American Elephants

Lightening the Burden of Excessive Regulation by The Elephant's Child

President Donald Trump has made a good beginning on the immense burden of excess regulation on the U.S. economy and on us personally. Experts believe the cost is close to $2 trillion a year on the economy. Eager progressives believed that the way to fix everything would be strong regulations from the wise elite in Washington D.C. Well, you and I know that the elite don’t seem to be exceptionally wise, and in many cases are definitely deficient.

There was a better way of regulating, according to Steve Forbes, back in (of all places) the Clinton administration. Regulators should state the goals, and let the industry figure out the best way of achieving them.

Rep. Jeff Denham, R-Calif., recently asked the right question in a hearing on improving our infrastructure: “Can performance-based regulations be more effective than command-and-control regulations in achieving safety goals while imposing less of a burden on industry?”

The answer, of course, is yes and there is now a bill before Congress that would codify this common sense approach, The Revamping American Infrastructure Act of 2017. The proposed legislation would call on federal bureaucrats to “identify those regulations, guidance and policies that in current form establish prescriptive requirements for regulated entities; and are able to be replaced, consistent with Federal law, with outcome-based performance standards.”

Thanks to deregulation in 1980, the [freight railroad] industry morphed from an inefficient, loss-ridden system into the finest, most efficient in the world. Nonetheless, the industry is still weighed down unnecessarily by countless, archaic operational mandates. It is ready to deploy new technologies for inspections such as drones, trackside detection systems and sophisticated X-ray machines that would provide crucial information in real time. Yet the industry must abide by a rigid set of procedures established by the Federal Railroad Administration (FRA) that seems to think the world is still dominated by those legendary steam engines of yore.

Federal regulators wanted to address the problem of accidents caused by human error. To fix it, they wanted to dictate to the railroads the number of of persons  in a crew,  without any data that supported the notion that a second person in the cab would actually reduce the number of human-error accidents. (You remember the goofy regulation that all ingredients,with their calorie count in all pizzas, had to be included in the big sign back of the cash register in all pizza parlors.)

The EPA’s jihad against fossil fuels resulted in their so-called haze rule, supposedly to improve visibility. The rule would have forced the closure of several coal-fired power plants and killed many jobs, with no noticeable improvement in visibility.

Sensible removal of excessive government regulation should be a boon to the economy, and perhaps even reduce the number of government regulators. So far, so good. The Trump administration has made a good start.


Regulation, Red Tape, and the Heavy Hand of Government. by The Elephant's Child

The health of small business may be the most important indicator of long term growth in our economy. But this spring has been a hard time for small business. Only 119,000 jobs were added in March, and although April and May saw the jobs market perform better, small businesses who make up the bulk of payroll services firm Paychex Inc.’s customers said the measure of small business hiring was off by half a percentage point by the end of May. Not a good sign.

In today’s world,  when the shift from a manufacturing economy to the information economy is the major trend in American business, the health of small business may be the most important indicator of long term growth. We need hundreds of thousands of creative new small businesses led by entrepreneurs who are attempting to take advantage of the riches of the information sector to provide new products and services.

The Left’s push for a higher minimum wage, and Obama’s new order to force businesses to pay overtime to anyone making less than $50,000 a year will simply encourage the proliferation of robots, electronic cashiers, and more part-time workers. Over time the creativity of entrepreneurs could provide the new jobs that will replace the ones being automated or outsourced. Cheap money and relatively cheap labor should be helping, but a number of factors are at work. We have an administration that deeply believes that more regulations makes life better, which is clearly part of the problem.

Big businesses can cope. When the minimum wage jumps to $15 an hour, a chain of drugstores can afford to install automatic checkout machines that won’t get $15 and hour plus overtime, plus healthcare, plus sick leave, plus being late for work. It’s not so easy for small business.

Control and Regulation and the heavy hand of government  have a cost. The Left is basically clueless. This time it’s affecting us all.

