Economic Outlook: Reviewing regs

By ANTHONY HALL, United Press International  |  Feb. 7, 2011 at 9:10 AM
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Leaders in Washington are reviewing regulations across the board, with an implied promise that removing a few onerous rules would create jobs.

President Barack Obama has asked federal agencies to look into rules they oversee with an eye on jobs creation, hoping a rule tweak here or there will put more Americans to work. The Washington Post reported Monday that Rep. Darrell Issa, R-Calif., the new chairman of the Government Oversight and Reform Committee, has asked trade groups for their input on the matter. But suddenly, the same intention, creating jobs through a review of rules, sounds completely different.

To explain the president's initiative, deputy White House communications director Jen Psaki said, "If there are rules on the books that are needlessly stifling job creation and economic growth, we will fix them. But we have a responsibility to protect the health and safety of the American people, and rolling back regulations that ensure access to clean drinking water, protect children from lead poisoning and put in place a safe and secure financial system on the heels of the worst financial crisis in a generation is not a responsible approach to governing."

Issa, the Post reported, simply asked industry groups to identify rules that "have negatively impacted job growth" and received, in turn, a variety of complaints. The Kitchen Cabinet Manufacturers Association complained about restricted use of formaldehyde in pressed wood and the Business Roundtable bemoaned a rule about chief executive pay disclosure it said would be "very difficult and expensive."

That order mandates that firms disclose the ratio of the top salary in the company to the pay of hourly workers, which sounds neither difficult nor expensive and may even add jobs in the accounting department, highlighting the difference between Issa's directive and the president's.

"Business owners remain on edge regarding the tidal wave of federal government regulation that has been advanced or proposed over the past two years," wrote Karen Kerrigan, president of the Small Business and Entrepreneurship Council.

As such, coal mining companies asked that greenhouse gas emission standards be rolled back or "stopped immediately," and automobile companies said complying with fuel-efficiency standards set for 2012-2016 would cost the industry $50 billion.

That is a hefty sum, but there is no particular evidence to suggest that $50 billion would be spent on jobs if the mandates were eliminated.

Looking at it one way, even competition among car companies is a job-killer because quality brands that last longest and have better resale value are going to be popular brands. Cheap cars put more people to work building replacements for shoddy products. Think how many jobs would be created if automobile makers made cars that only lasted a week.

Some fear Issa's bully pulpit strategy will undermine progress on health, safety and economic sustainability. The director of climate policy at the Natural Resources Defense Council, David Doniger, said Issa was asking for a "Christmas list" from businesses.

If Issa's effort was sincere, he would "ask both sides [business and environmental groups] to come in and tell you the facts," Doniger said.

True, Issa reopened Pandora's Box on a wide variety of rules, but it would be equally absurd to conduct a review of rules and leave business groups out of the loop. As long as Issa isn't making promises ahead of himself, it makes sense to hear what he has to say.

In international markets Monday, the Nikkei 225 index in Japan rose 0.46 percent and the Shanghai composite index in China rose 0.3 percent. The Hang Seng index in Hong Kong fell 1.49 percent and the Sensex in India added 0.16 percent.

In Australia, the S&P/ASX 200 was flat, rising 0.12 percent.

In midday trading in Europe, the FTSE 100 index rose 0.74 percent while the DAX 30 in Germany gained 0.91 percent. The CAC 40 in France gained 0.93 percent and the Stoxx Europe 600 rose 0.86 percent.

Topics: Darrell Issa
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