What businesses need is more stringent regulation! Nothing could be further from the truth, of course. Were already laboring under a huge burden which is becoming nearly impossible to handle. But if you were one of the millions of bureaucrats working for various state and federal agencies, that might well be your philosophy. If you were one of them, you might also think Why am I here, if not to come up with new rules and regulations?
There must be more productive ways of keeping these government workers busy – that is, if we even need that many overseers at all. Edmund Burke, the great Irish philosopher and statesman, once observed that Bad laws are the worst sort of tyranny. He was right, and businesses in the United States are currently being afflicted with economic tyranny of the most Orwellian kind. We are being attacked by a plague of new laws which would be considered economically unjustifiable in a more rational world.
Most of these regulations are coming from the U.S. government. The Heritage Foundation, in its ninth installment of the Red Tape Rising series by Diane Katz and James Gattuso, points out that 27 new major rules were published in 2014, bringing the total to 184 during the last six years, with more coming soon. The feds have estimated the additional cost to be $80 billion annually, but even this number is low because many expenses have not been and probably will not ever be fully quantified.
The total economic effect of federal regulation is astronomical. In The Cost of Federal Regulation to the U.S. Economy, Manufacturing and Small Business, commissioned by the National Association of Manufacturers, economists Mark and Nicole Crain wrote that regulatory costs could be as high as $2 trillion annually.
One of the most expensive new regulations will be the Environmental Protection Agencys Tier 3 Motor Vehicle Emission and Fuel Standards, which imposes even tougher emissions rules. Additional emission reductions required for methane are 80 percent and for particulates 70 percent. Gasoline sulfur content must be reduced from 30 to 10 ppm, which probably will not result in measurable environmental benefits. Consulting firm Baker & OBriens estimated cost (prepared for the American Petroleum Institute) for this new EPA regulation alone is $2.4 billion annually.
Katz and Gattuso suggest that an analysis of regulatory impacts be required before floor votes in Congress; that every major regulation obtain approval of Congress before actually taking effect; and that sunset deadlines should be routinely included.
They report that much of the excessive regulation in recent years is the result of Congress granting broad powers to agencies through passage of vast and vaguely worded legislation. In many respects, the need for reform of the regulatory system has never been greater. The White House, Congress and federal agencies routinely ignore regulatory costs, exaggerate benefits, and breach legislative and constitutional boundaries. They also increasingly dictate lifestyle choices rather than focusing on public health and safety.
With apologies to Stan Laurel and Oliver Hardy, we say, Well, heres another nice mess youve gotten us into. What do we do now?
Jack Goodhue, management coach, may be contacted by e-mail at oodhue@aol.com.