Political Animal


November 14, 2011 10:00 AM It’s not the government regulations, stupid

By Steve Benen

Ask congressional Republicans what’s wrong with the economy, and they’ll point to federal regulations. I don’t imagine there’s anything that can change the GOP’s mind on this.

That said, several major media outlets deserve credit for fact-checking the claim and making clear just how wrong the argument is. Recent analyses from CNN, the New York Times, the AP, the Economic Policy Institute, the Wall Street Journal, and McClatchy newspapers — relying on, among other things, BLS data, surveys from the National Federation of Independent Business, and Brookings Institution scholarship — all said the same thing: government regulations are not responsible for holding back the economy.

Over the weekend, the Washington Post’s Jia Lynn Yang had a pretty thorough review of the evidence, and reached the right conclusion: the government regulations the right complains about just don’t have much of an impact.

Data from the Bureau of Labor Statistics show that very few layoffs are caused principally by tougher rules. Whenever a firm lays off workers, the bureau asks executives the biggest reason for the job cuts.

In 2010, 0.3 percent of the people who lost their jobs in layoffs were let go because of “government regulations/intervention.” By comparison, 25 percent were laid off because of a drop in business demand. […]

Economists who have studied the matter say that there is little evidence that regulations cause massive job loss in the economy, and that rolling them back would not lead to a boom in job creation. […]

“Based on the available literature, there’s not much evidence that EPA regulations are causing major job losses or major job gains,” said Richard Morgenstern, a senior fellow at the nonpartisan think tank Resources for the Future who worked at the EPA starting under the Reagan administration and continuing into President Bill Clinton’s first term.

GOP officials simply refuse to believe this, because their ideology tells them otherwise, but supply and demand still matter. Businesses aren’t hiring more because they need more customers, not fewer regulations. Republicans are confronted with these pesky details and respond with an agenda that undermines demand and targets regulations anyway.

Indeed, what must seem truly incomprehensible to the right is the notion that these regulations were put in place for a reason, and serve a valuable purpose: “The critique of regulations fits into a broader conservative narrative about government overreach. But it also comes after a string of disasters in recent years that were tied to government regulators falling short, including the financial crisis of 2008, the BP oil spill and the West Virginia mining accident last year.”

Conservatives will protest, but the facts are there for anyone who wants them.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.


Post a comment
  • wvng on November 14, 2011 10:02 AM:

    They don't want them. And they will repeat their talking points regardless of the facts.

  • Danp on November 14, 2011 10:11 AM:

    I wonder how many Republicans would argue that even one failed business due to regulations is too many. Then I also wonder whether Arthur Anderson and Enron would argue that regulations ultimately put them out of business.

  • c u n d gulag on November 14, 2011 10:13 AM:

    Facts, schmacts...

    What are facts, when you have an ideology!

    To paraphrase the GREAT Stephen Colbert, 'Republicans believe the same thing on Thursday that they did on Tuesday, no matter what happened on Wednesday!'

    Party over country!


  • walt on November 14, 2011 10:25 AM:

    War is the one constant among political extremists. Even when they're winning, they keep pushing since it's an existential necessity for ideologues to be locked in mortal combat with some cosmic evil. And the evil they see in liberals they manifest in themselves because evil cannot simply be asserted. It has to be realized here and now.

  • John B. on November 14, 2011 10:31 AM:

    "Superfraud." If congressional Democrats get suckered again like this, they will destroy the party, Obama's reelection, and the middle class.

  • Zorro on November 14, 2011 10:42 AM:

    Facts have a well-known liberal bias. Ditto math + anything w/the word "science" in its title. Except for creation science- that's just wunnerful.

    Don't wanna be an American idiot,

  • beejeez on November 14, 2011 11:09 AM:

    It's telling so few conservatives come to this popular site to argue points.

  • Momo on November 14, 2011 11:26 AM:

    New financial regulations, EPA carbon emission regulations combined with potential tax hike do cost to businesses, which will cause some job loss. that is a fact.

    but government always has to weight the benefits for greater numbers of people and loss for the few. job loss from new regulations and tax increase is much smaller than cost of not having these things on a long term, for everyone.

    i think that's what's missing in these discussions on TV.

  • Rick Massimo on November 14, 2011 11:40 AM:

    I'm sure that creating a couple of jobs here and there is somewhere on the long list of things companies would do if they were able to splurge freely without worrying about regulations and taxes.

    Similiarly, I would be able to buy lots of things and pump thousands of dollars into the economy if I didn't pay child support. That doesn't mean I shouldn't pay it.

    It's really not that difficult.

  • Rabbler on November 14, 2011 12:09 PM:

    Many will hear the opposite said 5X a day, everyday. Saying the truth once in a blue moon is not going to accomplish much. For most of the electorate, it is not what you say, it is how and how often you say it.