by James A. Bacon
So… according to today’s reports, the U.S. economy failed to produce any jobs in August and unemployment remains stuck at 9.1%. Why would that be? Is it still all George Bush’s fault? Are we dealing with the lingering after-effects of the Japanese tsunami? Or could Obama administration policies be somehow to blame? I present two random data points that I came across this morning: one regarding the impact of excessive regulation and the other the non-impact of Obama’s stimulus spending.
Small business owners say that regulations issued by the O Team is stifling job creation. “There are more than 4,200 new environmental, financial, labor and other regulations pending at the federal level today, which are causing uncertainty and ultimately harming small businesses and their ability to create jobs,” says former U.S. Senator Blanche Lincoln, who chairs the Small Businesses For Sensible Regulations initiative, an initiative of the National Federation of Independent Businesses. “This is simply unsustainable in our struggling economy.”
According to a report conducted for the Small Business Administration’s office of advocacy last year, government regulations cost $1.75 trillion a year in a $15 trillion-a-year economy. Over the last five years, there has been a 60 percent increase in pending federal regulations that are defined as “major” or “economically significant” – costing the economy $100 million or more. Even if those numbers are exaggerated, as lefty think tanks say they are, the actual number is still huge.
In the video above, Mike Bucci, a former Capital One employee-turned-Richmond-entrepreneur, tells how new paperwork requirements have hindered the expansion of his new business. The way I figure it, small business owners have a better handle on what they’re dealing with than the White House spinmeisters, very few of whom have ever had to meet payroll.
Meanwhile, President Obama’s soon-to-be-announced jobs plan is expected to call for cranking up stimulus spending — without calling it stimulus spending. He will call it investing in “innovative infrastructure ideas” to put people back to work, such as more money for green jobs. The crash of solar-panel manufacturer Solyndra, recipient of some $500 million in federal backing, apparently has not dissuaded the Big O from the conviction that he can do a better job of picking winners and losers than the U.S. venture capital sector can.
In a mundane example closer to home, Wall Street Journal contributor Stephen Moore writes about the dispensation of $300,000 under the 2009 stimulus bill to install solar paneling on the roof of a library in Arlington County:
Arlington officials boast the project will save $14,000 in annual electricity costs, but the solar panels have a life span of no more than 10 t0 15 years. So the feds spent $300,000 to shave at most $150,000 off the net present value of Arlington’s electric bills.
I don’t blame Arlington County. Hey, if someone is handing out money, why not take it? But that is lousy national economic policy. The American economy might have received a fleeting, $300,000 jolt from the construction of those solar panels, but it got an offsetting $300,000 jolt to the national debt — adding incrementally to the uncertainty and insecurity associated with the debt. Moreover, that “investment” didn’t create economic value, it destroyed economic value. More “investments” like that will drive the economy deeper into a hole.
Dear Lord, please deliver us from those who would save us.
