Besides President Obama, Republicans vying for the presidential nomination have made government regulations their favorite punching bag on the campaign trail. Without exception, the candidates have scapegoated “burdensome regulation” for stifling job creation and economic growth — ignoring that a lack of regulation enabled the financial crisis that led to the Great Recession.
Environmental regulations and the agency that enforces them, the EPA, have been singled out for particularly rough treatment. Republicans have scheduled a series of votes starting this week aimed at repealing or halting them. But two reports highlighted today by Politico — one by the Economic Policy Institute, the other by Public Citizen — are a useful reminder that in addition to saving lives and protecting public health, regulation actually spurs economic growth and competition:
A new report by Public Citizen documents five major instances in which the introduction of government regulations led to breakthrough innovations.
“In some ways, what happens is regulation sort of rallies business’ motivation,” said Taylor Lincoln, a research director for the consumer advocate group. “Industry has an incentive to come up with a better mousetrap.”
For example, increased energy efficiency for refrigerators, washing machines, air conditioners and other appliances will save consumers more than $13 billion a year through 2030.
The EPI report concludes that far from deterring economic progress, “the dollar value of the benefits of the major rules finalized or proposed by the EPA…exceeds the rules’ costs by an exceptionally wide margin.” Additionally, their June 2011 report titled “A lifesaver, not a job killer” found that the EPA’s proposed “air toxics rule” would actually lead to modest job creation.
Laurie Johnson, chief economist at the Natural Resources Defense Council, points out that if better ozone pollution standards were in place, businesses sitting on $2 trillion in cash reserves would have bought and installed new equipment, possibly generating tens of thousands of jobs.
When Republicans talk about the costs of complying with regulations, they always neglect to mention the accompanying economic benefits, which are usually far greater. For instance, a 2010 EPA analysis found that tighter standards should cost $19 billion to $25 billion, while generating economic benefits of up to $37 billion.
Equally important, Republicans’ relentless focus on deregulation actually hurts the economy. EPI writes that “an emphasis on deregulation can contribute to dramatic economic dislocation.”