"Conservative Economist: ‘Regulatory Uncertainty Is A Canard Invented By Republicans’"
One of congressional Republicans’ favorite explanations for sluggish job growth is supposed “regulatory uncertainty” being caused by the Obama administration. “It’s really pretty straight-forward,” Speaker of the House John Boehner (R-OH) has said. “We need to reduce the regulatory burden and the regulatory uncertainty that’s coming out of Washington.” “By pursuing a steady repeal of job-destroying regulations, we can help lift the cloud of uncertainty hanging over small and large employers alike, empowering them to hire more workers,” said House Majority Leader Eric Cantor (R-VA).
However, Bruce Bartlett — a conservative economist who worked for both the Reagan and H.W. Bush administrations, as well as for former Rep. Jack Kemp (R-NY) and Rep. Ron Paul (R-TX) — wrote today that this theory is just “a canard invented by Republicans“:
For some years, the Bureau of Labor Statistics has had a program that tracks mass layoffs. In 2007, the program was expanded, and businesses were asked their reasons for laying off workers. Among the reasons offered was “government regulations/intervention.” There is only partial data for 2007, but we have data since then through the second quarter of this year.
The table below presents the bureau’s data. As one can see, the number of layoffs nationwide caused by government regulation is minuscule and shows no evidence of getting worse during the Obama administration. Lack of demand for business products and services is vastly more important. [...]
In my opinion, regulatory uncertainty is a canard invented by Republicans that allows them to use current economic problems to pursue an agenda supported by the business community year in and year out. In other words, it is a simple case of political opportunism, not a serious effort to deal with high unemployment.
As the Economic Policy Institute found, “a simple review of investment and employment trends — what businesses are actually doing — reveals that employers are not behaving according to the narrative described in the uncertainty story: Employment and investment trends are what one would expect (or better) given the trends in the overall growth of the economy.” As Bloomberg News put it in an editorial, “the charge of ‘creating uncertainty’ is a way to blame Obama for the U.S.’s economic trials without having to explain the connection.”
The GOP is almost certainly not going to stop using the “regulatory uncertainty” talking point. But, as the research shows, the public and media should not take it seriously.