I recently had the privilege of listening to my friend Jade West* give a talk to a group of C-Suite execs in Rancho Mirage, CA. Jade brought up the subject of federal regulations and presented some fascinating information from a recent article on the subject.** But before we look at the effect of these regulations on the free market, we should begin with a quote from the White House:
Earlier this year, President Obama outlined his plan to create a 21st-century regulatory system – one that protects public health and welfare while promoting economic growth, innovation, competitiveness, and job creation. Among other things, his Executive Order on Regulation said the following: Always consider costs and reduce burdens for American businesses and consumers when developing rules; expand opportunities for public participation and public comment; simplify rules; promote freedom of choice; and ensure that regulations are driven by real science. (Whitehouse.gov).
First, let’s keep the record straight. The last few administrations have issued similar executive orders, and other administrations have passed significant amounts of regulations. But currently you and I are looking at 4,200 regulations coming down the road and that numbers doesn’t even include regulations from the EPA, Dodd-Frank, or Healthcare Reform.
How does that compare? While employment at regulatory agencies has grown 13% to more than 281,000, jobs in the private sector shrank 5.6% through the same time period. The regulatory portion of the federal government would be the third largest business by employees in the country if it were in the private sector. That makes it larger than McDonald’s, Ford, Disney and Boeing – combined.
The size of government is growing at a tremendous pace, and this growth will cost taxpayers now and in the years to come; that is why I’m putting all these facts in front of you. The 75 new major rules set out by the current Administration it is first 26 months cost businesses more than $40 billion.*** This cost is born by all taxpayers: the 49% of working individuals who actually pay taxes, about 1.9 million C Corporations, and approximately 30 million flow-through corporations.
All this regulatory growth takes time and money away from American businesses. It distracts us from doing what we started in business to do, and it makes it harder for the entrepreneurial spirit to flourish.
* Jade West is Senior Vice President-Government Relations for the National Association of Wholesaler-Distributors. She also serves as Executive Director of the Wholesaler-Distributor Political Action Committee. Jade is the senior lobbyist for NAW, advocating the interests of the wholesale distribution industry in Washington both on Capitol Hill and with executive branch departments and agencies.
** Investors Business Daily, 08162011; http://news.investors.com/article/581555/201108151901/regulation-busines...
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