How to Destroy Trust In Seven Easy Lessons. by The Elephant's Child

How much should we worry about all these scandals? Professor William A. Jacobson tackles that question, and says “when everything is a crime, government data mining matters.” President Obama, who was elected on the idea that he was going to end the dissension in Washington, and bring people together, has quite clearly been unusually divisive. He has been clear that he believes that “bipartisanship” is when Republicans agree with his ideas.

When the IRS scandal proves that calling yourself a “patriot”, expressing interest in the Constitution, or in smaller government can lead the IRS to descend on you with all their authority, casts suspicion on accounts of how the government data mines phone records and email and search messages from internet companies. When Senator Dianne Feinstein insists that the data mining has prevented large attacks, her paranoia about guns and  lack of sound information make her statements on data mining seem untrustworthy. The level of regulations and mandates emanating from this administration speak constantly of a forceful, authoritarian approach to the public, which is directly oppositional to Americans understanding of individual liberty.

We have all read of the criminalization of life, the attack by the EPA on someone who has allowed rainwater to collect on their land, the attempts by the EPA to regulate trickles of water from snowmelt under their Congressional  authority to make sure that navigable waters are clean. The case of the Gibson Guitar Company shows that government regulators can attack your business and nearly destroy it even when you are obeying all the applicable laws. Overcriminalization is rife, and is becoming a matter of concern.

The United States has implacable enemies. The president’s insistence that he has decimated al Qaeda is not convincing. We continue to be attacked, and data mined from telephone calls between known terrorists or emails between this country and terrorist havens are probably essential to learning about potential attacks. We need intelligence, and good intelligence means trying to find out what the bad guys are doing. They must be found in the general population, and they don’t usually wear tee shirts labeled “bad guy.”

Where should we draw the line? Obama’s response is that we should trust the government. He is advocating a shield law to protect reporters against the sort of harassment that his attorney general and the FBI practiced against Fox News and the Associated Press. He is outraged that the IRS went after his political opponents, and fired the acting Head of the IRS who was scheduled to leave that office shortly, anyway. Victor Davis Hanson spells out the situational ethics practiced by the president. Read that one closely. Obama’s declarations vary from one day to another. Words are designed to please the listener, but have no permanent intent. Americans want to believe their president, but Obama has squandered that trust.

Ironically, the very success of economic and political freedom reduced its appeal to later thinkers. The narrowly limited government of the late nineteenth century possessed little concentrated power that endangered he ordinary man. The other side of the coin was that it possessed little power that would enable good people to do good. And in an imperfect world there were still many evils. Indeed, the very progress of society made the residual evils seem all the more objectionable. As always, people took the favorable developments for granted. They forgot the danger to freedom from  a strong government. Instead, they were attracted by the good that a stronger government could achieve — if only government power were in the “right” hands.
……………………………………………….Milton and Rose Friedman

There’s a “Regulatory Cliff” Too—A Cold Dead Hand on Small Business. by The Elephant's Child

There’s quite a list of hushed-up things that went unmentioned before the election, but now that it’s over, are appearing.  Business groups and Republicans see an approaching “regulatory cliff” that could be just as damaging to the economy as the “fiscal cliff” of tax increases and spending cuts.

The White House sought before the election to quiet Republican charges that President Obama was an overly extreme regulator who is killing U.S. jobs. The president has long denied that regulations have any effect on the economy, while small businesses protest and lay off workers. Now that the election is over, the regulatory pipeline has been turned back on.

The Environmental Protection Agency  has proposed rules to update water quality guidelines for beaches, and to deal with runoff from logging roads. The National Highway Traffic Safety Administration has proposed long-delayed regulations requiring auto manufacturers to include “event data recorders — “black boxes”— in all cars and light trucks beginning in 2014.

It’s now full-speed ahead, on a slew of new job-killing regulations that will be issued in a second term, said Senator James Inhofe (R-OK). Regulations will limit ‘greenhouse gas emissions,’ require cleaner gasoline, put controls on drilling for oil and natural gas.

The overall regulatory burden is now $1.8 trillion annually, according to the Competitive Enterprise Institute, and this year alone new rules have added $215 billion in compliance costs. Obama regulations cost 20-times estimates.

