Grumpy economist John Cochrane explains:

The sound and fury will be over big fights on taxes and spending. They will look like replays of the last four years and not end up accomplishing much. The big changes to our economy will be the metastatic expansion of regulation, let by ACA, Dodd-Frank, and EPA. There will be no change on our long run problems: entitlements, deficits or fundamental reform of our chaotic tax system. 4 more years, $4 trillion more debt.

Why? I think this follows inevitably from the situation: normal (AFU). Nothing has changed. The President is a Democrat, now lame duck. The congress is Republican. The Senate is asleep. Congressional Republicans think the President is a socialist. The President thinks Congressional Republicans are neanderthals. The President cannot compromise on the centerpieces of his campaign.

Result: we certainly are not going to see big legislation. Anything new will happen by executive order or by regulation. …

[T]he unfolding of regulation will be the big story. It is news to most Americans, but the ACA and Dodd-Frank are not regulations written in law. They are mostly authorization to write regulations. They are full of “the secretary shall write rules governing xyz” with a timetable. Most of that timetable starts today, November 7 2012. You don’t have to think the administration is a bunch of willy nilly regulators to foresee a metastatic expansion of regulation. You just have to look at the time-table of regulations already legally mandated and pending.

I fished around a little on the net. The EPA has regulations under development that by its own estimates will cost hundreds of billions of dollars a year. I’m all for clean air, but there is a question of just how clean and at how much cost. …

Dodd Frank. For number of rules that a law commands be written this takes the cake. If you want to scare your libertarian kids on Halloween, just read from the Fed’s admirably transparent regulatory reform website. …

[H]undreds of billions of dollars are at stake, and the involved industries, their lawyers and lobbyists, are furiously “helping” to write all these rules.

This is the real news. It’s baked in. Any new regulatory agendas come on top of this. And it will remake the American economy in the next four years.

Read the whole thing.