21 Jan 2011

Barack Obama, Centrist Deregulator

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Where was the cost/benefits analysis on all the new regulations Barack Obama already signed?

Dan Mitchell
argues that Barack Obama’s new alleged centrism, as manifested by his WSJ column about deregulation, is not sincere, was accompanied by his usual factual misstatements, and is flagrantly contradicted by his policies.

The President garnered some attention for his January 18 column in the Wall Street Journal, in which he said we need to control the regulatory burden.

Let’s start with the insincere part. He praised capitalism.

America’s free market has not only been the source of dazzling ideas and path-breaking products, it has also been the greatest force for prosperity the world has ever known. That vibrant entrepreneurialism is the key to our continued global leadership and the success of our people.

I’m not really sure how to analyze this passage. Let’s just say it is akin to George W. Bush talking about the need for small government and fiscal responsibility.

Obama then talks about the need for balance, saying that regulations sometimes are too onerous, but then he gets to the inaccurate part.

…we have failed to meet our basic responsibility to protect the public interest, leading to disastrous consequences. Such was the case in the run-up to the financial crisis from which we are still recovering. There, a lack of proper oversight and transparency nearly led to the collapse of the financial markets and a full-scale Depression.

I don’t know whether to laugh or cry at this statement. A part of the government, the Federal Reserve, creates far too much liquidity with an easy-money policy. Other government-created entities, Fannie Mae and Freddie Mac, then create enormous subsidies for bad housing loans. These combined policies lead to a bubble that bursts, and Obama wants us to believe it was a problem of inadequate regulation?!? For those who are interested, here’s a good article from the American Enterprise Institute explaining how government caused the financial crisis.

Now let’s get to the hypocritical part, where the President issues a new executive order, asserting we need to balance costs and benefits.

As the executive order I am signing makes clear, we are seeking more affordable, less intrusive means to achieve the same ends—giving careful consideration to benefits and costs. This means writing rules with more input from experts, businesses and ordinary citizens. It means using disclosure as a tool to inform consumers of their choices, rather than restricting those choices.

I suppose we should give the President credit for chutzpah. Less than one month ago, his Administration proposes an IRS interest-reporting regulation that, in a best-case scenario, will drive tens of billions of dollars out of the U.S. economy. That regulation does not even pretend there are any offsetting benefits, yet Obama says his Administration will be diligent in applying cost-benefit analysis. This is sort of like a kid murdering his parents and then asking a court for mercy because he’s an orphan.

Read the whole thing.

Another column or two like that, though, and David Brooks and Peggy Noonan will be signing Obama’s praises again.

One Feedback on "Barack Obama, Centrist Deregulator"


While I am not under any illusions that the President has “converted”, I do believe that he has had to face the economic fact that any president would: anti-business policies inhibit economic growth. More importantly, I think he is confronted with the realization that he has been associated (rightfully) as the Leftist in Chief of all the government interference that is dragging down the economy. If he doesn’t change — or appear to change — course in the next two years, he’s roadkill. This scenario could play out just like it did for Bill Clinton, who is now widely touted as responsible for a healthy economic environment in the latter 90s. The fact that his first two years were disastrous and that it was only after he followed the Republican Congress’ lead that things took off, seems to have escaped their memories. Maybe not Obama’s.


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