual benefits of major Federal regulations reviewed by OMB from October 1, 2006, to September 30, 2016, 5 for which agencies estimated and monetized both benefits and costs, are in the aggregate between $219 billion and $695 billion, while the estimated annual costs are in the aggregate between $59 billion and $88 billion, reported in 2001 dollars. In 2015 dollars, aggregate annual benefits are estimated to be between $287 and $911 billion and costs between $78 and $115 billion.’’
— 2017 report
Really, the facts don’t align with the conservative and libertarian arguments that Obama made the economy weaker by fulfilling his pro-safeguards, pro-health, pro-environment and pro-consumer agenda. It was just more Republican noise, and it still is.
So the question stands…
Why is the free-market right so fanatical about deregulation? It is very simple. It is because these positions are bought and paid for by the rich and powerful. It is not about you, it is about them. The data bears this out. Powerful interests have been desperate to convince the public of ‘’free enterprise’’ and ‘’free markets’’ ever since the advent of the New Deal and the Stagflation 70s.
The American Enterprise Institute was founded in 1938 by a group of corporations wary of the Roosevelt administration. This included General Mills, Eli Lilly, Bristol Myers and Chrysler, which is a slightly abbreviated list.
Then the Powell Memo came in 1973, which urged lobbying groups to fight against the left on economic issues. The method was to create a massive public relations campaign. That same year, the Heritage Foundation was formed. Then in 1977, the libertarian Cato Institute, which now has strong corporate connections, was founded by Charles G. Koch.