Don’t Blame Regulations
Friday, September 9th, 2011
This week Republican presidential candidates faced off in a debate, and President Obama addressed a joint session of Congress. And much of the rhetoric from both events was about jobs, jobs, jobs.
Although the GOP candidates didn’t see eye to eye on everything, they did agree with the standard Republican argument that what’s holding back American business are regulations and taxes. Several of the candidates claim to have spoken to small business owners around the country who say government regulations are keeping them from hiring more workers and even forcing them to lay people off.
The President also brought up regulations in his speech. “I agree that there are some rules and regulations that do put an unnecessary burden on businesses at a time when they can least afford it,” he said. “But what we can’t do — what I will not do — is let this economic crisis be used as an excuse to wipe out the basic protections that Americans have counted on for decades.”
Are regulations really killing jobs? Kevin Hall and other reporters for McClatchy Newspapers have been talking to small business owners, and they say regulations are the least of their problems.
“None of the business owners complained about regulation in their particular industries, and most seemed to welcome it. Some pointed to the lack of regulation in mortgage lending as a principal cause of the financial crisis that brought about the Great Recession of 2007-09 and its grim aftermath,” Hall wrote.
The business owners mostly blamed the slow economy for their problems, and one said he was more burdened by insurance than by taxes and regulations. A few were thankful for federal stimulus money, which helped them stay afloat during the worst of the crisis.
Of course, there are all kinds of small businesses, and some may be more affected by regulations than others. But if you really want to know who’s against government regulations, don’t look at small business. Look at big business.
The anti-regulation campaign is backed mostly by advocates for big business, such as the U.S. Chamber of Commerce. In recent years the Chamber has become a profitable lobbying group for big corporation interests.
Many big business groups oppose worker’s rights, workplace safety regulations, and environmental protection because complying with regulations cuts into profit. If you look at the history of workplace safety in the U.S., you see time after time that needed regulations were delayed for years because industry groups threw lots of money at Congress to stop them. In the meantime, workers were suffering needless death and injury.
For example, in the 1960s medical research proved beyond doubt that exposure to asbestos causes the deadly lung cancer mesothelioma. But industry groups challenged regulations to protect workers and consumers from asbestos, so enacting regulations to protect workers was an uphill fight.
The mining industry shows us starkly what a difference regulations make. There were no major mining disasters in the U.S. from the early 1980s until 2001. Then the “pro-business” Bush Administration appointed former executives of mining companies to regulate mining safety. Regulations were weakened to reduce citations and fines. More than 70 American miners have died in mine disasters since.
The mining corporations saved money by not correcting dangerous conditions, and miners paid with their lives. But gutting mine safety didn’t help the economy grow, create new jobs, or even make energy cheaper. It just made mining executives richer.
Politicians talk about helping small business because everyone likes small business. Small business is the local dry cleaner, restaurant, and flower shop. Big business is a multinational corporation headed by wealthy CEOs. But it is really big business lobbyists and interest groups pressuring Congress to fight regulations. If you aren’t a wealthy CEO or major stockholder, don’t assume cutting regulations will help you.