Current law rules that a regulation should not be at the White House longer than 90 days. The Office of Information and Regulatory Affairs admits that 84% of EPA rules have been delayed and 100% of energy regulation has been under review for more than 90 days. There is a great deal of uncertainty with many of these cost estimates. There is, in spite of promises, no transparency. Under the Regulatory Flexibility Act the White House must publish in the Federal Register a ‘regulatory flexibility agenda’ two times each year. The administration has not done this in 2012, and has not been forthcoming about costs and benefits of recent regulations.  The Administration avoids the regulations that govern their actions, yet want to impose regulations on everybody else. There’s a word for this.

The burden for businesses is staggering. For the regulations that have proposed versions, the paperwork burden is 37.6 million hours. A productive work year is 2,000 hours. The pending proposals could force 18,839 full-time employees into the role of complying with paperwork, at a cost that could top $100 billion. Regulators often fail to understand the burden that their bright ideas impose on business.

For example, the Department of the Interior is requiring private oil companies to hire marine mammal and sea turtle monitors if the companies are granted a lease to drill offshore. A marine mammal observer’s job is to watch for whales, dolphins, and similar sea creatures and to advise on minimizing the underwater noise created by offshore drilling which might affect the sea mammals. They are also required to observe while on vessels, to reduce vessel speed to 10 knots or less and maintain a 90 meter distance, when assemblages of cetaceans and sea turtles are observed.

The World Bank rates countries on “the ease of doing business.” 108 nations have implemented 201 regulatory reforms in 2011-2012, but the U.S. has not. It now ranks behind Singapore, Hong Kong and New Zealand.

During the first three years of the Obama administration 106 new major federal regulations were added, which is almost four times the number and five times the cost on the major regulations issued by the Bush administration during three years.

CEI also keeps track of Washington’s regulatory obsession, and has noted that by the end of 2012 the bureaucracy will have written nearly 3,900 new rules, spread out over almost 79,000 pages of the Federal Register.

This is an indicator of the Big Government philosophy of the Obama Administration, who believe that wise people in government can better tell people how to direct their lives and businesses than can individuals themselves. The Obama Administration favors central planning. Republicans point out that they aren’t very good at central planning, and when they get out of the way, the economy and the jobs will come back.

For a Feckless Foreign Policy: Rules Clarify. by The Elephant's Child

The conversation, plentiful, about the events in Egypt and Libya today, was mostly around Governor Romney’s very appropriate remarks — which the media was very anxious to turn into an undeserved and uncalled for attack on Obama, politicizing an unfortunate event… blah, blah, blah.  In the general comments sections, liberals attempted to brand Republicans with the term “war-mongers,” and I heard the term “neo-cons” bandied about for the first time in ages.

It is important for foreign policy to be decisive. Firm lines must be drawn — you may go this far and no further, for a reason. Not to be a bully, but to establish what the rules are. That’s why games have rules, otherwise you’d have all these men running around a football field in big shoulder pads and helmets randomly tackling each other with no purpose. No touchdowns and not very interesting. Rules clarify. And they don’t always stay the same. Football is no longer played with the 1920 rules. Foreign policy could be described as a big clumsy game with nations pushing and shoving each other and posing and pretending. The rules keep changing, but they really need rules.

Liberals are very confused about rules. They want lots of them for other people, but for themselves, not so much. Yet when it comes to a squalling child in the grocery store who is grabbing things off the shelves — if you give said child a smack on the behind, they may well call child protective services. The child may learn what is acceptable behavior and what is not. Nobody is advocating beating a child.

The Obama government has set records for issuing regulations, yet no administration in the nation’s history has been so lawless — simply choosing which  of the nation’s laws they will obey and which they will ignore, in spite of any annoyances like oaths. Overregulation can lead to contempt for rules. So when it comes to drawing firm lines for other nations, this administration is feckless. I looked it up: feckless, adj. – lacking purpose or vitality, feeble, ineffective, careless, irresponsible. (from the Scottish feck, short for effect). Sounds about right.

