Is the fact that overregulation kills economic growth one of
the country’s best-kept secrets? Or is it perhaps that the effects of overregulation
are not widely understood or discussed. With all that’s been going on – the tax
bill, the government shutdown, everything President Donald Trump says, does, wears,
tweets or thinks – showing the downside of too many regulations and too much
government doesn’t attract nearly as much attentions as it should.
A huge number of Americans don’t understand how over-regulation
negatively affects the economy, and quite a few subscribe to the idea that in
order to keep greedy businesses in line, more regulation is needed. This
condition provides bureaucrats and politicians to hurt the people they exist to
serve by putting harmful regulations into effect.
Every regulation businesses have to follow costs them money,
increases the cost of products and services to customers, and makes operating a
business profitably more difficult. Every dollar spent on non-productive and
unnecessary regulatory compliance is a dollar that can’t be used for higher wages,
better equipment, expansion and other beneficial things.
Trump pledged to get rid of two existing regulations for
every new regulation, which has never been done before. The actual reduction in
regulations last year was even better than two for one, and the economy has
shown its appreciation through job creation and higher GDP.
Maurice McTigue, Vice President of the Mercatus Center at
George Mason University, says that in addition to millions of Americans, many of
those serving in Congress also don’t understand the economic effects of over-regulation.
And he said “the pace of regulatory reform going on today is faster than at any
time since the Reagan Administration.”
Research from Mercatus shows that if regulations since 1980
had just been held at that level, the economy would have been 25 percent larger
by 2012. But regulations grew to the point that in 2012 the economy was $4
trillion smaller than it would otherwise have been. That works out to the
equivalent of 32 million lost U.S. jobs.
If that lost $4 trillion was a country’s economy, it would
be the fourth largest economy in the world, McTigue wrote.
One area where reducing regulations has had beneficial
effects is in coal country. Last October Fox News reported coal production was down 31.5 percent over the last
10 years, but was up 7.8 percent to that point in 2017.
Politifact
noted that Fox had under reported the numbers, using projections rather than
actual figures, which show production was actually 12 percent higher than at
the same point the year before, and the decline over the last 10 years was
closer to 33 percent.
“According
to the Energy Information Agency, West Virginia coal production year-to-date is
up 20 percent over the same period last year,” West
Virginia Coal Association President
Bill Raney wrote last
November, “and we appear on target to possibly cross the 100 million
ton level for the full year.”
“Even
so, we remain a long way from the 170 million tons we produced in 2008, before
the Obama Administration began its war on coal. And we may never get back to
those levels, because most of those 400 coal-fired power generation units Obama
shut down with his regulatory assault have been torn down, left to rust or
converted to natural gas,” Raney continued.
“The
good news is the world never stopped recognizing the value of coal, and 2,200
new coal-fired power plants are scheduled to go online between now and 2040.
Many of those plants will look to import their supplies and we plan to be the
source of much of that coal.”
“But
none of this would be possible without the 2016 election of President Trump,”
Raney acknowledged. “He has one-by-one rescinded every anti-coal regulation
enacted by the Obama Administration, and he continues to do more. Just
recently, his Department of Energy issued a report that said it is vital for
the U.S. to preserve its coal fleet for the sake of the stability and reliability
of the electric grid.”
In a
state as badly damaged by regulatory warfare as any in the nation, West
Virginia is dramatic evidence of both the horrors over-regulation causes and
the benefits of getting rid of harmful government interference. West Virginia’s
unemployment rate has fallen from double digits in late 2016 to 4.4 percent in
November.
Think what you will of Donald Trump, but he has been in
business for a while, and he has been successful at it. And because of his
experience, he knows that a prosperous nation needs successful and thriving
businesses to provide needed and wanted goods and services, as well as the jobs
that provide people the money they need to purchase those things they need and
want, and to live a decent life.
Regulatory reform and improvements to the tax system have
already produced positive results in the economy, pushing unemployment to much
lower levels than they have been for a while and pushing productivity to
respectable levels after many years of unsatisfactory performance.
We should be appropriately pleased with the good things
happening in our country today, not overly critical of the person who has
allowed them to occur.
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