Libya is a mess, with essentially no government, and everybody running around causing trouble: that game with no rules. Egypt is a different deal. They are the most populous of Arab nations, and desperately poor. Some people exist solely on government handouts of bread. The U.S. sends around $1 billion in aid each year. The new Muslim Brotherhood  president, Mohamed Morsi, had been invited to the White House. He is reportedly seeking a reduction or cancellation of Egypt’s debt to the U.S. He also wants the release of the blind sheik Omar Abdel-Rahmani, who was behind the 1993 attack on the World Trade Center, a variety of other offenses, and was a deputy of Osama bin Laden. That seems to be a wealth of material for drawing firm lines, but I don’t expect much.

How Do We Fix The Economy? Let’s Outlaw Profit! by The Elephant's Child

The world’s manufacturers have fallen back into recession.  A key gauge of factory output shrank in August to its lowest point since July 2009 — to 49.6.  A reading below 50 is considered recessionary and the index has been below that key level three months in a row. The reason is the U.S. manufacturing sector.

Manufacturing  is mostly done by small to midsize companies, but due to a raft of new regulations under Dodd-Frank financial reforms, those businesses are struggling to get financing. But if they do get funds — under ObamaCare any company with more than 50 employees will pay steep penalties to insure its workers. So many will put off new investments and curb hiring plans to avoid higher costs. And they don’t know what other regulations may be coming down the pike. In Obama’s first term, manufacturers were hit with an average of 72 new regulations a year, an increase of 60% from the Bush era.

In this sluggish economy, factory output remains 4.7% below where it was when we entered the recession.

The United States took the top spot in the WEF’s Global Competitiveness Report as recently as 2007 and 200, but dropped to 2nd place in 2009, and now we have dropped to 7th place.  The business community is critical toward public and private institutions, and it’s trust in politicians is not strong (54th). Business leaders remain concerned about the government’s ability to maintain arm’s-length relationships with the private sector (59th) and consider that the government spends its resources relatively wastefully (76th). A lack of macroeconomic stability is the country’s greatest area of weakness (111th, down from 90th last year). We do beat Portugal though. The U.S. is 76th in the burden of government regulation behind Kenya and Thailand.

Here’s one reason why we find ourselves in this position. Peter Schiff posed as an anti-business crusader, and found a significant number of DNC delegates and attendees who support explicitly outlawing profit.  These are not the occupy people camping outside, but Democrats at their own convention.

Schiff is CEO of Euro Pacific Capital Inc, a broker-dealer in Westport, CT, and Euro Pacific Precious Metals LLC, a gold and silver dealer based in New York.

If people don’t have the most basic understanding of how the world works, no wonder…

Representative Mike Kelly Tells It Like It Is! by The Elephant's Child

Mike Kelly(R-PA), 3rd District, gave a barnburner speech on the House floor today to a standing ovation from house members. (The Republican ones)

The House passed legislation on July 26 that would bar agencies from making any significant changes to regulations before the economy improves.

The Regulatory Freeze for Jobs Act (H.R. 4078)— dubbed a “red-tape” prohibition—passed by a vote of 245 to 172.

The legislation would stop all new significant federal regulations until the national unemployment rate falls to 6 percent or below. The unemployment rate has been higher than 8 percent for 41 consecutive months. The one bill is a combination of seven bills that would either halt regulations or otherwise revamp the regulatory process.

House members approved an amendment that would expand the term “significant regulatory action” from the current threshold of a $100 million or greater cost to the economy to $50 million.

As the legislation goes to the Senate, the Obama administration has already said it opposes the bill. Officials have even threatened a veto if it came to the White House in the version the House passed. In the administration’s view, the bill would add layers of procedural burdens that interfere with the ability of agencies to carry out their statutory mandates. Translation: Private business needs lots of regulation to be sure that they act as wise Washington bureaucrats think they should.  Regulation is good. Who knows what they might do if they are not properly regulated?

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